Welcome to Online Payments Processing 101, the starter course for any business that wants to process credit cards online.
Maybe you’re an established brick-and-mortar business looking to break free and expand online. Or maybe you’re launching an online business. Either way, in order to put the commerce in eCommerce, you’ll need to get paid. In order to get paid online, you’ll need to create a plan to process credit cards.
Because every business is different, your payment processing needs will be different than every other business. The good news is the explosion of online buying has created an abundance of credit card processing choices for eCommerce merchants. So let’s explore some of the how, what, and why of processing payments when creating a smart business plan. The first step is to become familiar with PCI compliance and best practices for accepting cards securely.
What are your plans for growth?
Sometimes it’s hard to assess the future of your business when you’re just starting out. However, with thorough research into your target audience, a product that truly solves a need, and a solid business plan, you can determine how fast you might grow. You can definitely figure out how fast you want to grow. These decisions may well determine the type of online payment processor you choose.
If you want to keep your online business small and manageable, you may choose to start from among several popular eCommerce building sites that build payments component right into the site template. Having the payments built into your eCommerce platform allows you to get your site up and running quickly and doesn't require you to develop technical skills in-house. You can take advantage of the payment services (known as Payment Facilitators) readily available with no extra work or research on your end.
Businesses that are looking for more custom options or who expect to be processing a high volume of sales may want to consider speaking with a payment processor offering more comprehensive resources and options in order to benefit from a complete line of merchant services.
Looking to expand your business?
If you already have a brick-and-mortar business, are planning to grow quickly, or intend to sell internationally, you may need a more established payments provider that can offer an individualized approach to your credit card processing needs. If that’s the case, you should work with a payment processor directly rather than a third party. With a dedicated merchant account, your online business is connected directly to a payment processor and eCommerce gateway. Terms are negotiable, solutions are flexible, and customer service is available when you need it.
To establish a merchant account, you could turn to your bank, or, if you already have a brick-and-mortar business, you could talk with the dealer who assists you with your in-store credit card acceptance solution or POS system.
Whether you are just starting out or looking to expand, you’ll want to find a payment processor with versatile options for whatever type of business you have and whatever way you want to sell. Some of the important factors to look for in accepting credit cards are ease of integration, reasonable costs per-transaction with a minimum of extra fees, and a degree of customization over the payment experience for your customers. A dedicated merchant account can also provide additional value-adds for your business.
Ask whether a payment gateway is involved, and whether you can process payments on a laptop or on a mobile device. Ask about the customer experience, particularly how well the credit card payment and acceptance process integrates with your website. Dive into whether they offer fast underwriting and advanced security, and about the time it takes to set up invoicing. If your business will process payments in-person, ask whether they offer solutions that allow you to charge for and accept payments anywhere via a mobile device.
Consumers typically want options in how they pay. Your goal is to create solutions that allow them to do so… early and often.
Process credit card payments safely and securely
Fraud wears many faces in today’s commerce ecosystem. In-store purchases are also known as “card present,” when a customer presents an actual card for payment in person. In-store merchants have been upgrading their POS systems to enable EMV-enabled chip card payments, which offer additional security for card present transactions.
But what about online “card not present” credit card purchases? Here’s where a payment gateway comes into play. Much as a credit card terminal or reader authorizes payments in a store, a payment gateway authorizes credit cards online.
But is that gateway secure? One way to know for sure is to seek out a payment processor that offers layers of security, tokenization, innovative fraud protection, and chargeback prevention solutions. Ask for details from any prospective payments partner.
Today, those looking to commit fraud are lurking around every corner. You don’t need to become an expert in cybersecurity in order to setup up your business to accept credit cards. You do need to understand enough about security in order to develop confidence that your payments provider has you covered.
Chargebacks are a growing source of online fraud, and one that many new business owners might not be aware of. Chargebacks are what happens when a customer disputes a charge, resulting in the reversal of funds from the merchant back to the customer. While many chargebacks are legitimate, some estimates suggest that upwards of two-thirds of all chargebacks are fraudulent, sometimes known as “friendly fraud.”
Be sure to ask any prospective payments provider whether they offer chargeback protection services. Without such protection, your business may be left liable for both the direct and indirect costs of chargeback fraud. In addition, international transactions carry more risk, so make sure to ask all payment processors how they’ll protect your business when accepting credit cards from overseas customers.
In the end, security comes down to protecting your customers’ data, your business from costly breaches, and most of all your reputation as a merchant.
Managing the costs of accepting credit cards online
There is clearly a lot to think about when selecting a partner to help your online business process credit cards. You’ll want a complete solution that allows you to at minimum accept credit card payments online. You may also want to add the ability for your customers to pay by phone. Perhaps your business needs to set up recurring monthly payments for invoicing ongoing services, in which case you can process payments virtual terminal solutions.
Whatever the package best suited to your business, you’ll need to consider pricing. Obviously, setting up a system to accept credit cards won’t be free. Pricing models from the payment processing companies vary considerably. Before you sign-up with a payments partner, be sure to ask about all of the following in order to setup an apples-to-apples comparison of total costs.
- Setup fees
- Monthly fees
- Per-transaction fees
- Percentage-based fees
- Chargeback fees
- International card and currency fees
Setting up your business to process credit cards isn’t a trivial matter. Few things that are worthwhile to your business will ever be easy. But getting paid is definitely at the top of the any business to-do list, and you can at least make the process easier. Investing time and energy to select the payment service that is right for your business will be time extremely well-spent, and pay huge dividends for your online business. Understand all your options, especially before you sign-up for any long-term commitment.
Worldpay offers flexible solutions to accept credit cards online for businesses of any size. Our commitment to providing fast, safe and easy payment experiences for your business–and your customers–is unmatched in the industry.