So, you have decided to accept credit cards on your website as an online payment method. This is good news as it will make your products and services available to international consumers as well as offering convenience.
In order to accept credit card payments onto your website you need to set up a merchant account. There are two methods in doing this. You can either approach a bank or other type of financial institute that offer merchant accounts and apply with them or you can go through a third party merchant account payment processing service. Deciding on which option will suit you best can be difficult so here are some guidelines on both methods.
There are charges with both types of merchant accounts. Transaction fees have to be paid to the bank every time you make a sale, also there are various risks involved when accepting payments from credit card holders due to online payments being very difficult to check.
If you already have an established business then it is better for you to set up your own merchant account, this will give you a greater control and freedom over your account. You will need to choice a shopping cart system and payment processing service. There are other benefits to managing your own merchant accounts, such as lower transaction costs and a more professional look to your business.
If your business is still new or just a small organization, then you should consider employing merchant services through a third party. The procedures of opening an account can be quite complicated and the various costs add up.
Also if you are not technically minded then setting up a merchant account and a payment processing system is not the easiest thing to do. A third party can manage all the payment systems for you giving you more time to advertise and market your business and keep your clientele happy.
Choosing a third party merchant to handle your credit card payments makes a lot of sense. If your business is new and you are unsure of profit margins then this can be preferable and relatively simple to set up.
Third party merchants generally charge a slightly higher percentage for transactions and this is how the merchants make their money.
They have responsibility for all the credit card business transactions leaving you time and energy for other areas of the business. Once the merchant has calculated all the payments they then forward you the funds at the end of the payment period. These are more cost effective than trying to set up your own system and manage it, unless you have a highly profitable business already. You will also have the benefit of advice and information from customer services.
Now while you know what a Merchant Account is, we will jump to the payment gateway which also is a important part of the deal to accept credit card payments at your webstore or e-commerce website.
Payment Gateways
Setting up a merchant account with a payment gateway to process your credit card payments online is easy once you know how and will increase sales as visitors to your site have the benefits of instant purchase.
The reputation of your website is defined by the gateway service you provide as the payment gateway is the link between your website and your merchant account. In comparison to the brick and mortar store it is checkout time.
The service a payment gateway provides is to authorize or decline the credit card payment, whilst keeping the credit card and bank account numbers secure from the website and the merchant. Some gateway services will only offer these services and others will offer the whole package including the shopping cart and merchant account.
Simply put this is how it works. The customer chooses their products and drops them into the shopping cart. Once they have everything they need they proceed to checkout and fill out all the details and the order is sent for authorization.
SSL encryption is used to keep the details secure. The information is sent to the merchant and then forwarded onto the payment gateway. Then it passes to the processor who checks it with the relevant card association or bank (Visa, MasterCard, etc.) and they either accept it or decline it. If a card is declined then it is returned with a code as to the reason why it is declined. The whole process is actually quite quick although there are a lot of steps involved. It generally takes around 3 days to complete the process; from the moment the customer enters their details to when the merchant receives the money into their account.
The most important aspect of a gateway system is the security it offers. There are anti-fraud tools that are implemented in a gateway system to prevent credit card fraud. The system will check certain details such as confirming the delivery address, geolocation and regular AVS checks. Digital signatures can prevent a system from being hacked into and dynamic IP protection checks the same IP addresses are the same as in previous sales.
SSL ensures that all transactions are encrypted from the users’ browser with a 128-bit encryption and one of the highest levels of security available.
For further information, please do not hesitate to contact cclogic.com we will be more then happy to help you
