Do you want to accept payments online for your business but you are concerned about transaction safety? If YES, here are 5 best and safest ways to accept credit card payments online.
One of the greatest gains of technology cum the internet is the redefinition of the payment system that is accepted by businesses all cross the globe. In recent time, it is difficult to find any topflight and even a new startup business that does not accept credit card payments online.
In this regards, credit cards will continue to be a key payment option for both businesses and customers when they conduct transactions whether in a brick and mortar store, from an online platform, or via a mobile device.
According to a study by market research firm, Javeline Strategy & Research, by 2017, just 23 percent of all point-of-sale purchases will be made with cash. That means more than 75 percent of all transactions will be conducted with credit and debit cards. Among the numerous consumer credit card providers available, the most popular are:
Why Accept Credit Card Payment Online for your Business?
Now that people prefer to pay for products and services using their debit and credit cards, it has become more than necessary for your business to accept credit cards as a form of payment. This is especially true online where cash payment is not an option and customers are weary about revealing their bank account information when making a purchase.
So, by accepting credit cards, you are making it more convenient and easier for your customers to make purchases online and to make larger point-of-sale purchases. If your business is accepting only cash, you will soon find yourself losing sales to competitors that are equipped to handle credit card payments. This is because, as proven by the statistic above, card payments are becoming more popular, and customers are now expecting card payment option as a rule, rather than a courtesy.
What are the Challenges of Accepting Credit Card Payment Online?
There are indeed challenges you are expected to face when accepting credit card payments from an online platform hence the need to look through the different types of credit card payments that are carried out online.
Accepting credit card payment online may expose your business to fraudulent activities or credit card scams, but the advantages you stand to gain far outweighs the few drawbacks that come with it. When you accept credit card payments online, you will be able open your business or sell your products and services to a wide range of customers.
Statistics show that when you accept credit card payments, it helps to increase in-store sales by 40 percent and it is absolutely necessary for businesses selling online. For example, if you run an online store that ships products all across the globe, it is only but normal for you to generate more sales far more than a brick and mortar store in your location that sell same products.
Having said that, you are expected to ensure that you put security measures in place that will give your clients and potential clients the assurance that when they make use of your credit payment, their credit card is secure and safe. Trust me, beyond charges, fraud and conversion rate, your organization’s ability to expand internationally can be truncated by your credit card processing choice.
As a business that is interested in welcoming online payment from your customers, here are some of the best and safest ways to accept credit card payments online;
5 Best and Safest Ways to Accept Credit Card Payments Online
- Credit Card Payments Via Merchant Account
A merchant account is a special kind of business bank account that lets you accept credit card payments. The merchant account service provider serves as a middleman between a business and its customer by taking care of the entire process such as making available the needed technology, tools, equipment, and software essential in handling credit card transactions.
Accepting credit cards payments online will enable you leverage on online payment technology equipment for in-person credit card processing such as Point of Sale machines (POS terminals), PIN-pad terminals, wireless terminals, and EVM acceptance amongst others.
You can be rest assured that this platform comes with quite a number of security features, which vary between merchant account providers hence it is pretty important to know what each of these merchant account service providers are offering. With that, you will be able to sign up with a company that offers you the most security features and provides you with a way to stay PCI-compliant and EMV-compliant et al.
One good thing about making use of merchant account to accept online payments is that it covers all aspects of your credit card acceptance needs as an all-in-one-solution. Plus, you are not expected to pay outrageous fees when making use of merchant account.
- Credit Card Payment Via Online Payment Gateway
Another good way to accept credit card payments online is via payment gateways. As a matter of fact, online payment gateway can boast of offering greater control over security rules and customization for businesses and it is highly suitable for bigger corporations that require customized online payment solutions for their business.
As a business owner who wants to leverage on the internet to generate more sales, whether you operate from a physical location (brick and mortar store) or mobile cart or online store, you can successfully leverage on online payment gateway for processing credit cards. This is a suitable online payment option especially for businesses that don’t generate high volumes of credit card usage and also businesses that are considered to be high-risk.
Please note that the cost to making use of this online payment option may vary significantly from one service provider to another, which is why it is necessary to conduct personal research on what is charged and to know if there are any of the fees that are negotiable.
If you settle for an online payment gateway, then there is no need to get merchant services approval to use the services. This online payment option is easy to set-up and use, but it can be expensive when compared with other options, especially when using it for a high-risk business.
Some of the advantages of making use of an online payment gateway are that you usually have more handholding and personalized customer service along the way because the providers are large companies with big support organizations. So also, when you make use of this services, you will be able to get your query resolved on the phone via their customer service line.
- Credit Card Payment Via Software and Payment APIs
Credit card payment via software and payment APIs is another highly suitable credit card payment for those businesses that may prefer a software package and more control over the process. Please note that there are ICT solutions that you can purchase in order to be able to accept credit card payments and of course you would work with your bank in order to do the actual financial transactions.
In addition, there are APIs that provide a way to customize any type of payment processing methods for your online credit card processing.
This includes having the payment platform integrate with other software that runs different aspects of your business or that enables a greater level of personalization and security. In actual sense, these options are recommended for a business that has some technical competence or a team of ICT experts who can assist with this process. Otherwise, it’s best for you to go with one of the other options on this list.
- Credit Card Payment Via Mobile Payment Processor
Another safes way of accepting credit card payments online is via mobile payment processor. No doubt, this method of credit card acceptance is a secure means of processing card card payments from any part of the world. When compared to a merchant account services provider, a mobile payment processor creates a merchant account to receive credit card payments but does so wirelessly.
This form of payment is compatible with devices such as smartphones and tablets et al that comes with a card reader that can plug into a mobile device. In terms of security as it relates to PCI compliance as well as encryption keys, Secure Sockets Layer (SSL), you can be rest assured that you will get same security you will get from making use of a merchant account services provider.
Please note that this type of credit card payment is highly suitable for your business especially if you rely on a cash register or other equipment no matter the model of business you run, whether a physical store (brick-and-mortar store) or you run an online store or you are a street vendor or you operate a food truck and doesn’t rely on a cash register or other equipment.
The advantage you stand to gain when you make use of mobile payment processor is that you will be make use of a well secured credit card payment method that travels with you no matter the part of the country or world that you go to.
- Credit Card Payment Via Point-of-Sale System
Point of Sale system is yet another safe way of accepting credit card payments online from customers. POS payment system is a popular online payment platform and it is a payment option that combines a merchant account with software and equipment as well as provides a way for retailers to manage their customers and inventory, generate sales reports, and cover many operational aspects of business.
It is easier to find businesses without online presence leveraging on this form of credit card payment. Business such as retailers, restaurants, and companies that offer services are known to make use of POS machines as a means of receiving payments from their customers.
In order to make use of this credit card payment option, you are required to have a merchant account. On the other hand, some Point of Sale system providers known as payment aggregators process through payment gateways and deposit the funds directly into your bank account.
It is important to point out that technology device and fees are part of the requirements for making use of this credit card acceptance method and security is also guaranteed via PCI compliance, encryption, SSL, password protection, data backups and remote wiping usually when your POS machine is stolen or damaged beyond repair.
One of the advantages of making use of this credit card payment option is that it is a one stop credit card payment solution that covers a wide aspect of your business much more than processing online payments.
Having discussed why you need to start accepting credit cards for your small business, let’s now look at how to go about setting up the system for accepting credit card payments from your customers. If your business is an offline retail store or service business, here are the steps you need to follow.
How to Accept Credit Card Payments Online for Business
a. Research and estimate your expected online sales-: Estimate the online sales you will make so as to know how to accept credit card payments online and what it will cost you. Merchant account services on the internet charge customers based on their online sales. So if you know your projected sales, you will avoid paying unnecessary fees.
b. Setup a website or an e-Store-: Making a merchant website of your own is one of the ways you can accept credit card online. When you put your products on a website, buyers can pay and checkout easily if you offer them a credit card payment option.
If you do not have the skill to design or develop a web page, get a skilled web designer. Make sure the person you hire is knowledgeable in information technology. You can ask for the portfolio of the designer prior to entering into an agreement with him.
c. Set up your merchant account-: To accept credit cards from customers, you will need to set up a merchant account with your bank. This special account serves as the middleman between your business and the customer’s credit card company or bank and withdraws the appropriate amount from the customer’s card during a transaction.
Setting up a merchant account involves an application process. If your application is approved, your will typically be able to receive payments from customers using the most common credit cards—Visa and Mastercard. However, you might need to go through a separate application process to be able to accept payment with less popular credit cards such as American Express and Discover.
When searching for a credit card processing company or a bank to host your merchant account, you must look for unbiased reviews and compute the fees that each of them charge. The popular ones merchant account service providers are:
- Google Checkout
You can also ask your local banks if they have such service. You can also choose to use PayPal because they are not difficult to use and they cater to sellers having low sales on the internet. In addition, you are not required to provide your credit card number to the merchant.
d. Fill the application form-: Fill out a required application form so that you can access credit card processing services and accept credit cards online. There will be certain information required of you and these include details about:
- Your business data
- Where payments made through credit cards shall be directed.
After you get accepted to the program, you need to select your preferences regarding your account. Once the merchant has accepted you, you can choose your mode of payment acceptance. There are options to choose from such as those that necessitate a monthly payment while there are those that do not. Select the kind of checkout button you want for your website. You may also provide the price and the description of the products you are selling.
e. Purchase processing equipment-: After having your merchant account approved, your next step is to lease or buy credit card processing equipment through your financial institution. Usually, this will be a card reader connected to a modem, so you will receive instant verification if the card is approved or declined at the point of sale.
It is your responsibility as the retailer to verify the validity of any card by asking for signatures or codes at the back of the card. Another option is to compare the signature on the charge slip with that on the back of the card. If, on the other hand, your business receives payment from customers online or is an online store, you might not necessarily need a retail merchant account. Instead, you need an online payment processor.
f. Setting up your online processor-: Online processors are meant for businesses that are run online. Although you can use a merchant account to accept account to accept payment online, online payment processors such as PayPal and 2Checkout are easier to use.
To set up your account with an online payment processor, you will need to enter your business information and verify a bank account where the money will be transferred after being withdrawn from customers’ credit cards.
Online payment processors charge transaction fees that are equal to or even less than those charged by retail merchant account providers. And consumers who shop online tend to trust sites that use online processors like PayPal, because you cannot view the buyer’s financial information. Whether you are setting up a retail merchant account or an online processor, there are some terms you need to know.
g. Activate the payment gateway on your website-: After setting up your preferences, the merchant will offer you a HTML code to be placed on your website. First you need to copy the code, then open your website editor; go to your desired page where the payment button shall be placed and paste the code there.
Some web applications such as WordPress makes this process as easy as ABC. All you need to do is to install the necessary plugin, and voila! You are good to go. After your website has been updated, a button that says “Buy Now” or something of this nature will be seen. Customers who click this button would be able to utilize their credit card for their purchases.
You must bear in mind that installing and setting up your credit card processing gateway is just the beginning of the game; you must monitor your sales regularly so that you would get a great deal from the credit card payment service you applied for through the internet.
h. Fees apply-: Both retail merchant accounts and online processors charge a discount fee per transaction. This is a percentage of the total purchase amount that will be charged to you for processing the transaction. In addition, you will also be charged a flat per-transaction fee (usually less than $1) and, in some cases, a monthly maintenance fee.
i. Rules apply, too-: You need to also understand that some rules apply to accepting credit card payments. First, you are not allowed to pass on transaction fees to the customers or require a minimum order amount for the customer to have the fees paid you. Second, transaction fees are not refunded in the case of refunds.
There are many other terms and conditions that you need to play by when accepting credit card payments. Violating these may result in the loss of your merchant account.
In conclusion, these are some of the best and safest ways to accept credit card payments online including the step by step application process, but the truth remains that in order to decide the type of online credit card payment options to settle for in your business, you would have to consider the size of your business and of course your business needs per – time.