The answer for more and more companies each year is YES.
Are you one of those companies?
First, ask your self the following questions:
Do I make credit card sales off line?
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If your 'In the real world' business makes a significant amount of sales on account or on credit cards, then you may be a candidate for on line payment.
Do I expect to make sales from my web site, or is it primarily a marketing tool?
While every one from your family doctor to the local Lexus dealer has a web site, if yours is designed to sell goods or services priced under $1,000, then you should be seriously thinking about on line payment methods.
Is my competition doing it?
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This is the second most important pressure in the business world. Second only to:
Does my customer base expect it?
Increasingly, people are ordering on line. Thirty years ago, unless you wanted a genuine Amish built gazebo in the backyard, no one would dream of doing business with a company which had no phone.
Fifteen years ago, a company without a fax was considered in the stone age. Now a days, an email address and a web site is a must, and having your own domain name is almost as important.
If you have answered Yes to all or many of these questions, You are a candidate for on line credit card processing.
The growing trend in the way people do business is simply to view, select and purchase your product in a single visit to a single web site.
Case in point: In a single day, I purchased a complete new wireless network for my home, ordered some discount cell phones for my kid's birthdays, paid my insurance premium and reserved a motel room.
All on line. All without additional human agency. And all with my credit card.
So, What's next.
How do you go about on line credit card processing?
In the old days (say, five years ago), a new business who wanted to accept credit cards would simply:
Sign up with the appropriate financial institution.
Sign up with the appropriate verification company.
Get the card reader or at least an 800 number to call.
Learn how to use the card reader (or 800 number).
Teach their staff how to use the card reader.
Teach their turnover staff the same thing.
Teach their staff who forgot what they had learned the same thing over again.
etc. etc. etc.
Tedious. Yes.
Inefficient. Perhaps.
But Effective.
Because from that day forward, anyone with the right piece of plastic in his pocket was a potential customer.
Average sales dollars went up.
Cash deposits went down.
And Accounts Receivable were someone else's headache.
Getting Started:
Accepting credit cards on line is not so different than 'in the real world'. Initial setup is usually more involved for on line processing, but ongoing operations are much easier. The web programs handle all of the transactions.
No people to train.
No equipment to maintain.
No little slips of paper to file and store.
You need a way to process the actual transaction (Financial) and a way to get approval for the purchase (Technical)
Getting Started - The Financial Element:
Here, there are two main choices. You can use a third party processing service, such as Pay Pal, or set up your own merchant account through a bank.
The choice is not always a simple one and may be affected by your technical considerations. (More about that later.)
Third Party Service:
The third party service is generally easier to get started with and may be easier to integrate with your web site software. Their goal is to get as many credit card transactions through their system as possible. They are less likely to require a fancy financial pedigree than a bank will when starting a merchant account.
However, since they are doing most of the financial heavy lifting, their per transaction fee tends to be higher than with a merchant account.
This can be a flat fee, a percentage of the sale, or both, depending on the plan you sign up for.
Also, there is almost always a setup fee (ranging from modest monstrous) to contend with.
Finally, while some third party process services can be seamlessly integrated into your existing web application, many require that you use their web interface for the approval process.
Merchant Account:
Setting up your own merchant account will help your web site maintain a more professional image, important for a more upscale market. And, while the financial requirements and setup fees needed to establish a merchant account are usually greater than with a third party service, the per transaction cost is often less.
To summarize, if you are just starting out or are selling to the 'Ebay' crowd, services like Pay Pal may be your best choice.
If you are aiming at a clear and distinct business presence or want to cut your per transaction costs to the bone, the merchant account may be the way for you to go.
Getting Started - The Technical Element:
Just like it's 'In the Real World' counterpart, the on line credit card processing system requires a method to check for approval. Since there is no 'Person' behind the screen to swipe a card or call an 800 number, this functionality must be built into the web site itself.
This sounds complicated, and it is complicated. You have to decide who handles that complexity. You (or your IT staff), or an outside party.
Setting Up Your Web Page
You have several choices:
Custom Web Application:
If you are a web developer or have an IT staff with expertise in this area, you may have the ability to create your own custom application. Or, perhaps, you have contracted with a web developer to produce a one of a kind web page just for you.
If this is the case, then for you, it boils down to selecting (or developing) the right credit card approval tool for your application.
Examples of these include:
Shopping card modules that allow you to select items to purchase and will 'check you out' when you are done.
On Line reservation modules that will allow the customer to book rooms, schedule services or rent vehicles and equipment.
All of these tools will (or should) have the ability to get credit card approval automatically. The advantage to this option is 'What you want is what you get.' You can specify precisely how you want your web site to look and perform, within the limits of existing web technology. (And your development budget.) You are in control.
Tailored Web Applications:
For most smaller and start up companies, however, a custom solution is not an option. Enter a new branch of the software industry. Out of the box web pages that can be tailored to meet your needs.
You will be allowed to select various options that will modify the look and feel of the site. You can change the colors, move elements around, turn features on and off. And since since many customers are getting essentially the same package as you are, the development cost is spread out, allowing you to enter the E-Commerce world at a lower startup cost.
The down side, tailored is not custom. It's like the difference between eating at a buffet restaurant, and having your own chef. At the buffet, you can tailor your meal from among the many choices, but with a private chef, you can have anything there is to have.
And be advised, not all tailored solutions are the same. Just as the buffet can specialize in Italian, Chinese or America foods, the tailored solutions will each only offer a subset of the features available.
Most will have an integrated shopping cart, while others will require that you purchase that as an add on.
And, with regards to on line credit card processing, the package you uses may limit your processing options.
Like the man says: 'You pays your money, you takes your choice.'
Study the existing sites that are out there. Make a note of what features you like and what features you could live without. Then find the solution that fits your needs and your budget.
And you too can make the move into the twenty first century, as your business joins the ranks of E-Commerce.
