So, you have decided that the market you are in requires that you accept credit cards on line.
Where do you go from here?
You may have looked into setting up your own market account, but the requirements at the bank were to steep, and the options too limiting.
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| Besides, even if you have the account, you will still need third party to help you verify the credit cards.
So, if your business is just starting up or still on the small side, and your products and clientele do not require a high finance image, then the third party merchant account may be a good fit for you.
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What do they offer?
Like any business service, the answer will vary based on provider and price. At a minimum, they will provide:
A way to integrate their service into your web application.
This will range from a link to their card processing site to a set of controls that blend seamlessly with your web site.
The shared use of their own merchant account, which will be used to process the credit card payments.
A credit card approval service, which is as important to their business as it is to yours.
More so, perhaps, since the processing of credit cards IS their business.
The return of the critical information to your web application, including:
Approved/Declined status
Approval numbers or codes, as applicable
Information on the card used (Amex, Master Card, Visa, etc.)
The actual handling of the monies involved.
The third part merchant account provider will forward to you on a regular basis the amount of money your customers charged using their services, less their fees.
How do you use a third party merchant account service to begin accepting credit cards on line?
From the Technical Side:
The functionality to perform this service will need to be added to your web site.
There are no 'Operators Standing By' or 'Friendly Courteous Customer Service Representatives' behind your web page.
For all of it's image and appeal, it is still just a computer program. This feature, like any other on your site, will require additional computer software to function.
The options are wide and varied, but, in general, the third party merchant account services will provide some or all of the following solutions.
Link to their processing site:
This is often the simplest and most cost effective solution to accepting credit cards on line.
By installing their control into your web site software, the customer just clicks the payment option and is whisked away to the page that handles the actual transaction. Upon return, your web application is informed of the transaction status. (Approved/Declined, etc.)
On the plus side, this is often a very simple and clean solution. Most third party merchant providers will have a variety of applets, code fragments and custom controls that can integrate with the popular shopping cart and payment handling web applications commercially available. If you have gone the Custom Web Application route, many providers can supply programming tools that can be used to integrate their service into your custom web site.
On the down side, your customers will, at some point, be leaving your web site and entering the domain of another vendor. You will loose control on the look and feel of the application, as well as the actual web location of your customer.
Payment Option on your own site:
This is a variation of the first option where the transaction appears to be taking place on your own web site. The data exchange with the third party merchant provider is behind the scenes and invisible to the customer.
On the down side, this is not offered by all providers, and will require a more sophisticated software interface which may not be supported by some shopping cart and web payment processing packages.
In addition, if it is offered by the third party merchant provider, it is almost always part of a premium service. (By premium, read more expensive, either in terms of sign up fees, per transaction fees, or both.)
As part of a full service web hosting provider:
A new kind of web hosting service is emerging in response to the changing landscape of e-commerce.
In addition to a domain name and a server to hold your web page, the full service e-commerce web hosting provider will supply you with a web application that can be tailored to fit your business, including controls to access one or more of the third party merchant account providers.
From the Financial Side:
The requirements for using a third party merchant service are fairly simple:
Application:
If you expect to share their merchant account, you must prove that your business is legitimate, and that they can expect your customer base to be, on the most part, solvent.
This is usually not too difficult a hurdle for even the smallest and newest of web based businesses. After all, you are essentially an agent for their credit card approval and processing service.
You bring customers the customer you have found to them.
Fee Schedules:
This will vary greatly based on the company and the level of service. Each third party merchant account provider service will have one or more of the following:
Application or Setup Fee.
Monthly/Quarterly/Yearly membership fee.
Per transaction Flat Fee.
Per transaction Percentage of Sales Fee.
Other things to consider:
Service Area:
While some providers, like PayPal, are global, others are restricted to one or a few countries.
(i.e. The United States, Great Britain, the European Common Market Countries, etc.)
In addition, some services among a provider's offerings may be more restricted than others.
Software Compatibility:
Some providers will be able to offer a wide range of integration options, some a smaller range, some only one.
You will need to match the third party merchant account provider with your own web application software requirements.
Type of transaction:
While many providers can accommodate almost any transaction from Hot Dogs to a Hotel Room, others are more specific. Many are tailored to just a single type of transaction, such as:
Actual sales of real goods, requiring shipment of product.
The sale of software of other intellectual properties.
Even among those who handle a wide range of transaction types, they are better at some than others.
You will need to make sure that the provider you choose not only can handle the type of business you are in, but that their integration tools are well suited to to the product or service that you sell.
Today's business landscape is filled with choices, from phone service provider to data processing systems, from inventory control to accounting.
Each a different piece in your potential business arsenal.
You must choose which combination of pieces match your overall business strategy.
The options are many, the advantages clear.
Do your research and start building your business by accepting credit cards on line.
