As the popularity of online shopping grows each year, more retail businesses are making the critical business decision to expand their business activities to include eCommerce. Offering products and services online increases sales potential with current and new customers while staying competitive with other eCommerce businesses.
One of the easiest ways to start an eCommerce platform is to offer credit card payments, but how do you offer it online as a small business owner?
In this article, we discuss how to accept credit cards on your website.
The two most popular methods for accepting credit card payments are setting up your merchant account or using a payment processor. The option and company you choose to fulfill online transactions will depend on your overall needs, but before you make your final choice, it does help to understand a few details about online purchases.
Running credit cards online is a powerful way to increase your average sales, but similar to running credit cards in a brick-and-mortar store, there are a few steps in eCommerce sales that require a fee. Some set fees can't be changed, while others vary by provider.
Remember that though rates vary by the provider, the rates can also depend on your business performance. For example, it can fall on the higher side for high-risk businesses. Also, note that many processors offer additional benefits worth evaluating for their price.
Online transactions are also characterized as card-not-present transactions. You are not physically handling the card, and these have a higher processing fee than in-person purchases due to a higher risk of fraud, but using a payment gateway can help reduce this cost. More on that in a bit.
Shoppers can place their entire transaction online with an online payment form and payment gateway. You will need the right tools to initiate these transactions, such as:
Here are the steps to set up online credit card payments. Your merchant services provider can assist with each step, and BNG Payments does this work often.
When selecting a processor, look for payment gateway capability and a reputation for quality merchant services.
Keep in mind that the processor should be able to aid with other steps in the setup process.
E-commerce sites need a dedicated area where customers go to access your payment form and shopping cart.
There are many compatible carts available to meet your business needs, including custom-built shopping cart options with integration with emailed invoices and sales advertisements via links and one-click checkout options for easy payment processing for high-intent shoppers.
When designing your checkout page, boost your checkout conversion by creating a custom shopping cart with an ultra-simple checkout experience. Make the interface intuitive and clean, ensure the button at checkout is prominent, and design the page to fit your brand identity (logo, colors, etc.). To improve checkout conversion even further, allow for customer financing checkout options.
Some website providers, such as WordPress, come with an easy-to-install shopping cart plugin, and you can also purchase shopping cart software separately. If you use a third-party provider for payment, they can provide you with a link for payment.
A merchant account and a payment gateway may come separate depending on the type of account you open. You can also consider using an all-in-one solution that combines both for easier processing and improved service under one roof. The more established the business is, the more benefits you get, such as additional payment methods capabilities and competitive rates.
A merchant account is a business bank account explicitly designed for merchants to accept online and credit card payments. It is a separate account from your business account.
In the steps of a sale, the bank sits between your business and the credit card company to authenticate the funds and handle the behind-the-scenes technology. After the bank receives consumer credit approval, you accept the funds in your merchant account. Since this business banking method moves funds before the shopper pays the credit card bill, the funds are preauthorized and sent to you from the bank as a line of credit.
A merchant account is offered in one of two ways: directly through a bank or through a third-party payment processor (TTTP).
A merchant account through a bank can work much like a TPPP by authorizing funds, and a merchant account costs less than a TPPP, which is particularly beneficial if you run ultra-high volumes of transactions. Still, there are some challenges. One that most business owners complain about is the extensive application process, even for basic accounts. They often have complicated application programming interfaces that require information like:
Banks sometimes charge setup fees and may ask to sign up for a long-term contract. Plus, if you already have a TPPP to run in-store credit card transactions, you will have more than one company to manage.
The infrastructure of bank accounts is also not as in-depth as a TPPP, which specializes in this type of work.
If you still decide to stick with your merchant account, your current bank is an excellent place to start. If they don't offer it or the rates are too high, try other local banks and even consider moving all your business bank accounts to the lowest-priced provider for an improved relationship and potential cost savings.
A TPPP also offers a merchant account, and since they also provide gateway platforms, you benefit from an all-in-one service and a smoother approval process. We offer this service at BNG Payments.
PPPs provide you with dedicated account managers that make the process of setting up and honoring credit cards easy. You can avoid issues like long contracts, long forms while still enjoying competitive fees.
Typically, TPPPs come at a higher rate than a merchant account, but with more benefits under one roof, you enjoy added convenience, and the more services you take on from a TPPP, the better your rate.
As your business grows, you can always switch to a merchant account at your bank later, but many small businesses stick with third-party providers over the long term, thanks to the ease of use.
Popular eCommerce platforms like eBay, Esty, and Shopify are just a few of the dozens of platforms that offer processing and merchant account services. If you have an account set up on any of these systems, they can accept most major credit cards as well as gift cards. Setup is pretty simple: you can add the the-commerce capability option onto your affiliated website. You will need to add your employee identification number (EIN) and some background baking information.
These companies typically charge a monthly and per-transaction fee.
A payment gateway is software that communicates with the credit card company to gain authorizations or denials for customer payments. A gateway encrypts the online shopper's credit card information from your website's payment form and sends it to the credit card company via your payment processor. Since PPPs provide this service, the term payment gateway is sometimes used to describe a TPPP. You will need to fill in an application with financial information to enroll, but the process becomes easier when you use the same TPPP that oversees your credit card transactions.
Some companies provide a gateway, merchant account, and processing services. There are some added savings and a more straightforward setup having everything under one roof.
Some customers may have concerns about submitting credit card information online, but this type of transaction is exceptionally safe. Credit card fraud often takes place in person, and online purchasing avoids this issue. There are also a large number of built-in fraud protection tools in place. Additionally, each step of an eCommerce credit card purchase (payment gateway, payment processor, and movements of money across the credit card network) comes with its fraud protection. When all combined, you benefit from superior fraud reduction and fewer chargebacks. You gain the benefits of a comprehensive and professional fraud prevention team.
When shopping for your merchant account provider, online payment gateways provider, and online payment processing provider, having them all under one roof improves service, attention, and cost savings. BNG Payments offers all of these services, but we also extend these same services to cover other payment options beyond credit cards. We provide a hands-on application and setup process to make taking electronic payments quick and easy. From opening a merchant account to creating a shopping cart, running transactions, and providing advanced fraud protection at each stage, you get one source for all your needs.
Additionally, you also enjoy improved customer service under one roof, making it easier to resolve issues as they arise. And we offer competitive rates with precise readings on all associated costs, including flat-rate payment processing.
To learn more or get a free quote, contact us here.