Payment Gateway and Accepting Credit Cards Online – The Best Solution for Your Business

An often overlooked and under analyzed segment of building your eCommerce business is the backend processing of your orders. Entrepreneurs invest lots of money and time into making sure their site design is just right, but often gloss right over their order processing systems. Invest a fractional of your time spent in making design tweaks into choosing the right payment gateway, merchant processor, and bank account, and you will save yourself a lot of money!

Payment Gateways

Quite simply, a payment gateway is the system used to transmit your customer’s payment information from your secure website to your secure merchant processor. Think of it as the terminal that collects, encrypts, and securely transmits the data to your merchant account. There are many different services to choose from when picking your payment gateway, although, it is important to know that the gateway you choose must be compatible with your eCommerce solution. PLEASE be sure to get a list of the different gateways your eCommerce solution accepts, and contact each one to learn of their rates and service offerings.

According to a 2009 Internet Retailer report, the 3 most commonly used payment gateway providers by the top 500 eCommerce websites are:

  1. Chase Paymentech Solutions LLC. (113 of the Top 500)
  2. PayPal Inc. (75 of the Top 500)
  3. Cybersource Corp. (45 of the Top 500)

All-In-One (Payment Gateway and Merchant Processor)

PayPal (and other bundled solutions) offer an all-in-one service where you get the payment gateway and the merchant processor together. The advantage here is that you do not have to manage two separate accounts. Rates, however are usually on the higher end of the spectrum.

For example, one of PayPal’s services boasts a flat rate (for national sales) based upon your sales volume. The more you sell, the less they charge you to process the transaction. The benefit here is that regardless of which credit card is used (MasterCard, Visa, Discover, or the dreaded American Express), or whether the card is qualified, you get charged the same flat rate. This is unique to PayPal and other all-in-on services.

Merchant Processors

The payment gateway transmits the encrypted billing data to your merchant processor who is then responsible for routing this data to the credit card network. The credit card network verifies that your customer’s credit card is valid/has enough funds to cover the transaction, then notifies the payment gateway, which then communicates with your eCommerce solution. If the transaction is approved, then the merchant processor will transmit your settled orders to your bank account (sometimes this requires a manual process).

The merchant processor is the behind the scenes system that communicates with the payment gateway, your customers credit card network, and your bank account. This is a streamlined way to accept credit cards online. It’s important to know whether your payment gateway, merchant processor, bank account, and eCommerce solution all work together. Please make sure your merchant processor interfaces with your payment gateway and your bank account!

What to Know

Payment Gateway’s – when choosing a payment gateway verify and review the following:

  • Gateway Setup Fee – many payment gateways will require an initial payment to configure your gateway.
  • Monthly Gateway Fee – this is an ongoing fee for the privilege of using the payment gateway
  • Per Transaction Fee – every transaction made gets charged a fee. This also includes; refunds, voids, and declines.
  • Batch Fee – if you choose to settle up your transactions each day, then you will be charged this fee on a daily basis.
  • API Integration – make sure your websites shopping cart can integrate with the gateway of choice.

When reviewing this data make sure that you understand all the fee’s and requirements. Also remember that you can negotiate pretty much all these items (if you are processing a lot of orders). It’s definitely worth a shot to call and try to get the best rate you can! For example, Authorize.net had a package for high volume sites where they charged $50 a month, but provided 2,000 free transactions plus.07 per transaction thereafter. Added up over time, you can save thousands of dollars per year!

Merchant Processors – when choosing a merchant processor verify and review the following:

  • Setup Fee – same as above
  • Monthly Fee – same as above
  • Per Transaction Fee – same as above
  • Contract – same as above
  • Qualified Discount Rate – this is a very tricky fee to track. The Qualified rate is for specific credit cards, and credit card types.
  • Non-Qualified Rate – understand which credit cards do not qualify as the discount rate so you can crunch the numbers. This fee can be as much as double your discount rate.
  • Minimum Processing Fee – some merchant accounts will require a minimum monthly transaction threshold. If you don’t meet this threshold, you are charged another fee.
  • Order Refund/Chargeback Fee – when orders need to be refunded, or are charged backed, you are usually going to be charged another fee for this.
  • International Fee- check the rates for customer orders outside of the United States to see if you are charged extra.

Services like PayPal charge a flat percentage of the transaction (usually around 2.9% depending on volume), plus the per transaction fee. Most merchant processors charge in the range of 2.2% – 2.65%.

There is often a debate which is the best solution for eCommerce credit card processing.

What do you recommend when it comes to payment gateways and merchant accounts?

E-commerce Merchant Accounts – Catering to Your Online Needs

An e-commerce merchant account will allow you to utilize the power of online business through the internet and give you an upper hand over the businesses that are unable to offer payment processing services online for their goods and services because they do not own a merchant account. An e-commerce merchant account will be able to offer you favorable circumstances and will open all doors to success.

An e-commerce merchant offers you hassle free solutions and allows you to provide your customers with various online payment processing solutions. The payments your customers make will go directly into your bank account and you will be able to make the sales online without any problems at all.

All kinds of high risk and offshore businesses can find a merchant account for their business kind. Whether your business is based in the U.S or the U.K, Canada or anywhere in the world, an e-commerce merchant account allows you to provide your services globally to a wider market. You will be able to approach a far reaching audience. Not just that but you will also be able to provide various additional benefits to your customers like various payment processing services, online fraud protection, real-time processing, recurring billing, multi-currency, online reporting, major credit card acceptance and so much more.

While looking for a good merchant account, don’t forget to research and compare the fees so as to get a better idea of the providers and which one can cater best to your needs. Remember to make sure about all the details before you sign up with any merchant account provider. An e-commerce merchant account will allow you to efficiently sell your goods and services and provide the best possible functionality. An e-commerce merchant account will make it possible for you to not just sell your products and services online but also to approach a wider audience and reach out worldwide.

Your e-commerce merchant account will give you automation and take your business to new horizons. With more and more people buying online your e-commerce business will have an immediate sales boost with an e-commerce merchant account.

Online Pharmacy Credit Card Processing

High risk management accounts by their very name will always be treated with a degree of caution by the banks and other financial institutions but they are manageable nonetheless. As evidence shows however where the identity of customers cannot be verified banks will be extremely cautious and may refuse applications as a result to minimize those risks. The primary risk factors which are taken into account tend to be the potential of fraudulent transactions and charge backs. Furthermore banks and financial institutions will classify merchant accounts based on the risk factors involved.

Nowadays, online offshore businesses have become widely acceptable as a profitable source of income. The concept of online offshore business is quite simple. A commodity that is expensive and rare in a particular country might be cheap and abundantly available in another country. So, an online merchant arranges for the transfer of this commodity to customers who are in need of this product. Thereby, the customer is able to obtain the product easily and rather inexpensively than that he could have purchased from his own country.

The US and the UK governments have imposed restrictions on the trade of pharmaceutical products considering security reasons. This has resulted in inflated prices of pharmaceuticals within these respective countries. Online pharmacy merchants have identified the potential profit that is hidden in these countries. They have pharmacies based on countries where the cost of manufacture and trade is rather less compared to the US and the UK. So, all they have to do is arrange for proper transfer of the pharmaceuticals from these countries to potential customers in the US and the UK.

But this online offshore business poses an eminent flaw. In these transactions there is no security that the customers are dealing with legitimate suppliers and vice versa. Hence, the quality of the products obtained is always a concern for the customer. The World Wide Web is filled with money thirsty hyenas who will stoop to any extent to get a chunk out of your hard earned money. Also, there is the possibility that some frauds might pose as a potential customer and acquire the pharmaceuticals and sell them in the market illegally.

All these risk factors included have made banks and financial institutions to classify online pharmacy credit card processing as high risk merchant accounts. Therefore, these online pharmacy merchants find themselves in a hard position to find a credit card processor to look after their online transactions. If they go ahead with the wrong international bank or credit card processor, they will see themselves out of the business very soon. So, this is a delicate area which requires much attention and research.

Today there are many high risk merchant acquiring banks that provide merchant accounts for online pharmacy credit card processing. If you can convince these banks that you are a legitimate online pharmacy merchant, setting up and online pharmacy credit card processing account is very easy. In cases where the merchants conduct an inbound or outbound telemarketing business that sells pharmaceuticals over the phone, acquiring a merchant account can get a bit difficult, but is not impossible. Summing up, things have improved now enabling an online pharmacy merchant to run his business hassle free in terms of establishing his merchant account.