Business Basics: How to process credit cards online
Welcome to Online Payments Processing 101, the starter course for anyone who wants to process credit cards online.
Maybe you’re starting an online business. Maybe you want to expand your brick-and-mortar business online. Either way, credit card acceptance and processing are essential to eCommerce. So, what are some need-to-know credit card basics?
First of all, because every business is different, the payment processing needs will be different, too. But, the good news is the explosion of eCommerce and consumers’ enthusiastic adoption of online buying over the years has created an abundance of credit card processing choices for merchants that are new to eCommerce.
And, knowing how to process credit cards online is something you’ll need to consider as you’re setting up your website. Even better, you should be exploring the how, what, and why of eCommerce while creating a smart business plan.
What are your plans for growth?
Sometimes it’s hard to assess the future of your business when you’re just starting out. However, with thorough research into the marketplace and your target audience, a product that truly solves a need, and a solid business plan, you can determine how fast you might grow, and how fast you want to grow. Your plan may well determine the type of online payment processor you choose.
Keeping small business on the small side?
If you want to keep your online business small and manageable, you may choose to start with any popular eCommerce building site. For the most popular platforms, the payments component is built right into the site for you.
Having the payments built right into your eCommerce platform allows you to get your site up and running quickly. You can take advantage of the payments package readily available with no extra work or research on your end. This package follows a plug and play type of build.
Businesses that are looking for more custom options may want to consider speaking with a payments processor to discuss additional features that would benefit their business.
Hoping to expand your business?
If you already have a brick-and-mortar business, have more complex offerings, or are planning to grow quickly, and/or intend to sell internationally, you may decide to choose a more individualized approach to your processing needs, and work with a larger provider. If that’s the case, you likely would not choose to work with a payment aggregator, but instead with a payment processor directly.
With a dedicated merchant account, you are connected directly with a payment processor and eCommerce gateway. However, unlike some aggregate payment providers, terms are negotiable, solutions are flexible and customer service is available when you need it.
To establish a merchant account, you could turn to your bank, or, if you already have a brick-and-mortar business, you could talk with the dealer who assists you with your POS system.
Another suggestion for making smart choices: interview a variety of payment processors and find out what they offer. Ask questions, probe, turn over rocks. There are a number of options out there.
If you want to grow, expand or scale up, seek out a payment processor with versatile options for whatever type of business you have and whatever way you want to sell––regardless of size.
Look for integration, collaboration and a degree of customization. A larger, dedicated payment processing company should design their system for developers––yours, as well as third-party developers who are always bringing innovative solutions to the business table. You want a company that’s ahead of the game technologically, so you gain an edge over your competition.
Ask whether a payment gateway is involved, and whether you can accept payments on a laptop or on a mobile device. Ask about the customer experience, particularly if the credit card payment process will seamlessly merge into your website. Grill them on whether they offer fast underwriting and advanced security.
How do you keep online payments secure?
Fraud wears many faces in today’s commerce ecosystem. In-store purchases are also referred to as “card present,” when a customer presents an actual card for payment. In the past couple of years, merchants have been upgrading their POS systems to enable EMV-enabled chip card payments, which offer additional security for card present transactions.
But what about online “card not present” credit card purchases? Here’s where a payment gateway comes into play. Much as a credit card terminal or reader authorizes payments in a store, a payment gateway authorizes credit cards online. Payment processors will offer a payment gateway with their system. But is it secure?
One way to know for sure is to seek out a payment processor that offers layers of security, tokenization, innovative fraud protection, and chargeback prevention solutions.
Chargebacks are a growing source of fraud, and one that many new business owners might not be aware of. Whether in-store or online, a chargeback should be viewed with some level of suspicion.
In addition, international orders are usually riskier, so make sure to ask all payment processors how they’ll protect your business when accepting credit cards from overseas customers.
In the end, security comes down to protecting your customers’ data, your business from costly breaches, and most of all your reputation as a merchant.
How to get online payments processing set up?
Clearly, it’s important to choose the payment processor best suited for your particular business. Your business is your fingerprint in a way. It has unique qualities, and you as a business owner have unique needs.
From the Online Payments Processing 101 textbook: seek out an online payment processor with versatility. One that can help you grow your business in whatever way and at whatever pace you have in mind. Read one example of how online payments were set up.