POV - How I set up credit card processing online
Note: With the vast array of available options, researching, choosing, and setting up online credit card processing services can seem like an overwhelming task for any type of merchant. Following is a fictitious first-person example of how the experience could look.
After a long, frustrating, and unsuccessful search for a high quality, durable, affordable, and super bright light for my mountain bike (yes, riding at night is a thing), I decided the market was ripe to go into business selling the lights online. I had always wanted to start my own business and why not go with something in an industry I felt passionate about?
As luck would have it, I found a great supplier that could private label the perfect mountain bike lights at a great price. A friend who worked in advertising helped me come up with a business name and logo for my new business. We designed a website and put together a marketing and SEO plan.
The last thing I had to figure out was how to accept credit card payments on my website. I thought setting up credit card processing online would be easy, but it turned out to be more complicated than I had ever imagined. Now that I’ve done it, though, I realize it didn’t have to be so difficult. I hope others can learn from my experience and have a much easier time.
Starting point: merchant services
I began by researching how to accept credit cards online. The first thing I learned is that I needed a merchant services provider to help manage the entire transaction process. Merchant services are often provided by a payment processing company that helps with everything from setting up a payment gateway to accept customers’ payment information, to managing the transaction with my acquiring bank and communicating with the credit card associations and my customers’ issuing banks to approve the transaction. And finally, making sure I’m paid for the credit card transactions.
Features to look for in credit cards acceptance
Next, I began looking into the different features merchant service providers offered, and considering which I should offer to my customers. I had no idea there were so many options!
First, I knew I wanted to be able to accept all types of cards, including Visa, MasterCard, American Express and Discover—and debit cards as well. I hadn’t thought about it before but I definitely wanted to accept checks, and ACH payments, which allow customers to enter their bank account information and make an electronic payment. I noticed a lot of the online businesses in the bike industry accepted Apple Pay, Android Pay, and Samsung Pay so I figured I needed to be able to accept those mobile wallet payment types too.
Throughout my research, one thing that stood out was the importance of payment security, both to help customers feel their information was protected when making an online purchase, and to help reduce my risk of data theft and fraudulent transactions that can lead to chargebacks and damage to my business’s reputation.
I learned about fraud and data protection technologies such as payment tokenization, a process that substitutes a “token” for customers’ data which renders the data useless if stolen. I found out about point-to-point encryption which encrypts payment data to protect it throughout the entire transaction.
I read about virtual terminals that allow me to use my computer like an in-store terminal to process credit card sales over the phone or when I go to a trade show. And if all that wasn’t enough, I found out I could offer gift cards and loyalty or points programs on my website. All of these features sounded great. The question was, what would they cost and how in world would I implement them?
Choosing a payment processing company
While I was considering all of these features, I needed to find a payment processing company to help me out—and that is where it got a bit challenging. Turns out there are many companies that offer merchant services, and many seem to offer the same services at similar prices.
So I continued my online research and talked with other business owners I know who have credit card processing. The consistent message I heard was to focus on these important offerings: the latest payments technology to facilitate quick transactions, great customer support, robust payments security solutions, ways to control chargebacks and other potential costs, and fast payment transaction deposits.
By focusing on these attributes, I narrowed the list of potential providers to just a handful. Then I talked with each one to find out if they could provide the services I wanted. I made my final decision based on how comfortable they made me feel in their ability to help set me up to accept credit cards, to provide training and ongoing support, and to make sure I was paid fast for card transactions. I also asked each company for references and learned a lot by talking to their clients, especially about the quality of their customer service. This process was super educational and helpful in making my decision.
How I set up my online payment processing
This was the easiest part. The payment processor I choose sent me an application to complete. I needed to provide information like how much I thought I would sell each month and the amount of each transaction. I also had to submit some basic business information such as my business legal and dba name, contact info, business license, and a voided check, as well as my personal contact information.
Because my business was new and I did not have a track record of accepting payments, I also had to provide some personal financial information and sign a personal guarantee. That was it. My application was reviewed by the processor’s underwriting team and in less than a week, I was approved and able to start accepting payments on my site.
What I learned about the setting up the merchant account
While the process of signing up for merchant services to process credit cards online may seem daunting, it actually isn’t that difficult. In fact, now that I’ve done it once, I’d say it’s a pretty simple.
One thing I would do differently though, and would recommend to others in the same position, is to begin by looking for a good payment processor. In addition to helping set up a payment gateway, a good processor can serve as a consultant, helping you learn how payment processing works and determine the best investments in features.
This process really worked for me, as my online payments solution is working seamlessly. Without the distraction and hassle of dealing with technology I’m not too familiar with, I’ve been able to focus on keeping up with customer demand for my products, and coming up with new ones, too—my latest is a light powered by solar energy!