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Credit Card Processing
Accept credit cards on your website

When you first start up in business, one of the trickiest problems is finding an efficient, low-cost method for accepting credit cards. You could accept cheques as payment, if you are only selling nationally, but as 90% of online shoppers use credits cards, you are likely to lose many sales.

The choice is usually between having your own merchant account or using a third party solution such as PayPal. Merchant accounts usually have high annual and monthly fees with relatively low transaction fees. Third-party providers often do not charge annual or monthly fees but have high transaction charges. Other third-party providers include Nochex and, more recently Google Checkout.

If you use Nochex you will need to make sure that the account is used regularly otherwise Nochex will suspend your account without notice or warning and will charge you a £20 dormant account fee — again, without warning or notification. For more details, please have a look at my Nochex Problem learning blog.

Google Checkout has the advantage of the Google brand, but it also has the drawback of your customers needing to open a Google Checkout account before you can receive a payment from them. I had some difficulty in integrating my shopping cart software with Google Checkout, but I managed to solve the problem and it is now working fine. For more information, please see my article on Google Checkout Integration.

Merchant accounts look more professional and probably retain more sales because there are fewer steps the customer has to take when paying for your products or services. When starting out, some small and home-based businesses may find that running a merchant account is too expensive so they opt for a third-party solution.

If your are seeking to expand your business beyond the hobby or part time level, it is probably best to get a merchant account through a company such as WorldPay. If the costs still seem too much, you can often get reductions by joining a relevant trade association.

PayPal also do their own merchant account in the form of 'Website Payments Pro' but they also have a virtual terminal which you can use to accept payments by phone, fax or mail for about two-thirds of the cost of their merchant account.

Getting connected

Once you have set up your merchant or third-party account, you will need to connect your products to the payment processor. Many providers will give you the code which, when pasted into your web site, will display a button for each item that you are selling. The following is an example which you can click to donate 1 to the running of this web site:

The problem with this approach is that your customers will have to go through the payment process for every item they buy — which is fine if most of your customers only make single purchases, but is a real disincentive for multiple purchases.

The answer to this is to use shopping cart software. You can buy this software, but I started by using PayPal's shopping cart. Later on I wrote my own shopping cart software to give greater flexibility and imported the total amount spent into a standard payment button. We are considering producing an eBook on how to write shopping cart software. Please contact us if you would like to be informed when it becomes available. We will also be offering a 20% discount on the launch price if you complete a simple survey which will allow us to gauge the demand for this product.

All this assumes that you already have your own web site. If you don't, there are many suppliers who will provide one for you — SiteSell Build-it is one supplier who provides a complete solution — but it is possible to trade on the Internet without having your own web page!

One of the ways if doing this is through Amazon using their Marketplace facilities. The cost per sale is high, but they handle all the credit card processing and you get your products advertised on Amazon. You can sell books and other items on Amazon on a fee-per-sale basis, but you will need to pay a monthly fee if you want to upload in bulk, download reports or create a new catalogue listing. It is also worth paying the monthly fee if you sell more than one item per day because the selling fee is reduced for 'Pro Merchants'.

Sign up for PayPal and start accepting credit card payments instantly.