Accepting Credit Cards on Your Website

How to accept credit card payments on your site without a merchant account


Accepting Credit Cards on Your Website

by Christopher Heng, thesitewizard.com

Are you thinking of selling things on the web? If so, you will probably also be considering some way in which you can accept credit cards on your site. Since new webmasters who visit thesitewizard.com often ask me about how they can get started accepting payments in this form, this article provides some basic information on adding credit card payment facilities to your website.

(Note: if you do not already have a website, you may also want to read How to Create / Make a Website: The Beginner's A-Z Guide.)

Why Do It?

Credit card payments allow you to take advantage of the following types of customers:

  1. Impulse buyers

    After reading your advertisements and hype on your site, buyers would be all fired up about your product. If they have a means of making a purchase immediately, you've secured that sale. If you only allow cheque ("check" if you use a different variant of English) payments, the additional time it takes for them to get their cheque book and mail out the cheque may be a deterrence. They may also have second thoughts later.

  2. International customers

    Credit card payment is a tremendous convenience if your customers are overseas. It automatically takes care of the problems of currency differences as well as the time it takes for a cheque to travel to the vendor. You will lose a large number of overseas customers if cheque payment is the only way you can accept payment.

  3. It's the norm these days

    Nowadays, when you sell something on the Internet, everyone expects you to accept credit cards. In fact, it is now the norm so much so that it is inconceivable that any vendor not accept such things.

Methods of Accepting Credit Card Payments

There are actually two ways in which you can accept credit cards on your site.

  1. Using Your Own Merchant Account

    To do this, you will need a bank that will allow you to open a merchant account. Requirements for this will vary from country to country, and you should check with your local banks for more information on this.

  2. Through a Third Party Merchant

    There are numerous companies around that are willing to accept credit cards payments on your behalf in exchange for various fees and percentages. These are also known as "payment gateways".

Which Method Should You Use?

The initial costs of opening your own merchant account is usually higher than when you use a third party merchant. Indeed, some third party merchants have no setup fee at all. However, the transaction fee (which is what you pay the bank or third party merchant for each sale) is much higher when you use a third party as compared to when using your own merchant account.

A third party merchant is usually convenient to use when you don't know if you can actually make much out of your product or service. If you just want to test the water to see how things are, this is usually a good way to start. It is also convenient in that the merchant takes care of everything for you. You just get a cheque at the end of each payment period (if you have earned enough) and concentrate on your products, services and customers.

Another benefit of the payment gateway is that if you use a reputable one, your visitors may be more willing to buy your goods online since they trust that merchant to keep their credit card numbers safe.

While having your own merchant account lowers your transaction costs, you have to be careful to minimize your risks since you'll be processing the credit card payments yourself. By risks, I mean that you will have to deal with things like fraud (where people buy things with a stolen credit card number) and chargebacks (where someone forcibly reverses the payment to get a refund through their bank) yourself. This is not to say that there are no risks attendant on using a third party merchant.

Some Third Party Merchants / Payment Gateways

Here's a list of some third party merchants that you might want to consider if you're looking for ways to accept credit card payments. I have not used any of them myself, as a vendor (except for PayPal, and that was a very long time ago), so scrutinize them all carefully and use them at your own risk.

Note that rates and stuff that I publish below were correct at the time I investigated these vendors. It will most likely have changed by the time you read this since the merchants tend to modify their rates from time to time according to market conditions. Make sure that you check the current (up-to-date) details from their site and read reviews from others who have used them before making any decision.

2checkout: Avangate's 2checkout accepts credit card transactions for any type of product, for a charge of 3.5% + $0.35 USD per successful sale.

PayPal: This well-known service allows you to set up a Premier or Business account (you are subject to certain limits when receiving credit card payments if you use a Personal account, and probably also higher fees per transaction). The charges range between 1.9% + $0.30 USD to 2.9% + $0.30 USD for each transaction if you are in the US. Non-US users are charged different amounts according to the country.

Stripe: There are no setup fees. Transaction fees vary according to your country (ie, the vendor's country). For example, if you are in the US, it's 2.9% + $0.30 per US transaction and 3.9% + $0.30 per non-US transaction. In the UK, you are charged 1.4% + 20p for European credit cards, and 2.9% + 20p for non-European cards. And so on. For disputes (like chargebacks), there is an additional fee levied, unless the customer's bank resolves the dispute in your favour ("favor"). Like the other charges, the fee varies from country to country, and is USD $15 in the US, £15 in the UK, and so on.

WorldPay: If you are in the US, UK, Brazil, Japan, China, Mexico, Argentina, Australia, Singapore, or Germany, WordPay lets you set up an account where you can receive payments made with credit cards as well as certain other digital wallets. Their website does not list their rates, and requires you to contact them for such information.

How to Put an Order Form or Shopping Cart on Your Website

Once you have signed up the vendor of your choice, you will be able to put an order form or shopping cart on your site. Each vendor has a different method for this, but most, if not all, will provide you with premade forms that you can customize for your product or service. If you use PayPal, and don't know where to start, see my tutorial How to Put an Order Form or Buy Now Button on Your Website Using PayPal.

Trying It Out

Whichever you choose, if you are selling things on the Internet, you really have not much choice but to accept credit cards. You probably don't know what you missed until you try it out.

All the best for your business!

This article can be found at https://www.thesitewizard.com/archive/creditcards.shtml

Copyright 2000-2019 by Christopher Heng. All rights reserved.
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