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.)
Credit card payments allow you to take advantage of the following types of customers:
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.
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.
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.
There are actually two ways in which you can accept credit cards on your site.
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.
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".
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.
Update (4 Sep 2024): I have removed the list of 3rd party merchants since I no longer have any sites that use any of them, so I can't be sure that the companies I listed remain reputable (or even still exists).
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!
Copyright 2000-2024 by Christopher Heng. All rights reserved.
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How to Accept Credit Cards on Your Website
