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How to Accept Online Credit Card Payments
If you have an online business, there are many advantages in giving your cardholders the means to pay for your products or services through a credit card. Customers expect a professional company to have this facility and since paying by credit card offers cardholders some protection on their purchases they may be less trusting if you do not. Paying by credit card is also seen as being instant and convenient, and potential customers may be tempted to take their business elsewhere without this option. Both of these factors mean that companies who allow credit card payments often have the greatest turnover and see the biggest profits.
Setting up the means to take credit card payments can be intimidating if you are a small business owner and are not sure what steps to take. Essentially, you have two main options.
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The first option is to use a third party merchant such as CCBill and Clickbank. Some - but not all - third party merchants charge a small set up fee. But mostly you pay for their services through them taking a percentage of the profit on every purchase made via credit card. Using a third party merchant is best suited to very small or new business ventures as the set up fee is low or non-existent (essential for if you are unsure whether the products or services you offer will sell well). They also make it east to implement, as there is technical support on stand by to assist you if you encounter problems in setting up the system on your website. Once it is set up they handle everything, and you will receive your money at the end of each payment period. A third party merchant should also have excellent security procedures in place for preventing fraud and protecting your customer's details.
The downside of opting for a third party merchant is mainly that if your product does become successful, you may be paying out an awful lot in transaction fees. You also will need to spend a great deal of time initially sourcing out the best third party merchant to suit your needs. Third party merchants can vary widely in how they operate, and unfortunately some are less reputable than others.
For more established businesses, your best option is to set up your own merchant service by applying directly to the bank. Requirements for merchant accounts vary from bank to bank so you will need to speak directly to them to obtain their terms and conditions. The set up fee is much higher than if you were to use a third party merchant, but the transaction costs are much lower. Therefore, if you have a successful business you are saving money in the long term.
The negative aspect of setting up your own merchant service is that you are solely responsible for setting up fraud prevention measures and protecting your customer's credit card details. The importance of this should not be underestimated, and failing to do so can lead to your company being penalised under the Data Protection Act.
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