Accepting online payment

What do you need to consider when charging customers online?

The more attractive the options for payment are to your site visitors, the more chance you have of turning browsers into paying customers. It’s vital that you have secure and easy payment methods, both for the smooth running of the business and for inspiring confidence in consumers.

Merchant accounts

If you want to accept credit card payments directly though your site, you will have a ‘merchant account’. Merchant accounts are suitable for a high number of online transactions as it is a more expensive way of accepting payments. You will also need a certain amount of credibility in the eyes of the acquirer before they will accept you as a merchant. This form of payment option is not really suitable for websites which only process a limited amount of transactions.

Gaining online merchant status with a bank or ‘acquirer’ is much easier if you already process credit card payment offline – such as in a high-street shop. You need only ask your provider for an additional internet merchant account ID for internet transactions.

Payment processing companies

Payment processing companies are an alternative to merchant accounts. A payment processing company such as PayPal or Google Checkout.

If you use a company like this to handle your credit card payments, the payment point on your website will be located on their secure server. The page will continue to look like a part of your website but there may be a button to indicate that the page is managed by the specialist company.

When set up, customers buying something on your site will actually send their credit card details directly to the payment processing company. This company will confirm the order with the customer and forward all the order details to you. The payment company will then complete the credit card transaction and forward the money – minus its commission – onto you.

Even if you have a merchant account you may still wish to give your customers the opportunity to pay via a payment processing company. Many consumers are sceptical about giving lesser-known online stores access to their credit card details, and payment processing companies offer a way of making a transaction without entering credit card details on individual websites.

Online shopping malls

An online shopping mall collates a number of smaller e-retailers together on one site. The mall will host your shop as well as process the payments for you. Although they are relatively quick and easy to set up, there are some drawbacks.

They are generally the most expensive way of selling online, and may ask for both a joining fee and a monthly or annual fee. You are also less likely to have any control over the way your shop looks, as it will go through the mall’s own templates.

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