How Can Businesses Accept Credit Card Payments Online?
Conducting online business has become easy with credit card payments. It becomes easy for customers to make payment through debit or credit card. Planning to sell products or services through the internet? If yes, make sure you offer credit card payment option to your customers. There are several advantages of accepting credit card payments through the internet. For instance, you will be able to tap impulsive buyers who may want to buy from your website but don’t have cash in their account at that moment. They can use their credit card for making a payment to you instantly.
By offering the option of credit card payment online, you will be securing more sales. It will also help you tap international customer base. If your customers are based overseas, they would find it easier to make payment through their credit cards. This payment option will not only take care of currency differences but also save time as they won’t have to send a cheque to the vendor through mail.
Basically, there are two methods of accepting payments from credit cards- by using your merchant account or through a third party merchant. Merchant account can be opened with a bank whereas third party merchants are companies who accept credit card payments on behalf of the business owners for some fees and percentage. It is also known as payment gateway.
Through merchant account, it becomes easy to accept payment from credit cards, debit cards, gift cards and other forms of electronic payment. It is necessary to apply for a merchant account and accept merchant processing terms before you begin accepting credit cards on your website.
It is expensive to open your own merchant account when compared to having a payment gateway. Some third party merchants don’t have any set up fee; however, the transaction fee (a fee paid to the third party merchant or bank for each transaction) is higher when using a payment gateway.
For online payment credit card it is convenient to use a third party merchant when the business owner is not sure if he or she can make much out of their products or services. If you have just started your business and you wish to see how things work, opt for a third party merchant rather than spending on the merchant account. The payment gateway will do everything for you and if you have earned enough, you will be receiving a cheque from them at the end of each payment period.
Another benefit of using a payment gateway is that if you have chosen a reputed gateway, your customers will be willing to buy from your website since they will know that it is safe to provide their credit card number when shopping from your site.
Even though having your own merchant account will lower your transaction costs, you need to be careful in reducing the risk of processing credit card payments on your own. Risks involve credit card frauds and charge backs.