When running a business online, whether you’re selling a service or a product, it’s vital for you to understand the options available to you for accepting credit card payments. It’s a subject that can seem complicated at first, but it doesn’t have to be.
To help better understand your options, we have outlined the top providers and how they can best help you:
What’s an IMA?
An IMA is an Internet Merchant Account. You can set one of these up with your bank. Even if you already accept card payments in-store you will need to ask your bank about taking payments online. The bank is responsible for authorizing transactions and exchanging funds.
There will typically be fees associated with these payments. The issuing bank (the one giving you their money) charges “interchange fees” and your bank will charge for “acquirer’s fees”. Your bank should inform you about these fees before you sign any sort of agreement for their services. Additionally, if you do not want to go through your current bank, there are alternative payment service providers who can process payments on your behalf, then deposit the funds into your bank account.
What’s a PSP?
A PSP is a payment service provider. These will provide the pages where customers will input their details and make the actual payment. Think of them as your website’s cashier. They screen for fraud and safely pass the details on to your bank for processing.
Depending on which providers you use and how you plan on using them, there might be some charges involved. It’s also worth noting that some IMA providers also offer PSP solutions and vice versa.
When looking for a PSP, make sure they offer the following features.
- SSL encryption on all payment pages.
- Authentication procedures
- API (application programming interface) to securely post data from your website
- Payment Confirmation within the API
- Redirection back to your website once payment is complete.
In addition to these you might also want to check for other options. For example, do you want it to pre-populate fields based on your customer’s details (such as copying the customer’s address)? Do you want the PSP pages to match your website’s layout and blend seamlessly with your other pages?
Who are the Top Payment Processing Companies?
PayPal is probably the most well-known. It originally began as a way to make transactions on eBay and grew from there. The main benefit of using PayPal comes simply from the fact that it is a method of payment that is well known and trustworthy.
Benefits of PayPal:
- PayPal offers services to integrate the PayPal system with your existing checkout
- Customers feel secure because they don’t have to give their credit card information directly to your store, keeping trusted PayPal between you and their credit card number
Negatives of PayPal:
- Money is not deposited directly into your bank account, but has to be manually withdrawn instead
Costs and Fees:
- Standard Merchant Account: $0 monthly + 1.9-2.9% and $0.30 per transaction
- Advanced/Pro Accounts: $5-30 monthly + 1.9-2.9% and $0.30 per transaction
Authorize.net is the other big name in payment processing. It is a company that is trusted and offers a lot of extra security and fraud prevention features. Authorize is a little different from PayPal because it won’t hold on to your money, it will deposit the funds directly in to your bank account. This aspect of the company makes it ideal for any business that doesn’t want to be constantly checking an extra account.
Benefits of Authorize.net:
- Money is deposited directly into your bank account
- Company is reputable and works well with vendors
Negatives of Authorize.net:
- Customers do not have the established trust they have for PayPal
Costs and Fees:
- Setup: $99
- Monthly: $20
- Per Transaction: $0.10 + variable %
- Per Batch (ie. Bank Deposit): $0.25
- Optional “Fraud Detection Suite”: $9.95 month
- Optional “Automated Recurring Billing”: $10.00 month
- Optional “Customer Information Manager”: $20.00 month
Google Checkout/Wallet is an emerging payment processing services with trusted Google. Originally designed for the transaction of digital goods sold on Google platforms, he fees for using this one are only per transaction. Similar to PayPal these start at 2.9% plus $0.30 per transactions (under $3,000).
2Checkout offers attractive design elements with its “Dynamic Checkout.” This idea of this is to offer something that looks good and works well on any device, whether that’s a tablet, a PC or smart phone. 2Checkout has tried to simplify their payment plan. There are no monthly fees only a $10.99 application fee and a flat rate of 5.5% and $0.45 per transaction.
CCBill has a lot of features that aren’t typically seen elsewhere. It can help you to charge for subscriptions, or to accept payments for downloadable products. If you’re looking to sell videos, music or apps, CCBill might just have exactly what you need. CCBill is very upfront about the fact there are no set-up or monthly fees. Unfortunately the transaction fees are a little more hidden away and this might because they’re fairly high. CCBill use your weekly earnings as a bracket. For example if you are earning less than $5,000 per week your transactions fee will be a large 13.5%
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