Making Money Online - Accepting Online Payments

Accepting Online Payments

One of the biggest mistakes that people can make, is not implementing the right online payment collecting solution that will be effective for their business. Payments that are made through an Internet connection with debit/credit cards come under the “customer not present” transaction.

The risk of card fraud is deemed higher when payments are made through this method and banks expect you to adhere to their rules and policies in addition to you accepting a higher level of commercial risk than the usual swiped card transaction in the off-line world.

Online Security

Some people are still very aprehensive about divulging their Credit/Debit details on a web site. In reality, E-commerce web sites are protected by a secure connection which is only accessible to authorised personnel. When you give your Credit/Debit card information over the telephone, no one can be absolutely sure that security won’t be compromised, yet we don’t bat an eyelid.

When sourcing a hosting company, be sure to thoroughly check their security technology. Using a third party processor will eliminate the worry of having a secure payment facility, as they will take care of the security issue.
 

Secure Payment Transactions

In order to make customers feel comfortable when paying online and not compromise security, you will need to have a safe way of allowing payment transactions. The three most frequently used security protocol measures are: SSL, SET and PKI technology.

Secure Socket Layer (SSL)

SSL technology is used to encrypt transaction information and to send the customer and credit card details to the acquiring bank in order for the purchase to be authenticated.

Secure Electronic Transaction (SET)

SET was initially developed for E-Commerce by MasterCard and Visa to facilitate secure payment card transactions online.

Public Key Software Infrastructure (PKI)

This security measure is a system of public key encryption that uses digital certificates from Certificate Authorities and other registration authorities that verify and authenticate the legality of each party involved in an electronic payment transaction.

What is an SSL Certificate?

An SSL Certificate is made up with a public key and a private key. The public key is used to encrypt information and the private key is used to decipher it. When a Web browser points to a secured domain, a Secure Sockets Layer handshake authenticates the server (Website) and the client (Web browser). An encryption method is established with a unique session key. They can commence a secure session that guarantees message privacy and message integrity.

Authentication

Each SSL Certificate is produced for a particular server in a specific domain for a verified business. An SSL Certificate is issued by a trusted authority, the Certificate Authority (CA). As the SSL handshake occurs, the browser requires authentication from the server.

A customer will observe the organisation name when they click certain SSL trust marks or use a browser that supports Extended Validation. If the information does not match or the certificate has expired, the browser will show an error message or warning.

Why do I need an SSL Certificate?

Having an SSL certificate will increase your trust to the customer and protect their details. Without this security, there is the risk of just anyone being able to view private information that is being transferred over the internet. Ultimately, this information could be stolen or tampered with by unscrupulous people on the web.

Internet Merchant Bank Account

Every bank will have a varying set criteria before accepting your application, such as your trading history and the risk factor etc. This is probably the best choice if you anticipate a high volume of sales. Funds resulting from your sales will not take as long to be released to your account as it would using Third Party Processors.

It can be quite difficult to obtain an Internet Merchant account if you don’t already have card processing facilities in the off-line world. Banks have strict criterium for Internet merchants that are just starting out as there is a higher risk factor involved. Some banks require you to have previously been trading for a certain amount of time before you qualify for an Internet Merchant account.

Drawbacks

• Mostly Expensive Start-up fee-one off
• Monthly fees
• Transaction fees
• Miscellaneous fees
• Can take longer to set up

There is a lot involved going down this route, and yet more research is needed to compare different banks and their rates. Be aware that there will most probably be fixed charge fees to pay even if you do not sell anything.
Most Banks charge extra fees for additional products such as Fraud Detection and Fraud Protection.

Definition of a Payment Gateway

A Payment Gateway is a service that is provided by a billing processor to check, authorise and process Credit/Debit card payments. This will be required in addition to an Internet Merchant Account, some banks offer their own payment gateway as an additional extra.This option could end up with you paying over the odds, you may save money by using an independent one. You are not obliged to use the banks payment gateway. However, if you decide to do this, you must check that the independent payment gateway is compatible with your Merchant Account.

Third Party Processing Service

Using Third Party Processing services such as Paypal, Nochex etc, could prove to be viable if your business is a new one, and you are not sure what your sales projection will be. Customers are directed to a secure server to make payment, so you do not need to worry about having a secure payment method. It is usually quicker and easier to set up an account with a Third Party Processor.

Most Third Party Processors charge a percentage of sales and sometimes a fee per transaction, but you only pay these when you sell an item. Some charge a modest set-up fee. With this option you could build up your sales record giving you a trading history, then if needs be you can apply for an Internet Merchant Bank account.
Most Third Party Processors accept international payments, which will widen your market.

Drawbacks

• When your business grows and you are making more revenue,your fees could end up costing you more in the long run
• The name of your Third Party Processor’s name will appear on your customer’s statements and not your business name
• It can take longer to release your funds to your account

As there are many Third Party Processors available and more are appearing, my favourite word “research” pops up again. Draw up a list to use for comparison, make a pros and cons list to help you decide which to use.
Give other payment options as well as online card transactions, there are always people who do not feel comfortable with giving their card details over the net.Offering telephone orders, paying by cheque, Bank transfer etc will widen your target market rather than alienating it.

Shopping Carts

A shopping cart is a piece of software that acts as your Website's catalogue and ordering procedure. The shopping cart will let your customers choose their product or products, put them into the shopping cart and on to the checkout to pay for the goods.

Shopping cart software can be implemented by purchasing and integrating the package into your website or by subscribing to a hosted shopping cart service.

*It is vital that you check that any particular shopping cart software that you are considering using will be compatible with your payment merchant and payment gateway. For beginners, the second option would probably be more feasible – unless you are a technical wizard of course!

Local hosting Pros

The advantage of integrating shopping cart software yourself is that you will have complete control over it and no monthly fees to worry about.

Local hosting Cons

Unless you are technically minded it may prove to be difficult to install, configure and maintain. You’ll need to have a secure connection such as SSL enabled on your website which normally attracts a monthly fee.

Remote Shopping Cart hosting Pros

Using a shopping cart hosting service will have the added benefits of many features. As your shopping cart will be hosted on the shopping cart provider’s server, it will not affect your bandwidth usage. This is especially useful if you are selling intangible goods (downloads).

A number of shopping cart hosting service providers include features such as: running affiliate programs and the capability to send sequential pre-defined messages to customers and leads. In addition, some also incorporate gateway services and an Internet merchant account.

Remote Shopping Cart hosting Cons

Maybe the use of the word “cons” may be a bit strong but, by using a shopping cart host you will pay a monthly fee. These fees will vary significantly and although I’m a great believer in the saying “you get what you pay for”, that’s not necessarily the case with these hosts.

Some of them charge exorbitant fees but offer no more features than some of the cheaper plans, so it’s worthwhile to invest some time researching and comparing the features, the benefits to you etc.

Shopping cart software is only really strictly necessary if you are offering multiple items. However, if you only offer one or two products with fixed prices and standard delivery charges, then third party payment processors will be a more viable option for you.

When you have multiple products for sale on your website, then integrating a shopping cart would give your website a more professional look and feel to it. Also the features that are included in the software would give the added benefit of product inventory structuring.

There are many shopping cart software packages and services on the market, but it is vital that you find one that completely suits your business. The wrong package or incompatibility of components could cause you a great deal of aggravation, costing you dearly as your business grows.