Increase Sales with Payment Processing
For most businesses venturing into processing, e-payment means accepting credit cards. This involves setting up a complex system including a SECURE order page/shopping cart software, a merchant account (basically a bank account that receives the credit card proceeds), and a credit card processing service. Care has to be taken to ensure that the shopping cart is compatible with the authorization service. All the various elements need to be compatible and interface with each other.
While the bulk of credit card processing is transacted using debit cards, there has been steady inroads being made by alternative methods of settling payments. These Internet Payment Services have ingeniously utilized the most popular application on the internet “e-mail”, to appeal to customers.
As mentioned above the setup of a credit card merchant system is complex. The setup of a merchant account may take up to two weeks or more for final approval to be granted from the financial institition involved and verification of the integration of various components completed.
Establishing your own merchant account for credit card processing and installing a shopping cart can easily run into hundreds of dollars. In addition there are the ubiquitous monthly minimum fees and address verification fees (a proven anti-fraud strategy).
WPS providers don’t levy application setup or monthly charges, and the costs are competitive with Credit Card transaction processing charges. These average at $0.35 and 2.5% per transaction.
Although payment processing providers very user- friendly, the fact of the matter is that payment services are not as easy to use as credit card systems. Payment services require the user/ customer to register with them, if they have not already done so. Now this is a major disadvantage as it interrupts the flow of “impulse” purchases. Potential customers have been known to abandon shopping carts for even less interuptive purchasing hiccups.
On the merchant side, payments received in WPS accounts are not automatically lodged to your bank account. The merchant will have to manually claim and then transfer payments into their bank account. With credit card merchant accounts your account is automatically updated.
Having your own merchant account will certainly increase the flow of funds to your bank book. While a merchant account provider will hold your funds to prevent charge backs losses, the period of time is usually relatively brief, about 48 hours. Expect to wait for at least a week before money appears in the account of WPS providers.
At this point in time credit cards are the medium of choice and a business that uses only WPS providers as the means of receiving payments may appear to be amateurish and “small-fry”. In the online world, where site visors don’t have a face to relate to, perception is critical, and the ability to accept credit cards has been held as a mark of an established, feet on the ground firm.
Mike Knutterson is the author of this article credit card processing. He’s the President of the credit card processing company Electronic Transfer. For more information about the credit card logos and Smartphone credit card terminals visit his site or call 1-800-757-5453.
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