Hello Pentium-ga:
It was a pleasure to answer your question. I know it sometimes get
difficult to understand how one can accept credit cards on their
website. When I was helping my cousin with his online business, we had
the similar question that you have. Of course, it is not difficult to
understand how can you do that but when you look at the literature on
the internet on this issue, it just gets a little puzzling. Not that
the guides are not easy to understand but the variety of information
that each one provides results in Information deluge.
Therefore, when I looked at your question, it reminded me of our time.
During my discussion, I will provide you important links that will not
only help you but also provide easy to understand information on
setting up a website to accept credit cards. Forget about the articles
on the internet and books; forget about any guides; forget about what
you have heard; LET ME try to explain myself in the most simplest of
words what will you need in setting up your website for credit card
transactions. Please, pardon me as I will assume that my reader is a
novice in this field and he doesn’t know anything at all.
Please relax and browse through the information as I have done the
hard work for you. Don’t worry about, how I will know who the best
supplier is and where to get this software. I have provided you a list
of suppliers in UK and every thing you will need, at the end.
A GUIDE TO MERCHANT ACCOUNT & CREDIT CARD PROCESSING
If you want to accept credit cards online, the first step is to have a
merchant account. A Merchant Account is an account set up between a
merchant, like yourself, and a bank which allows the retailer to
accept a credit card order from a customer.
There are three ways to set up a merchant account with a bank.
1. Set up a merchant account with a bank.
2. Ask an ISO (Independent service provider) to set you up with a bank
so that you may have a merchant account.
3. Get the credit card transactions done through a credit card
processing company.
Since, you have to select one of the above mentioned services, let me
explain in detail what are the benefits and advantages of each and
what precisely is needed to set up a merchant account with each and
start getting payments online.
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BANKS
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The best and the most secure method is to set up a merchant account
with a bank. Although, it is the most secure method but it is also a
little difficult for the new businesses. Why is it a little difficult?
It is so because whenever the brick and mortar stores do any
transaction, the person is present on the scene. If there is a
trickery involved, the person can be apprehended on the spot. On the
other hand, with online transactions, the person is not present.
Therefore, if the credit card transaction is fraudulent, it is very
difficult to apprehend the person. Since, the banks are responsible
for any paybacks on the fraudulent transaction; they are hesitant to
provide a merchant account to a new business.
So than how may you open a merchant account with a bank? Your best
chances are, if you already own a business for two or more years, on
average most banks will happily provide you with a merchant account.
Now, if it is the first time you are opening a business or you are new
in business field, your best bet is to ask (your) local bank if they
offer a merchant account. If you have a good history with (your) bank
and they offer a merchant account, you are set to go.
Suppose, a bank has now offered to provide you with a merchant
account, what is next?
What would you need in order to start getting online payments from
your customers?
You will need three things in order to start an online credit card
transaction from your website.
1. Shopping Cart
2. Gateway (A hardware)
3. Credit Card Clearing House
SHOPPING CART
You can get a variety of shopping carts from different suppliers. It
is software that you can install on your web browser. Most Internet
Service Providers or Internet Web Hosts provide you with a shopping
cart.
A shopping cart is just a tool for buyers to select products, its
nothing more.
It is software that allows you to present your products in a
meaningful manner. You can provide the pictures of your products and
give its prices to allow the customer to decide what they need. The
customer is also able to choose size and other contents. If you have
multiple products (different clothing’s, antiques etc), you will need
this. Almost all of the stores use it, nowadays. Click on the link to
see a couple of shopping carts: (You can customize shopping cart to
match your needs)
TYPE 1: For Councel Shopping Cart
http://www.forcounsel.com/shop/browse.cfm?d=d&catid=2
TYPE 2: Discovery Store Shopping Cart
http://shopping.discovery.com/stores/servlet/CategoryDisplay?catalogId=10000&storeId=10000&langId=-1&categoryId=25902&parent_category_rn=1107
GATEWAY
Now, you have the shopping cart but how will the customers be able to
do the transaction?
That is where a Gateway comes in. It is software that you install on
your web browser, just like the shopping cart software. It carries out
all the transaction process from getting information from credit cards
to mantaining vital sales statistics. It lets the seller (owner) see
his billing amounts, sales and other vital information.
IMPORTANT! Be aware that your shopping cart should be compatible with
the gateway and vice versa.
You can check this by reading the compatible gateways for the shopping
cart that you are buying. OR, if you buy the gateway first, make sure
it is compatible with the shopping cart that you will buy.
CREDIT CARD CLEARING HOUSE
Your bank will provide you with a list of its preferred credit card
clearing house. Credit card clearing house is the piece of software
that verifies that the credit card is good.
Actually, a Gateway asks a credit card clearing house for this
information before any final transaction is done. The credit card
clearing house is also the final piece in puzzle, it takes the money
from the customers account and sends it to your banking account.
In conclusion, the process goes something like this:
Shopping cart-----> Gateway ------>Credit card clearing
house----->Money to your bank.
Banks charge a small fee for all this transaction. It is known as
“Discount Rate”. Rates depend upon your annual sales volume and your
average transaction amount. The higher these are, the lower the rate.
For example, with an annual sales volume over $30,000, a bank may
charge 2.78% for average product sold in the range of $40 to $50 taken
over the Internet.
It is the Banks that are the cheapest for online transactions but
there is a slight problem with banks.
Every bank will accept Visa and MasterCard but in order to accept
American Express, Discover and Diner you will have to get the
acceptance of these card companies, directly.
You may do it by going to their online websites and providing them
your merchant account number and the name of your bank. Most probably,
they will allow you even if you are new to business (Since, your
merchant account is a sign of good relationship with your bank). But
again, they might reject.
Once you get the permission, you can accept American Express, Discover
and Diner through your website.
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ISO (INDEPENDENT SERVICE PROVIDERS)
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In case you are rejected by the Banks, the advice is ‘DON’T WORRY!’
Only remember how the three things that I mentioned above, work.
(shopping cart, gateway, clearing house)
Independent service providers are the companies that act as an
intermediary between an owner and the banks. The foremost advantage to
an Independent service provider is that most of them will not only
accept your application for a merchant account but also will also let
you accept all kinds of credit cards.
A big advantage to these ISO is that some of them will provide you
with a gateway and shopping cart that will be compatible with each
other. Also, some of them will provide you a list of their preferred
credit card clearing house so you don’t have to shop around.
The disadvantage to these ISO’s is that they charge you a higher fee
because they have to take their fees for acting as an intermediary.
IMPORTANT! Nowadays, there are hundreds and hundreds of Independent
service providers, most of them charge you an exuberant fee but don’t
tell you that there credit card clearing house are very cheap
companies. They also won’t tell you that there shopping carts and
gateways are not very safe. Therefore, if somebody does a fraudulent
transaction, they might charge you back, hundreds.
I will let you know which the most reputable ISO’s in business are.
Even, if they charge you a little extra, it is worth it.
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CREDIT CARD PROCESSING COMPANY
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If your sales volume is low, than this is the most hassle free method
to do an online transaction. You don’t have to remember those three
things. You don’t have to worry about getting permission for a
merchant account, gateways, credit card clearing house, shopping cart
or anything else for that matter. Just, open up a business account
with them and you are ready to go. Even, opening up a business account
is 1-2-3.
The only disadvantage is that they charge you even higher than ISO’s.
I will provide you a list of best credit card processing companies.
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LIST OF ISO, CREDIT CARD PROCESSING COMPANIES-----GATEWAY & CREDIT
CARD CLEARINGHOUSE
________________________________________________________________
Please note that all of the companies listed here are of the highest
quality. You may find a single company listed in more than one list;
that is because most of these companies are huge and may act as an ISO
and clearinghouse at the same time. You may find several ISO offering
more than one service. A simple rule of thumb is that if a reputable
ISO is providing other services, the service will most probably be as
authentic as the reputation of the ISO.
Before going through the list, you may want to check the definitions
of the following one more time:
ISO (Independent service providers)
Credit card processing companies
Gateway
Credit card clearing house
Following is the list of some of the most reputable ISO’s and their
web address.
(UK)
World Pay
http://www.worldpay.co.uk/
SEC Pay
http://www.secpay.com
Secure Trading
http://www.securetrading.com
Data Cash
http://www.datacash.com/
(USA)
Global Payments
http://www.globalpaymentsinc.com/
CyberCash (Acquired by VeriSign)
http://www.cybercash.com/
Electronic Exchange Systems
http://www.exsprocessing.com/
E-Processing Network
http://www.eprocessingnetwork.com/
PayMate
http://www.paymate.com.au/
The First American Payment Systems
http://www.first-american.net/
Total Merchant Services
http://www.totalmerchantservices.com/
Following is a list of credit card processing companies:
Most of them have worldwide presence.
http://www.merchantseek.com/3rdparty.htm
Pay Pal, I-Bill and CCBill are well known.
Following is the list of top Gateways
The two most reputable gateways in America are Authorize.net
http://www.authorizenet.com/ and CyberCash (Acquired by VeriSign)
http://www.cybercash.com/
The famous ones in UK are:
DataCash, DataCash Ltd., United Kingdom
http://www.datacash.com/
ePDQ, Barclaycard Merchant Services, United Kingdom
http://www.barclaycard.co.uk
NetBanx, NetBanx Ltd., United Kingdom
http://www.netinvest.co.uk
SecureTrading, SecureTrading, United Kingdom
http://www.securetrading.com
WorldPay, WorldPay plc, United Kingdom
http://www.worldpay.co.uk/
Following is the list of Major Credit Card clearing houses in UK:
OR go to Association for Payment Clearing Services
http://www.apacs.org.uk
Barclaycard
http://www.barclaycard.co.uk
Bank of Scotland
http://www.bankofscotland.co.uk/
Lloyd’s TSB
http://www.lloydstsb.co.uk/
Royal Bank of Scotland
http://www.royalbankscot.co.uk/
Nationwide
http://www.nationwide.co.uk
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MERCHANT ACCOUNT EXPLAINED 'SHORT GUIDES'
__________________________________________________________________
Merchant Account & Credit Card Processing Guide
http://www.merchantinfoweb.com/merchant-accounts.htm
Future Quest Inc. Article
http://www.aota.net/E-Commerce/merchanttypes.php4
Store Sense E-Business Solutions
http://storesense.transactive.ca/Page.bok?file=ss-mercacct.html
WORKZ.COM
http://www.workz.com/cgi-bin/gt/tpl_page.html,template=3&content=1552&nav1=1&
E-XACT Guide
http://www.e-xact.com/solutions/merchantAcct.asp
Web Developers Virtual Library
http://www.wdvl.com/Internet/Commerce/MerchantAccounts/index.html
Wilson Guide
http://www.wilsonweb.com/articles/merch-cc.htm
USEFUL KEYWORDS
‘merchant account providers’
‘merchant accounts’
‘set a merchant account’
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I hope this helps. If not, I am always available for further
assistance. Thank you for using Google Answers and I wish you a very
good luck with your business.
Sincerely,
Leader-ga. |
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