Accepting Credit Cards on Your Website

Are you thinking of selling things on the web? If so, you will probably also be considering some way in which you can accept credit cards on your site. Since new webmasters who visit earnmoney.pk often ask me about how they can get started accepting payments in this form, this article provides some basic information on adding credit card payment facilities to your website.

Why Do It?

Credit card payments allow you to take advantage of the following types of customers:

1. Impulse buyers. After reading your advertisements and hype on your site, buyers would be all fired up about your product. If they have a means of making a purchase immediately, you’ve secured that sale. If you only allow cheque payments, the additional time it takes for them to get their cheque book and mail out the cheque may be a deterrence. They may also have second thoughts later.
2. International customers. Credit card payment is a tremendous convenience if your customers are overseas. It automatically takes care of the problems of currency differences as well as the time it takes for a cheque to travel to the vendor. You will lose a large number of overseas customers if cheque payment is the only way you can accept payment.

Methods of Accepting Credit Card Payments

There are actually two ways in which you can accept credit cards on your site.

1. Using Your Own Merchant Account. To do this, you will need a bank that will allow you to open a merchant account. Requirements for this will vary from country to country, and you should check with your local banks for more information on this.
2. Through a Third Party Merchant. There are numerous companies around that are willing to accept credit cards payments on your behalf in exchange for various fees and percentages. These are also known as “payment gateways”.

Which Method Should You Use?

The initial costs of opening your own merchant account is usually higher than when you use a third party merchant. Indeed, some third party merchants have no setup fee at all.

However, the transaction fee (which is what you pay the bank or third party merchant for each sale) is much higher when you use a third party as compared to when using your own merchant account.

A third party merchant is usually convenient to use when you don’t know if you can actually make much out of your product or service. If you just want to test the water to see how things are, this is usually a good way to start. It is also convenient in that the merchant takes care of everything for you. You just get a cheque at the end of each payment period (if you have earned enough) and concentrate on your products, services and customers.

Having your own merchant account accords your business with a certain amount of professionalism. And, as mentioned earlier, your transaction costs are usually much lower. However you have to be careful to minimize your credit card risks since you’ll be processing the credit card payments yourself. This is not to say that there are no risks attendant in using a third party merchant.

Some Third Party Merchants / Payment Gateways

Here is a list of some third party merchants may want to consider if you are looking for ways to accept credit card payments. Except for PayPal, have not tried any of them myself (as supplier). Check them out carefully and use them at your own risk.

Note that the fees and stuff that I post below were correct at the time investigating these sellers. It is very likely to have changed in the time you read this because traders tend to change their rates from time to time according to market conditions. Make sure you check the current (up to date) the details of your site before making any decision.

The list is arranged alphabetically.

CCBill: There are no setup fees. Transaction fees vary (I can’t find the schedule though) depending on the volume of sales in each accounting period. According to their website, “these fees are never more than 13.5% of revenues charged during this one-week period for CWIE hosting clients and 14.5% for non-hosting clients”.

CCNow: This is only for people who ship tangible, physical products. There is no setup fee, and they charge 9% per transaction except in the November and December where the fees are 8% per transaction (yes, lower).

Google Checkout: Google has its own payment system that is available to U.S. Merchants and the United Kingdom. It is mainly for use if you are selling digital goods and materials, but also can be used to charge for services and subscriptions. The charges range from 1.9% + $ 0.30 USD 2.9% + $ 0.30 USD per transaction, depending on the volume of sales in the previous month. If the buyer is not in your country (ie not in the U.S. if you are in the U.S. or UK if you are in the UK), there is another processing fee 1%.

Kagi: Kagi’s fees seem to vary according to the order size, type of item sold and the type of payment (credit card, cash, money order) used by your customer.

PayPal: This well-known service allows you to set up a Premier or Business account (you are subject to certain limits when receiving credit card payments if you use a Personal account). The charges range between 1.9% + $0.30 USD to 2.9% + $0.30 USD for each transaction if you are in the US. Non-US users are charged different amounts according to the country. From experience, I find this service easy and fast to setup.

ProPay: A new competitor to PayPal (see elsewhere on this page) that currently only caters to US residents. Depending on the type of account you sign up for, you have to pay an annual fee (starting from $34.95) as well as transaction fees of 3.5% + $0.35 USD. However, to accept cards like American Express and Discover, you have to use their more expensive plans.

RegNow: Designed for software authors to sell their ware, this merchant charges a one-time activation fee of $19.95 USD plus a transaction fee of 6.9% plus $1 USD per unit for their commission (minimum $2 USD charge). They also provide you with facilities that allows you to easily set up an affiliate program.

How to Put an Order Form or Shopping Cart on Your Website

Once you have registered with the provider of your choice, you will be able to put an order form or shopping cart on your site. Each vendor has a different method for this, but most if not all, will provide prefabricated forms can be customized to your product or service.

(Note: if you use PayPal, and don’t know where to start, see my tutorial How to Put an Order Form or Buy Now Button on Your Website Using PayPal for a step-by-step guide.)

Trying It Out

Whichever you choose, if you are selling things on the Internet, you really have not much choice but to accept credit cards. You probably don’t know what you missed until you try it out.

All the best for your business!