The ability to accept major credit cards is a critical component of selling goods and services online. While there are many credit card processors that power e-commerce sales, the service models, security features and processing fees for each can vary significantly.
Despite knowing you need to accept credit cards, determining which card processor to partner with may take some time. E-commerce business owners can simplify the process of incorporating credit card payments into their business models by ensuring they’ve completed the steps most card processors require to apply for an account, and by understanding some of the basic fees, features and service models credit card processors tend to offer.
Here’s some practical steps to help you determine what your e-commerce business needs to accept credit cards.
What devices will customers use to make purchases?
You may consider yourself an e- commerce business, but because research indicates that nearly 60 percent of online traffic is executed on a mobile device, you may be more of an m-commerce merchant than you think. If you’ll sell directly from a website, ensure that the credit card processor you choose is as adept at presenting payment options on a desktop format as well as on mobile devices.
Where will you sell?
Your business model may be primarily driven by e-commerce transactions, but if you think there’s the possibility you’ll sell in additional channels — such as pop-up shops, festivals or trade shows — consider a credit card processor whose capabilities make it easy to process secure card transactions in a variety of venues, and on a range of devices. Some credit card processors, for example, empower merchants to use the same card processing account they rely on to accept credit card payments online on their mobile device. This capability transforms your smartphone into a roving, secure point-of-sale terminal for ultimate customer convenience.
What equipment do you intend to buy?
If you operate an e-commerce business, you may want to keep investments traditionally associated with a brick-and-mortar store to a minimum. Many credit card processors now empower small business owners to turn their e-commerce site into a secure payment processor, without requiring they purchase additional hardware or software. On those occasions where customers may want to place an order by phone or in person, some credit card processors may provide the equipment you need to process secure EMV payments on your mobile device, so you don’t have to invest in a point-of-sale terminal or receipt printer you’ll rarely use.
What fees or contracts are you prepared to pay?
The fees you’ll pay to process credit card payments vary by the provider you choose, and could vary based on the volume of transactions you process, and how you process them. Some credit card processors may charge a percentage-based fee on the transaction amount, while others may offer volume-based pricing options. Some credit card processors may charge more for “card not present” transactions because they can mean greater exposure to fraudulent transactions. No option is distinctly right or wrong, but it should support — not detract from — your business model and its credit card processing needs. Consider what fees could be associated with card transactions so you can price your goods accordingly to maintain profitability.
Do you have a formally structured business and a dedicated business bank account?
Credit card processors vary in the amount of time they require to transfer funds to merchants once a card purchase is made, but most require that your business have an established business bank account to accept direct electronic transfers. In addition, some credit card processors limit the types of businesses they’ll serve, for risk management reasons. A business may be considered high-risk for a number of reasons, including the types of products or goods sold, the client base, or the business’s financial history. Some credit card processors may even consider businesses that sell only online as high-risk merchants. Falling into this category doesn’t mean you cannot accept credit cards, but it may mean your needs will be best served by a credit card processor that is specifically focused on helping high-risk merchants.
Accepting credit cards is critical for e-commerce businesses. When you understand the different types of fees, service models, features and benefits various credit card processors offer before you have a customer ready to make a purchase, the better prepared you’ll be to efficiently establish a relationship with the card processor that best suits your needs.
Here is a checklist to make sure you have everything you need to accept credit cards.
Checklist created by BluePay.