Online business is the buzz at the moment. Everyone wants to take their business online and start making sales, yet there are a few things you need to know before you start selling online.
This is a 3 part series about selling products and services online.
This post I will focus on accepting payment via your website.
There are a couple of ways you can collect payments online, like anything they all have their pros and cons. Simply put, there are two primary methods – directing your users to a hosted payment solution such as Paypal or processing credit card payments directly on your website.
Hosted solutions
The simplest and lowest risk to accept payment is directing your customers to a third party payment processing system such as Paypal.
Advantages of hosted solutions
Specifically with Paypal the benefits are it is low risk, reliable, recoginsed, generally there are no monthly fees and integration to your website is cost effective.
No ongoing fees, you are charged per transaction only.
Disadvantages of hosted solutions
The disadvantages of using a system such as Paypal is your user is taken to a third party website which can break the flow of the user experience.
In addition, Paypal fees are higher per transaction, and if you are doing high volume of sales online it is something to consider.
Onsite credit card payments
Onsite credit card payments are where you enter your credit card details directly on the checkout page.
When you are taking credit card details directly on your website there are a few things you need to know, and this is really scratching the surface, so if this is a requirement for your business I suggest you talk to your web developer.
Advantages of onsite credit card payments
Lower per transaction fees and the user doesn’t leave your site so lower percentage of ‘cart’ abandonment.
disadvantages of onsite credit card payments
It’s higher risk, integration to your website is more expensive.
Increase in costs for hosting and ongoing monthly fees for merchant and gateway facilities.
What you need to know if you’re going DIY
Your website and hosting needs to meet a plethora of requirements outlined by the Security Standards Council before your bank will allow you to use their facilities.
If you are going the DIY route with your online store and you want to implement this functionality on your website, if you haven’t already, get your hands on a copy of the PCI Data Security Standard Compliance documentation with a very strong coffee and get reading. If that just made your head hurt, hire a professional. It’s not worth the risk.
3 things you need for onsite credit card payments
There are 3 things you will need to get started taking payments online:
- An online merchant account
- A payment gateway
- Reputable hosting with a Security Certificate Installed
Merchant Accounts
Merchant accounts are setup with your financial provider. You simply need to approach your business banker and ask if you already have an online merchant account and if not, can you set one up.
Payment Gateways
A payment gateway can be custom code that is developed to meet the PCI Compliance regulations. There are third party systems that can handle all of this for you so you just sign up and pay a monthly fee plus a small fee per transaction. Your bank may also offer a Merchant and gateway package in one. It is advised that you speak to your website developer prior to making any gateway commitments as they may have a preference.
Secure pages (SSL Certificate)
To transfer secure information you need to ensure the data is secure, this can be done with the installation of a Secure Sockets Layer (SSL) certificate is installed. Prices vary with this depending on the level of security you require, but to install your security certificate you also need a static IP which can increase the cost of your annual hosting.
Other payment options
There is a new player in the field who takes away the requirements for Merchant account and Payment gateway. It’s a mix between a gateway & Paypal.
Stripe, this still requires some custom development to get it working, will also require your secure pages and the fees are similar to Paypal.
If this post just made your head hurt get in touch. The next post in this series is all about how to manage your shipping and distribution (including Digital Assets).