Payment Processing Services and Terms

Most successfully businesses use one or more 3rd party payment processing services to process their credit card orders on Internet, since this doesn’t require to obtain a direct merchant account or to setup expensive ssl certificates. The 3rd party payment processing services handles payment by credit card (and usually can handle checks and other forms of payment as well), and sends the seller a monthly (typically) check or wire transfer, minus various processing fees, which vary from service to service.

These 3rd party payment processing solutions give the seller a link to a secure webpage where they can redirect their customers to, for completing the order. While the method has many benefits, it also has disadvantages.

Below I would like to make an introduction of the basic terms and concepts used by the standard payment processing services, to help sellers understand better what they need to compare when choosing an payment processing service.

Payment Cycle
- the time interval during which orders are taken for one payment. Can be monthly, bimonthly, weekly, etc. After each payment cycle ends, the payment should be sent to the seller.

Payment Hodling Time
- unfortunattely every payment processing service deliberately holds the payment for an amount of time that varies between a few days up to several months. They do not send the payment immediately after the payment cycle has ended, but instead they hold the payment for the specified payment holding time. They say this is to protect them against fraud, chargebacks, and it also helps them with increasing their profit ( by holding the money in bank for an interest ). For example, for a monthly payment cycle and a payment holding time of 15 days, the money resulting from orders during October will be sent to you on or after 15th November. This is not a big issue if the payment holding time is not long, but some services have a payment holding time of 2 months or more, and you will receive your payment for October sales in January the next year.

Payment Processing Day
- is the date of the month ( for montly payment cycles ) when the payment cycle should end, and the payment calculated. Usually this is the last day of the month, but some services let you specifically set it.

Signup Fee
- the fee for signup. Some charge non-refundable fees, other application fees, other do not charge a fee at all.

Transaction Fee
- the per transaction fee, usually a percentage with a minimum fixed value.

Chargeback Fee
- when a chargeback occurs ( it happens in case of fraudulent orders or when the customer is not satisfied with the product ) not only that the payment processing service takes back the amount of the order, but it also charges you with a chargeback fee.

Some payment processing services have additional fees, such as product download fee ( for virtual goods ), monthly fee, statement fee, refund fee, wire transfer fee, contract canceling fee.

It is a good practice to read the TOS ( terms of services ) and the contract before signing up, as many payment processing services state they reserve the right to terminate or suspend their services to any customer, for any and no reason at all, without notice, and they also state that the last payment will be held 6 months, for chargeback protection.

Importance of Merchant Account as Your Online Payment Solution

The emergence of internet has changed all the existing dimensions of business and commerce and set a whole new arena which is now considered as the largest marketplace. Research shows that millions of new people are joining this highly potential market for ripping its lucrative benefits with a online payment solution. Starting an online business means you want to sell online any products or services. To run an online business smoothly you must also have knowledge about online payment procedures for which you would require a merchant account.

The rapid advancement of technology in the last decade has gone so far that online payment solution has turned to be as easy as sending a text message or SMS. Now, a business merchant account allows one to enjoy the most hassle-free online payment. You can also offer your customers various other additional benefits like secured payment methods, fraud protection, major credit card acceptance, multi-currency options, real time payment proceedings and much more. Sell online your products and receive prompt payment which in turn will boost your business growth rate.

A merchant account makes it possible to advertise your business, sell online and even collect the payments online without ever having to meet the customer personally. Statistics show that nowadays, more than 65% of business transactions are made online. Whenever your client makes an online payment it will directly reflect in your bank account and if any issues occur you will be able to solve it quick.

Moreover, some merchant account providing companies offer the service of online mobile payment using your very own mobile handset. Market experts are eying this new procedure as a potential payment procedure which may rule the business world soon with online payment solutions. The day is not far away when people will sell online as well as will keep the payment and transaction tracks all via mobile. What all you need to do is, set up your merchant account and give your customers enjoy the several key benefits of online payment.

Not only big enterprises are being benefited from merchant account services, it also supports the small businesses to grow faster. Most small e-shops who sell online various products rip the benefits of having a merchant account. The medieval imprinters have gone obsolete with the emergence of these accounts as they are fully able to keep a record of the credit card data of customers and monitor the whole online payment procedure. The next boon of this new advanced account is electronic authorization i.e. it ensures prompt approval of the payment from the clerk or any clerical members. Otherwise, this approval procedure gallops huge time and make a business deal lengthier.

Another key benefit of merchant account with a Online Payment Solution is that it can be handled from anywhere which means this is a wireless payment procedure. With such a handy account, checking any online payment and progressing with your business will not be a tough task at all. So, now you can sell online anything and everything from anywhere in this world. The place will not be a matter.

The Facts About Internet Merchant Accounts

If you own and operate an online business, then you realize that without giving your customers the ability to pay for your merchandise with their credit cards you are not likely to make much money. Online shopping practically depends on credit card transactions. Online shopping has never been more prevalent than it is right now, and the vast majority of online customers prefer to pay for their goods with their credit cards. That is why you need to consider opening an Internet merchant account. By doing so, you will be able to provide a quick and convenient payment method for your customers, as well as provide your business the opportunity to expand tremendously.

An Internet merchant account is set up an online merchant account provider for an online business in order to accept credit cards as payment from customers. The account provider works to authorize credit card purchases and makes sure that the funds are deposited into your business bank account. Traditionally, merchant accounts were not offered by banks to online business owners. But, with the increase in online shopping in recent years, there are a number of Internet merchant account providers turning up that offer services specifically to those business owners that market their products online. Banks still typically do not offer online merchant accounts, out of fear of credit card fraud. When you decide to search for an Internet merchant account, since there are so many providers out there, it is important that you research all of the factors involved with Internet merchant accounts, particularly the fees and services, so that your profits stay with you and your business continues to grow.

There are many potential costs associated with opening and keeping a merchant account. Not all Internet merchant account providers will charge these fees. These fees include the application fee, which is incurred by the provider to cover application processing costs, no matter if you open a merchant account or not. Some Internet merchant account providers will waive the fee if you do open an account with them. And some merchant account providers don’t even charge this fee. Often, an annual fee is charged on an Internet merchant account as well. Providers charge this fee for no other reason than for having an open account with them. There is the statement fee, a monthly charge that can be as much as per month, which is imposed to cover the account provider’s own costs. Another type of fee, the discount rate, is deducted from each and every one of your sales, usually between 2 and 4 percent. The fixed transaction fee, like the discount fee, is based on each sale, but is a static amount regardless of the cost of the merchandise bought, usually.20-.60. There are also various miscellaneous fees that are levied on your account, including a termination fee, which is charged if you cancel your account before the contract is up. Further, there are even charges that are withdrawn if a customer requests a refund, with the purchase amount credited back to their credit card.

Obviously, there are many potential hefty costs associated with an Internet merchant account, and it can take your profits away from you. It is important that you assess different the Internet merchant account providers and the fees that they will charge so that you don’t lose money unnecessarily. One way to do this is by using your current sales data to estimate the costs of your Internet merchant account.

With an Internet merchant account, payment processing usually comes in the form of real-time processing. Real-time processing is ideal for online merchants because the credit card is directly processed at the time an order is placed. The customer quickly receives an email notification that the order is accepted and the fund transfer is approved, once verification and approval of the credit card is received. There is usually a slight delay of a few days before the funds will be deposited into your bank account.

Ideally, you will want to have a sustaining business relationship with your Internet merchant account provider. There should be no doubt in the trust or confidence you have in your provider. In addition to speedy processing of your credit card sales, your Internet merchant account provider should offer other services that will allow all of your business transactions to run smoothly. They should accommodate several brands of credit cards (Visa, Mastercard, Discover, American Express, etc.), as well as providing additional payment alternatives, like PayPal. They should have a clean record of good service and consistency. And they should be superlative in providing you customer service. All issues or problems should be handled tactfully and quickly. Because of the apparent necessity of having an Internet merchant account, the provider you choose can make or break your business with fees and service. It is critical to know the facts about Internet merchant accounts and their providers so that your business continues to thrive.

Welcome Credit Cards To Your Business

Would it be okay for your business to go as far as accepting credit cards when making deals with your clients? Well, a lot of micro-businesses may not agree to do so because of the common fear: expenditures incurred outweigh the income gained. But in contrary to this common thought, tallying the expenses that you incur along the process would make you realize that they are less compared to the proceeds that they may bring into your company. First, the process in applying for a credit card is relatively trouble-free. Moreover, financial institutions know the needs of micro-entrepreneurs, thus helping them along the process. Plus, a number of other premiums leave you not wanting some more. In essence, there is totally nothing about credit cards’ participation in your business that your should worry about.

Welcoming the credit card-trend into your business takes few effortless points. The initial step is to create a credit card account intended for businesses. To do this, ask the help of the internet in looking for banks and other similar trends that can facilitate you in the process of the creation of your processing account. When this step is done, all you have to do is to choose what equipment you should use for your business. Since your are just beginning, it is best for you to make use of simple systems first, then invest on better and more modernized ones as your business grows. But when doing this, keep the points presented in this article to keep you guided.

In beginning to involve credit cards into your business, you have to look for the right financial institution such as a bank that could help you in the initiation of the business-type service account. The institutions that you will seek help from will determine and tally the expenditures that have to be taken as soon as the credit card system is installed. A number of these types of firms will allow you to process your application through the internet. As soon as the application has been completed, you will be notified within a day or two. An array of options is provided to you among which you will choose have to choose from. Of course, your choice should depend upon the line and type of merchandise that you run. For example, if your business is based at home or on site, then a built-in system, the ordinary one is the most practical choice. Meanwhile, if your business calls for you to walk from one area to another to offer your products to different customers, the choice is a wireless system that can travel with you. As the size and needs of your firm run further, you may need to have more sophisticated technologies such as pagers, e-check- online processors and other stuff to facilitate your business transactions.

Not only can credit cards benefit you in ways enumerated earlier, it can also be a very effective marketing strategy. When you have company website that will show information about your company such as the products, services, prices, facts, questions, answers and other details that relate to your company, more people will be attracted to your products, thus increasing your sales. This happens upon making your products popular across people by providing them with a more practical and easy way to shop—with your online credit card system.

If your wish is for your company to meet modern standards while gaining more, subscribe now to a merchant services account!

How To Make Your Online Credit Card Transaction Secure

Considering the peaks and valleys that even a robust economy can endure, along with the human beings that must ride the waves, it is no small wonder that concerned citizens everywhere wonder how to make your online credit card transaction secure. Especially in light of the ongoing climb of credit card debt, especially in America, this issue seems to only be increasing in relevancy and significance.

The blunt truth is that the best, yet simplest action you can take in order to discern how to make your online credit card transaction secure is to just make sure that you are using your head when you use your wallet. As most machinery-related injuries are due to user error, so too are financial pitfalls due to fiscal irresponsibility. Some foundational guidelines should be followed for best results.

Host Security

In order to be confident in how to make your online credit card transaction secure, you must first check the security of the website you are using to make such transactions. The easiest way is to look at the first characters of the URL; if the site begins with “http:”, then it is no more secure than any other ordinary web destination. But if the URL begins with “https”, then the “s” stands for secure, and it has security in place that is up to par with the standards of financial, academic, and government sites. This is also a convenient indicator as to whether an online financial operation is legitimate or a cheap poser seeking to scam you out of your money. You will also notice that whenever you use your credit card on sites like eBay, the URL will actually change to a “htpps” address during sensitive portions of its use.

Common Sense

Using a bank’s website, or that of another financial institution, should be dealt with in the same secure manner as that of any other website you would become a member of and establish a log-in for. You should use a strong password, never share the account, never remain logged in on a public-use computer unit, and generally follow the same working strictures you would elsewhere on the web. Sometimes figuring out how to make your online credit card transaction secure is no more complicated than the rules you would follow on any other website. If it sounds too good to be true, then it probably is, and that shady-looking link you were emailed about can be safely avoided altogether.

Institutional Trust

Once you grow comfortable and accustomed to using your credit card for shopping online, or other activities, it would be wise to develop a broad repertoire of sites you know can be trusted. Then, feel free to continue frequenting those pages and using their services. If, by experience, you know that they are a legitimate, secure site, then it would be smarter to keep using them, rather than keep trying ever new shop you come across until the unfortunate day you make the mistake of providing your credit card information to someone who will use it for illicit means. This is why one facet of how to make your online credit card transaction secure is to remember the value of loyalty, and how it still applies in the business world.

Ultimately, learning how to make your online credit card transaction secure may seem like a redundant, overvalued thought process. If you were to ask any of the thousands of victims of credit card fraud per year, though, they may choose to remind you that even the current simplicity of shopping and banking online still has room for improvement.

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Do I really need to accept credit cards?

YES, in today’s market I do not know too many successful businesses that do not accept credit cards. There have been numerous studies showing if a merchant accepts credit cards as a form of payment that the merchant can increase sales dramatically. Depending on the type of business, increases in sales can be anywhere from 15% to 100%.

Internet businesses have the largest increase because customers want to pay immediately and not have to call or wait for the merchant to contact them.

Some obvious reasons to accept credit cards are merchants will move more expensive merchandise, have an increase in impulse buying, and give your business credibility. Giving customers the ability to pay with a credit card allows impulse buying that will allow a merchant to move merchandise that a customer’s may not have funds available in their checking account. If you want to give your business every chance to be a great success, you must take credit cards. Here are some more good reasons to take credit cards:

COMPETITIVE WEAPON – Customers will buy from a merchant that offers payment by a credit card and will often look to see if a merchant accepts credit cards before shopping.

COMPETE WITH THE BIG GUYS – Accepting credit cards levels the playing field with larger retailers.

PEACE OF MIND – Customers feel secure in using their credit card. If the service or product is faulty, the use of credit card allows customers to dispute a charge that protects them.

CONVENIENCE – Making it easy for your customer to pay you is probably the biggest reason to accept credit cards.

CUSTOMER LOYALTY – Customers will often shop at merchants where they feel comfortable or have shopped before. One important thing to remember is to make sure to add credit card logos to any marketing you do. Many potential customers looking for a service or product will look at a merchant’s advertisement to identify and find the right merchant. If the customer has little cash often the deciding factor in determining which merchant to choose depends if the merchant accept credit cards. This allows the customer to finance the sale and make payments to their credit card company.

How do I get the money from a credit card sale?

Another good question and here is how it works. When you, the merchant, want to accept a credit card for payment, the following process occurs (this is a brief summary):

You submit a Transaction to your processor using your electronic terminal or Online Processing Software. Either option works almost the same way. The terminal or Online Processing Software communicates with the Visa/MasterCard Authorization to ensure that the Credit Card is valid and that the transaction amount does not exceed the cardholder’s credit limit. The authorization puts a “hold” for the transaction amount on the cardholder’s credit limit. That way, the funds are available to you when you complete the transaction. To complete the transaction you will simply close your batch at the end of the day with your terminal. By doing this, you are promising the merchant account provider, sponsoring bank, and issuing bank that you are prepared to deliver the goods and services expected by the cardholder.

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How to Sell Software Online and Accept Credit Cards 3rd Party Payment Processor Solution

3rd Party Payment Processor

So you are a software developer – created your own peace of software masterwork and now would like to show it to the world and make some money online selling it! That’s great… But the biggest hurdle you can face online today is that ‘starting point’ – how to start selling online and accept credit cards for your software products when you don’t have any selling history, just starting out and nobody gives you payment processing services.

This problem is the same problem like starting your own business from scratch – no capital, no gains, no possibility to start. In order to sell your software product online, you need to have a special online merchant account to accept direct credit card payments from your customers. However, applying for a merchant account on the bank is a real headache, because:

1)   You’re just starting – you have a great software product that you would like to sell online, however your business is new, so you have no business history. All banks will say – sorry, the doors are closed for you.

2)   Processing history: when you want to sell your software online, all banks ask you for a credit card processing history. You need to show the payment processing volumes that you make per month.

3)   Refund and chargeback rates should be low: all acquiring banks need to evaluate your processing risks and they need to see your chargeback levels (that they don’t exceed 0.5-2% of all sales) and evaluate your refund rates. Again, what would you show them when you are not processing payments at all.

4)   Digital business risks: you have a great product and you are sure that it will sell online greatly, however all banks view your software selling business as a ‘very high risks’. You are exposed to many customers returning the product and asking for a refund. They don’t know how you manage your customers’ complaints and if you really return the funds for unsatisfied ones. Selling software products is viewed as a high risk online business by most banks. This doesn’t help you start processing online.

5)   Show your business license: some banks might even ask you to show your business licenses and software registration documents, patents or etc. They usually require your financial documents of the company – profit and loss documents, shareholder information and business activity records. This doesn’t help you when you are a single developer or a small company looking to start selling online your newly developed software program.

6)   Website could be checked within 24 hours and be required to provide company documents, licenses, registration certificates, your personal details. Documents are gone over  thoroughly, credit rating checked. This approval process usually takes from 24 hours up to 2 weeks.

7)   Integrate your website directly to the bank’s raw payment gateways to accept your orders.

3rd Party Payment Processor

Getting a merchant account to accept credit cards online for your software product is a real time consuming and daunting task… However, the good news is that there is a simple solution for this problem. Instead of trying to get a merchant account, just signup on a 3rd party payment processor. They sell your software online. You won’t need to open a merchant account, nor hire developers to integrate your website into the banks payment gateways.

Sometimes when you face a hurdle, you think that it’s over…  Never give up, because there is always a solution waiting for you to sell software online and accept credit cards.