What do I need to accept credit cards on my website?
According to an article in Entrepreneur magazine, up to 90 percent of online purchases are made via credit card; furthermore, sites that don't accept credit cards will only convert, at most, 15 percent of their sales. Accepting credit cards on your website is a relatively stress-free process that takes only one business week to set-up but can reap positive rewards for your business.
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Requirements
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You will need a credit card merchant account from a bank. Credit card merchant accounts allow money to be debited electronically from a customer's credit card account and deposited in your bank account. In many cases, a merchant account is provided automatically as part of a business banking package. You also need a shopping cart system on your website or, at a minimum, an order form where customers can input the items they wish to buy. There are many commercial and open source shopping cart systems available. Popular options include: Magento, Zen Cart, CubeCart and Avactis.
Set-up
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First, contact your bank or payment gateway to ensure that your account is active. You cannot proceed until your account is open and ready to accept payments. Then, enter your login details and transaction key through your site's content management system (CMS). Most shopping cart systems also offer the option to send a test payment from your account to ensure that it is working correctly.
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Security
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A Secure Sockets Layer (SSL) certificate is recommended for online stores. The SSL certificate encrypts information and verifies the destination server (your merchant account) before sending data. Although not legally required, an SSL certificate is indispensable when running an online store. Without one, customers' sensitive information, including full credit card numbers, are written in plain text and can be intercepted during transmission or read from the server once the sale is complete.
Alternatives
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Payment gateways provide an alternative to setting up a credit card merchant account. When you use a payment gateway, the credit card is processed by a third party, who then receives a processing fee (usually a flat fee plus a percentage of the sale). Payments, minus the fees, are deposited in your gateway account and you can then make a withdrawal to your bank account. Popular payment gateways include Google Checkout, Authorize.net and Paypal.
Warning
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Credit card fraud is, unfortunately, a fact of doing business online. Fraud caused $4 billion worth of damages in 2008, and it's important to note that your business---not your bank or the credit card company---is responsible for reimbursing fraudulent transactions. To decrease the risk of fraud on your website, work with your bank to collect as much information as possible about your customers. Make sure that your order form captures important data such as the three-digit CVV number, billing address and expiration date.
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References
- Verisign: Secure Sockets Layer (SSL): How It Works
- Entrepreneur magazine: e-Boost Sales With Numerous Payment Options
- Internet Retailer: E-payment fraud will hit $4 billion in 2008, or 1.4% of sales, study says
- Site Wizard: Accepting Credit Cards on Your Website
- Acme Internet Technical Support: E-Commerce FAQ
- Photo Credit Credit card globe image by patrimonio designs from Fotolia.com
