Getting your e-tail website on the Internet is a big step to becoming an on line merchant. But, if you’re a first time merchant, how do you get merchant status so you can accept credit card payments? The first place to start your search for merchant status is your own bank. Most banks issue credit cards, and if you have a long-term relationship, you may be able to arrange for a credit card in your business name.
If that fails, try other banks in your community to see if you can be eligible for a merchant account (you may be required to move your other banking to that institution as part of the deal). Purchasing a webhosting account from web host companies like Sirius International, which specializes in e-tail and e-commerce accounts may automatically make you eligible for merchant status. If this still doesn’t pan out for you can do a search on the Internet for “credit card processing.” A search on Google returned nearly 4,000,000 sites referring to the topic, including companies, large and small, that are on the prowl for start-ups seeking merchant accounts.
Shop around for your best deal, but also be aware of hidden costs in many of these merchant accounts. Credit card processing from any source isn’t cheap, however, at least not for a start-up. A typical fee schedule for a small-volume account (fewer than 1,000 transactions monthly) would include start-up fees amounting from two hundred to five hundred dollars and monthly processing fees of around $20-35.
What about security? Where do you get it? How can you assure security to your clients? These are all very good questions, and contrary to reports of rising fraud rates, online credit card payments remain one of the safest payment methods available. Secure Sockets Layer (SSL) technology allows credit card processing in real time, encrypting all confidential information during the transmission and authorization of transactions.
Another fraud-prevention tool called the Address Verification Service (AVS), makes online credit card acceptance even safer. This service compares the numerical information in your customers’ addresses to records stored by card-issuing banks. You can also elect to protect yourself further by using the card validation code systems of MasterCard and Visa. These verification services use the three-digit codes printed on the user’s card to help you determine whether your customer possesses a legitimate card.
The one “absolutely must-have” for online credit card processing is a secure, encrypted connection for your transactions. This is what you experience when you go to virtually any major e-tailer and initiate a purchase. As soon as you click on the “purchase” button you are taken to a “secure server” environment, where transaction data is scrambled to provide a measure of safety against hackers. Whatever vendor sells you credit card processing should also, as part of the package, provide a secure transaction environment. If they don’t offer it, look elsewhere.
Be sure to ask prospective credit card processors about the costs of storefront solutions that you must have to effectively operate your website. You may need shopping carts, payment gateways, virtual terminals, virtual checks, databases for order fulfillment, customer tracking, tax calculation and shipping charge tables. Some of these services may be provided by your web host, in which case you won’t need them from your credit card processor, but knowing what the processor can provide, and at what cost, can aid you in selecting the web host that is right for you.
For comparison purposes, check out the services provided by web hosting company Sirius International , as its e-Commerce Accounts provide the most services and the largest capacity. This Hostware™ account is for the business that wants to maximize its abilities on the Web.
There is a $100 Sign-up fee for this 350 MB e-commerce account that also includes 200 e-mail addresses, at a monthly fee of only $49.95 a month. This account type was specifically developed for businesses that plan on selling products online, and allows you to construct the site yourself, using their online toolset including catalog and shopping cart programs.
You can securely take orders online using a shopping cart or an order form. Orders can be processed manually with your own equipment or you can choose to have the funds automatically processed in real time. To compete in the Internet and mobile commerce world, businesses need to process transactions quickly and securely. The Sirius International e-Commerce account provides a gateway to Authorize.Net’sglobal payment solutions to ensure both speed and security, offering:
1. Unlimited transactions from nearly anywhere in the world.
2. Scalability to grow with your business.
3. Unrestricted number of users with one account.
4. Experienced technical support.
Shop around for the credit card processor that best suits your needs. Talk to several different processors and don’t be afraid to ask questions. Find out about their:
· Transaction fee: A flat rate charged for each transaction processed.
· The discount rate: An additional percentage of each transaction paid to the merchant account provider if your monthly charges are less than a certain volume.
· Monthly minimum fees: Minimum fees collected each month if your discount rate and transaction fees don’t add up to the monthly minimum specified on the original merchant application. It is usually about $25 per month.
· Equipment: Virtual terminals, point-of-sale terminals, printers and peripherals. Also find out about any installation costs.
· Reserve fees: You may be required by some providers to set up a reserve account, which protects the processor from any future losses. The reserve account is calculated as a percentage of your sales.
· Chargeback fees: These are the costs charged by a processor to cover disputed charges.
Also be aware that some merchant account providers lump e-businesses in with other high-risk businesses, like telemarketers, travel and cruise industries and Internet auctions. This can mean that it may be more challenging to get a merchant account established. Merchant account providers, just like banks, will also consider how long you’ve been in business, your credit history and any previous merchant accounts you’ve held with other processors.
Your business experience is important because merchant account providers want assurance that you understand the business environment in which you are going to operate, can identify the potential risks of business, know how to reduce fraud, and understand how to manage credit card acceptance. Risk aside, this kind of knowledge comes only with first-hand business experience.
To increase your merchant account eligibility, prepare a thorough Business Plan, Marketing Plan and Operating Plan that identify and address all these risks, clearly defines the procedures to handle each situation, and the protections you have, or will, put in place to ensure success.
