So, how does it work? First, you'll need to have a merchant account called internet merchant account.
To begin accepting credit card on your website, there are few issues to be considered first:
1. Security Issues
How secure is your order form? Many people remain reluctant to give their credit card details to someone that they deem unreliable. To eliminate their guards, you need to have your order form placed in a secure server with certification.
When your customer enters his credit card particulars, it is sent in plain, unencrypted text form to the host server. And it is possible to intercept this data by unscrupulous hackers. So, you must use SSL encryption to ensure no unauthorized individual can decode the information. Once your customers know their credit card information is secure, they will be more willing to give their credit card details.
2. Real Time vs Delayed
With real time payment processing, you will be able to process your customer's credit card information within seconds. Surely you don't want a credit card payment processor that takes 24 hours to verify the card is valid. Customers are expecting an instant verification so that they can download the info or product immediately.
With delayed payment processing the data does not go through the gateway. Therefore, you can inspect all orders and correct them. This would be fine if you have only few orders per day. What happen when you have hundreds or even thousands of orders per day? It is certainly very time-consuming and ineffective. So, my advice is to use a real time credit card processor.
3. Refund Policy
How are you going to handle the refunding if customers are not happy with your products and request a refund from you? Generally, you will get some refund requests form your customers. You cannot please everyone. You will still receive refund request no matter how good your products are. Therefore, you'll need to have a refund plan. You must decide how are you going to return the money to your dissatisfied customers. Are you going to do all by yourself or hire a full time employee to handle the refunding or leave it to a company that will handle all the hurdles and hassles of returning money to your dissatisfied customers?
4. Applying a merchant account
You may arrange for a merchant account with a company that offers payment-processing services that are known as merchant service providers.
For small e-business, you may have problems in getting a merchant account. Reputable banks and financial institutions are very selective about who they give merchant account to. Normally, you may not be able to open one if you are new to the internet and just starting your online business. And it seems to be very complicated and expensive to set up your own merchant account, your gateway and secure order form. Fortunately, there are many companies on the net offering these 3 services in one package.
For the beginner, it makes most sense because setting up your site's ability to accept credit cards is going to be lots easier. It involves a lot of information set up time and is ready to go as soon as you sign up. This gives you more time to concentrate on other important stuff like finding a new business venture etc. You can always move to a more expensive, more complex and possibly more reliable service later on if your business grows.
