Payment Gateways

Virtual Payment Processing Services

Online Credit Card ProcessingThe use of payment gateways, online shopping carts, and virtual terminals makes it possible to accept credit cards online or through your smartphone, laptop, or desktop computer. While most people think of online merchant services as being related to e-commerce websites, there are some great solutions that can work in lieu of credit card terminals for those who don't take cards in person.

Solutions for Entrepreneurs

Third Party Processing

Third party payment processors make it possible for you to take payments for one-off services, auction sales, and other transactions with a minimal amount of setup. Many independent contractors and internet-only freelancers use PayPal and 2CheckOut to get payments via credit card without having to open a merchant account. The disadvantage of this approach is that there may be a certain hold time on transactions as part of the anti-fraud controls inherent in these systems. A secondary disadvantage to this approach is that you are paying inflated fees for credit card acceptance. If you start taking more than $5,000 a month via credit card, you should seriously consider a merchant account through a payment gateway provider. Most legitimate processors can hook you up with this service or transition you over to traditional terminal-based processing if you get into running a shop and taking regular credit cards.

The field of e-commerce credit card processing often leaves the consumer with room to make a lot more money by moving away from the "default" processor who may be integrated with the shopping cart. Open source carts generally allow you to get your own processor, while proprietary carts may be offering you cheap software because they are making all of their money on merchant services markups. In some cases you may be able to save 1-2% on processing.

A key diffence between online processing and in-store processing is the presence of the card. CNP processing costs more because there is a higher risk of fraud. As a company owner, you can establish a positive history of transaction processing by controlling fraud and keeping chargeback rates low. When it comes time to renegotiate your merchant services agreement, a low chargeback ratio can give you leverage to slash fees and markups on the interchange rate. By using AVS to match consumer information, you can save yourself the headache of fraudsters who use stolen cards. (Note that these people WILL find your site and try to run a stolen card on it. If it works, they will hit you will a lot of bad transactions. You will think everything is great, but in reality you are in for a nasty surprise because you have to eat the costs of all the stolen goods and chargebacks.) An aggressive approach to card verification online, and follow-ups with customers, can stop scammers in their tracks and force them to move on to another target.