Taking online payments (e-commerce)

In order to take online payments there are a few options available. Cost is probably going to be one of the most important factors in deciding which option you choose. So, here we go...

The low cost options include services such as Paypal or google checkout. These provide the ability to take credit and debit card transations on a website without the need for SSL. Essentially the provider does all of the processing for you, your website never see's any card details. In order to purchase your product or service however the user is taken away from your website to the providers site. This is often viewed as a little unprofessional looking, but it does the job.

It does have the benefit of being a more accessible payment method for younger customers who may not have a bank card yet as they can link up a bank account instead and use that for payments. These method's of taking online payments typically charge a flat rate of around £1 per transaction and then a small percentage of the total transaction on top of that.

The most professional looking option, and probably the most expensive involves getting what is called an Internet Merchant account from a bank or 'acquirer'. Typically your own business bank will be able to provide this for you.

Along side this, it would be necessary to get a Payment Service Provider (PSP), This is essentially a virtual till/PDQ terminal. Some banks also provide a PSP as part of their online merchant accounts.
Using these, you should be able to accept payments using your website, the user will not be directed away from your page. You will most likely be responsible for the storage of card details and personal information, in which case you will have to invest in an SSL certificate and quite possibly undergo a website audit.

Online Payment Bureau's or online payment gateways are another option to consider. A common example of this would be Worldpay or protx. Using this method is a useful way for SME's to get into e-commerce because the costs are relatively small. There is however a settling period during which your money is held in escrow, this is typically between 30 and 60 days although I understand that after a certian period of time this get's reduced. With this method your users may be directed away from your website, or depending on the provider they may be given a windowed view within your website.

The final, and very old hat way of doing e-commerce could be to use your existing PDQ swipe card machine as the means to take payment, or by credit card slip.
It is my understanding that some banks acquiring services disagree with using your offline merchant account for internet transactions, so you would have to check your terms and conditions. Obviously a downside to this method is that you have to securely transfer the credit card details somewhere and of course the transaction will be manual.

Well, I hope this was of some use. If anyone can think of any other methods of doing e-commerce, or if I have made any mistakes please let me know. All things said please make sure you carefully read through the documentation and terms and conditions for any service you are considering purchasing when heading down the e-commerce route.

Regards,

David.