If you want to sell a product or service online, accepting credit cards will significantly increase your sales. While alternative payment methods, like bank transfers, digital currencies such as Bitcoin and mobile payments are available and in use by some sites, credit cards remain the gold standard in online transactions.
There are two ways to accept credit card payments online. One is to use a merchant account offered by a financial institution. This is usually only an option if you already have a physical store that accepts credit cards, or if you plan on running a very large e-commerce sites. Most banks will require you to demonstrate that you will process a high amount of transactions before issuing you with a merchant account.
A better alternative is to use a third-party payment processor, such as Authorize.net, Skrill, Amazon Payments or PayPal. In most cases, you can sign up instantly and there are no setup charges to pay. Whenever you make a sale, the funds are added to your payment processor account and can later be transferred to your bank account.
If you want to save money and maximize your profits, you should carefully choose the payment processor you will be dealing with. While creating an account is free, you will pay a fee for every credit card transaction processed for you. This fee can range from 0.5% to 5% of the sale amount depending on the company you’re dealing with. Do a comparison of the fees charged by different companies to find out which one offers the most advantageous rates for your business. You will find that some payment processors are better suited for businesses that sell very inexpensive items, while others are better if you sell higher-priced goods.
While all services that process online payments are very secure and have fraud prevention mechanisms put in place, you should review the terms and conditions of the company you’re using to find out what happens if a transaction is fraudulent or if a customer disputes a charge. Some companies will simply reverse the transaction, causing you to lose your money. Others offer better protection against fraud and will not hold you responsible for fraudulent purchases if you can provide tracking information proving that you’ve sent an item to the address provided during checkout.