|
<%=Header%> |
E-Commerce & Merchant Accounts
The first step to a merchant account is explaining what one is and why it is so important to have as a part of your eCommerce hosting solution. Merchant Accounts are different from standard business banking accounts in that they allow you to accept credit cards and/or debit cards as a form of payment from your online customers. When you get a merchant account you get a Merchant ID number and a POS (point of sale terminal). The POS has the ability to "communicate" over standard telephone lines much like a fax machine. This allows you to "swipe" a credit card or debit card, which reads the magnetic stripe and records the customer information. The POS then sends this information and the details of the purchase to the respective authorizing institution (VISA, AMEX, etc. or customers bank, in the case of debit). The institution sends back confirmation that credit/funds are available in the form of an authorized or declined receipt. In instances where the POS terminal is broken or you cannot otherwise get authorization using the POS, you are provided with a 1-800 telephone # that you can manually call in order to process a transaction.
A merchant account to process Internet transactions has one final distinction and is commonly known as a MOTO (mail order / telephone order) merchant account. Simply obtaining this type of merchant account does not automatically provide you with real-time transaction processing. You will, and in fact should (depending on how many transactions you initially process), start off processing the transactions manually. We will discuss this more in the article "Transaction Processing".
There are a number of ways you can get a merchant account:
1. Your current business banking institution will almost certainly have some form of merchant account services. If you are unable to get a merchant account with your bank, consider non-banking institutions.
2. Non-bank institutions; these are transaction clearing service providers that typically include mandatory real-time credit card authorization with the merchant account.
3. Your web host provider may have established partnerships with merchant account providers. They may be banks or non-bank institutions.
You would do well to understand the fees associated with any type of merchant service. One relatively unknown fact about Internet transactions is the requirement to first ship the product before actually charging the customer card ("posting"). Obviously you must authorize the card first to confirm the funds are available, or that the card is not stolen; but "posting" the transfer of funds to your account, must be done after shipment is underway.
Here's some considerations to take into account (excuse the pun):
1. The Merchant Account provider you select may have an impact on the shopping cart you can choose. This has to do with real-time transaction processing where the "Pay Now" button is linked to their authorization services. Though you may not elect to do this right away, it will likely become impossible for you to manually process all transactions in the future. Check to see what shopping cart applications they support.
2. The Merchant Account provider you choose may have an impact on the shopping cart you can choose. This has to do with real-time transaction processing where the "Pay Now" button is linked to their authorization services. Though you may not elect to do this right away, it will likely become impossible for you to manually process all transactions in the future. Check to see what shopping cart applications they support.
3. Transaction processing fees; these are separate from the standard card (VISA, AMEX...) fees. Whether manual or real-time, look around, compare, and negotiate these fees. If it sounds too good to be true…
In our next article we discuss how to display your products and enable the first step of taking orders. As we continue, remember that e-commerce is integrated web based business and requires a number of applications and providers working in unison. This fact demands you understand the entire process before making final decisions. Be sure you visit Hostway eCommerce solutions page first.
|
|
|
|
