Credit Card Processing On-line

 When I started learning about e-commerce, all the terms were confusing and blended together. To help you, here are some basics and definitions.

In broad terms, there are four pieces you should consider in order to handle credit cards (or to have a “Merchant Account”):

  1. Your shopping cart or on-line store
  2. Your bank who handles your money
  3. Your credit card processor who deals with the credit card companies
  4. And optionally, your gateway seamlessly integrates your shopping cart to your credit card processor.

Merchant Account

A Merchant Account is what you need in order to accept credit cards from your customers. A credit card processor (see below) can set you up with a merchant account. A Merchant Account is needed to take credit cards for either an on-line store or a physical store location (known as a brick-and-mortar store). The alternative is to take credit cards through a third-party supplier such as PayPal.

Credit Card Processor

A Credit Card Processor is the company that sets up a merchant account for you to take credit cards. You can also use your credit card processor to take credit cards at your regular shop and through mail order and phone orders. They have various programs to meet your needs for taking credit cards. They typically also can let you take electronic checks and other forms of credit processing. You can either manually input the information from your e-commerce store or use a gateway to automate the process of accepting credit cards on-line.

For your shopping cart, you could use PayPal, but I recommend you get a full Merchant Account of your own so you can take credit cards without the middleman. There are plenty of credit card processors available so shop around. Your banker will have a card processor they work with but be aware of the price differences. If you do shop prices, make sure you understand what you are comparing against so you don’t get tricked by some unscrupulous credit card processor.

Tips For Comparing Rates

  1. Make sure you know what the rate (or the surcharge) would be for rewards cards. Some merchants are paying as much as 1.75% on these cards. There are a growing number of them in the market and this needs to be watched. If you are comparing rates, make sure you ask how rewards cards are handled.
  2. Also make sure you know what your rate (or the surcharge) would be for taking Business / Corporate / Purchasing cards. Some merchants discover that they are paying as much as 4%-5% on these cards when their base rate was reasonably good. This is a fee that is many times disguised so make sure you ask. Many times it is referred to as the Non Qualified Rate. There is a lot you can do to ensure that Business / Corporate / Purchasing cards come in at a better rate (than the Non Qualified rate). My credit card processor has been very willing to help in comparing rates and all of these nuances.

Gateway Services

A Gateway is the link between your e-commerce store and your credit card processing company. You don’t have to have a gateway to take credit cards on-line. Instead you can manually take credit card order info from your e-commerce store and input the information yourself. Unless you have a very low volume store, you will find the hassle of re-inputting the info and the chances of making mistakes makes the extra fees of a Gateway seem reasonable. If you aren’t sure, you can start without the gateway and add it later.

Authorize.Net gatewayIf you need a gateway, I like Authorize.Net and for that reason, I became a partner to make it easier to sign up. You can go to Authorize.Net’s Site for prices and more info. You will need your own the merchant account before getting the gateway. Your credit card processing rep can help you with the fields pertaining to them.

You don’t need to be a Blarneystone client to use this service. I have been using them for quite a while and know they are solid and reputable.