Accepting
Credit-Cards Orders
Before I recommend my preferred course of action, you may need an overview of
the differing approaches, but make no mistake of it's importance to your
online survival.
The following is the way most retail companies take credit-cards on
the Internet. I will show you a tactic that is easier and less costly.
Benefits & Headaches of The Standard Method
Accepting online credit card orders is a must
for everyone who does business on the Internet.
If you do not accept credit card orders you
could lose an expected 85% of your potential sales. Most online
businesses report that 95% of their orders are through online order
forms.
I have found virtually all my sales are by
credit card, with very few exceptions.
To accept online credit card orders online, unless you use third party
processors like ClickBank, you need three basic things:
Merchant Account:
A Merchant account is a special account that you have with a
financial institution in order to accept credit cards. Even if you
already accept credit cards for your offline transactions, that may not
be enough.
Credit card companies consider Internet transactions to be riskier
than other standard transactions; so, not all accounts permit Internet
transactions. If your current account does not allow Internet
transactions, you have to contact your financial institution to correct
this.
To maintain a standard merchant account, you must pay the following
monthly fees:
-
Discount fee - For Internet sales, this fee should be between 2.5%
and 2.9%. You should be suspicious of any discount rate that is less
than that.
-
Transaction fee - This fee should be between $0.20 and $0.30 per
transaction.
-
Address Verification Fee (AVS) - This fee should be $0.05 per
transaction. Some (very rare) financial institutions may not require
this service, but it is a must for you because it helps to prevent
fraud.
-
Statement fee - This fee is usually between $10 and $15 per month.
For example, if you sell software applications for $20 , and you sell
20 applications per month, your fees are $25-30 per month, which is
approximately 7%.
Brokers:
There are many brokers available who can
open a Merchant account for you. Their conditions for opening an account
may vary drastically, which can make it difficult for you to decide
which account is best for you.
Most brokers will offer to sell or lease
expensive equipment to you, when they open your account. Do not be
fooled; That is how they make their money.
You do not need any software or equipment
to open a Merchant account. .
To open an account, all you should have
to do is pay is processing fee, that should be enough for you to start
accepting credit cards.
Software:
Most brokers who open Merchant accounts
offer software or hardware to process credit cards. If you want to
accept credit cards over the Internet, you may need a software solution,
not a hardware solution.
With a software solution, you will never
have to enter your transactions manually.
Direct Sales
And The Truth About Merchant
Accounts
I will let you in on a little "secret!"
You don't need an expensive Merchant Account and fancy software to
accept credit cards on the Internet! You can use a credit card
processing service and not even pay setup fees or monthly fees!
You will have no need to pay for expensive processing software, a
secure server, monthly 'gateway' fees or 'minimum transaction fees'!
This way, your only charge is a percentage of the cost
of the transaction. In this manner you cannot lose money as you only pay
fees if you sell your product.
What is a third party credit card processor?
A so-called "third party credit card processor" is, in
this case, a company that can accept credit card orders on behalf of you
or your company. This makes obtaining a merchant account for your
company unnecessary, although it could be worthwhile if you sell enough
goods to warrant the expense involved
Third Party credit card processor companies own
merchant accounts with the additional rights to use that merchant
account to accept credit card orders on behalf of other companies.
ClickBank:
If you are intending to sell downloadable product, as I do, there is
no processing company better than ClickBank!, Period!
For your customer they are simplicity itself. In fact, when I purchase
anything on the Internet, whenever possible, I purposely order through a
ClickBank merchant.
ClickBank will enable you to accept Visa, MasterCard,
American Express, Discover, Eurocard, Visa-Debit, MasterCard-Debit and
Novus cards.
No merchant account is required.
They charge a one-time $49.95 activation fee, and a $1 + 7.5% fee per
sale.
There are no monthly fees.
The great thing about this company is that well over
60,000 affiliates can choose to sell your products for you. ClickBank
enables any web seller to automatically pay sales commissions to
affiliates. Clickbank will bill your customers, pay you, and pay your
affiliates a commission. In other words, they'll run your entire
affiliate program for you. In addition, their services are available for
non-US merchants.
ClickBank is intended to be used for electronic merchandise only,
perfect for a direct sales business.
Also, when it becomes time for you to set-up your very
own Affiliate Program, ClickBank makes that easy and productive.
For an overview click the button....
There are a few other third party credit
card processors and while they may not be as easy to use or as
cost-effective as ClickBank each of these is a vast improvement and less
costly than the standard form of credit-card service requiring a
merchant account.
