Ecommerce Website Design

By Bethany Ramos

E-commerce is no longer the way of the future. Online shopping has become an accepted practice in almost every age group, with US consumers spending roughly $1200-$1300 per year online. That number is inspected to grow by 44% by 2016, up to $1738 per consumer.

As an E-commerce business owner, providing customers with smooth, user-friendly credit card processing is key to seal the deal and make a sale. Online credit card payments can be accepted securely with or without a third-party merchant account.

E-commerce credit card payments with a merchant account

Accepting credit card payments online is the cornerstone of E-commerce, and the best way to take online payments is to set up an E-commerce credit card processing account. A CCP or merchant account allows you to accept payments online and have them transferred to directly to your business bank account.

You can get a merchant account from:

• Bank
• Business association
• Independent credit card processor

A merchant account will function as a financial arrangement between an E-commerce website and a credit card processor. In layman’s terms, it will allow your business to formally accept credit cards online in real-time through a remotely-hosted payment gateway.

When you apply for a merchant account, the provider will want to verify that you are a legitimate business that won't leave them liable for fraudulent charges. They'll run a basic background check, a credit history review of your owners and officers, and credit references from two to three suppliers.

Once you're approved by a merchant account provider, you'll need to set up your website to work with their system. Any E-commerce provider should be able to work with the merchant account provider of their choice - but do make sure to check.

You can also start by choosing an E-commerce payment processing provider, and they will usually recommend a merchant account provider for you. Be sure you can shop around, though: Avoid E-commerce providers that require you to use their merchant account service.

Merchant account rates will vary with industry averages estimated at 2.65% of each sales transaction; some online merchant account providers advertise rates as low as 2.27%. Batch fees may also apply ranging from $.24-$.35, as well as monthly service fees ranging from $5-$15.

E-commerce credit card payments without a merchant account

It is also possible to accept online payment over the Internet without establishing your own merchant account. Third-party merchants like PayPal or cc:Bill can accept credit cards on your behalf without requiring a credit check.

However, they typically batch your money into regularly scheduled payments, negating the advantage of quick turnaround. In addition, their rates tend to be higher - significantly higher, in some cases - than traditional merchant account providers.

While using PayPal payment exclusively once marked an E-commerce business as a small time operation, industry trends have shifted over the years. Many customers primarily use PayPal to pay for purchases online instead of using a credit card for a transaction. At the very least, customers may appreciate an E-commerce business that offers PayPal verification for added convenience; using PayPal payment in lieu of credit card processing could still limit customer options on an E-commerce website.

PayPal plans for new E-commerce stores start as low as $19.99 per month; existing websites seeking PayPal processing can secure rates ranging from $5-$30 per month, depending on their E-commerce shopping cart.

In most cases, a business that wants to cater to the widest pool of customers can benefit from signing up for service with a merchant provider and integrating extra options, like PayPal payment. An online business can choose the right merchant provider to meet their needs based on their Better Business Bureau rating, money back guarantee, customer service and tech support features, and fee pricing structure.