You can read our explanation of the options for building an on-line shop in our Website Components section by clicking here.
Once visitors have selected the contents of their basket & passed through the checkout pages of the on-line shop, there are several options available for processing payments for orders received from your web site. They fall into two categories.
Most e-commerce websites will offer the customer more than one method of paying but may indicate their preferred method. Each method will have different set up costs, fees, administrative duties and risks associated with them and so the best one will be specific to each business.
Automated On-Line Payment Processing of Credit Cards can save the customer and the merchant time and make for a smoother transaction process.
There are three main options:-
A Payment Bureau retrieves payment on behalf of the merchant and then deposits the money into their regular Business Account. Payment Bureau's are essentially a 'one-stop' shop and offer everything the merchant requires in one place.
Set up fees, annual charges and transaction charges vary. Its pays to shop around.
Advantages include;
The disadvantages include;
This approach requires the merchant to obtain Internet Merchant Account from an Acquiring Bank and then integrate their website with a Payment Service Provider (Gateway), who will transmit card details from the merchants website to the Acquiring Bank. The Acquiring Bank deposits the money into the merchant's regular Business Account.
The Acquiring Bank will carry out thorough credit checks. Typical charges for an Internet Merchant Account might be a set up fee of around £200.00 plus a monthly fee of around £25.00. It pays to shop around. The more transactions made, the less each transaction will cost.
UK Acquiring Banks include:
The Payment Service Provider collects card details over the Internet, passes them to the Acquiring Bank, receives the Approval or Disapproval notice and then conveys this back to the website. The Payment Service Provider acts like an online PDQ machine.
Protx are one such Payment Service Provider and are a Lloyds TSB Cardnet partner. They have a transaction fee of around £20 per month for under 1000 transactions per month.
The money from the transaction is deposited into your Bank account in 2 to 3 working days. Refunds and Voids can be administered through an online account control panel.
The advantages include;
The disadvantages include;
Some websites allow merchants to develop shop fronts within a larger website. An example is eBay, which some companies use as an alternative or addition to developing their own website.
Advantages include:
The disadvantages include:
Merchant's should acquaint themselves with the fraud protection and chargeback policies of the various Payment Processing Companies and Banks.
