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Credit Card Processing Is A Wise E-Business Investment

May 2008

If you’re in business for yourself on the internet you’ve probably been told that to make money you have to spend money. A more accurate way to think about it would be to make money you have to invest money — as in investing back into your Web-based business in the form of services that will increase sales and profits.

This brings us to the decision whether or not to add credit card processing service to your e-store. It would seem to be a no-brainer. Studies have shown that e-stores processing plastic see increased traffic, repeat business, sales and profits. More than 80% of all purchases made over the Web are paid for with a credit card. In the last two months of 2007, the holiday shopping period, close to $30 billion in sales were racked up by e-retailers.

Those numbers are hard to ignore. And while there are going to be some expenses involved with the ability to accept payments online, with a little research you can make a cost-effective choice that helps you maximize the investment.

Indeed, before you even get close to making a decision on a merchant account company, spend some time cruising through a half-dozen provider Web sites. Most sites will include a list of charges and fees associated with doing business with them – and you might be surprised at the differences. Compare charges for things like transaction fees, internet processing gateway fees and statement/customer services fees, among others.

Be cautious of credit card processing companies that charge an application fee, which can vary from $100-300. The major players, as a rule, do not feel the need to levy this. These are the companies whose reputation for service and support mean they don’t need to boost their bottom lines with a lot of add-on fees.

Indeed, when it comes to the costs associated with merchant account services the ability to offer discounts can be attributed to one of two factors. Some companies say they’re cheaper, but make the money with hidden costs and fees. Great providers are able to come in at a lower price point because their customer retention allows them to do so, and those are the companies you’ll want to talk to when you’re ready to accept payments online.

And speaking of costs be wary of doing business with any concern that charges for calls to the technical support department. Good service after the sale should not have a price tag, and this applies to getting help when something’s not working properly and slowing the progress of your business. Plus, unfettered access to support insures that small problems are dealt with before they have a chance to grow into big ones.

Make sure the company you sign up with is also the company that will be processing the transactions. Some use third-party processors that can slow down the amount of time it takes money to be put into your account. And improved cash flow is one more advantage of allowing card processing on your Web store.

A preferred way to sleuth out the good credit card processing companies is to get references and make some calls. A satisfied customer will tell you all you need to know, and should be more believable than what a company will say about itself.

Another good indicator is what the industry says about a provider. Companies like Apple and America Online have ratings for e-commerce providers that give unbiased third-party reviews for companies that give a Web business an avenue to accept payments online.

Jim Osterman is a Web content developer with Charge.com. Charge.com offers a host of credit card processing services for merchants wanting to accept payments online

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