Technological changes have seen businesses move from accepting cash payments to credit card support. This convenient method allows us to order products from anywhere in the US, pay via mobile and add it to your credit card bill.
As a business owner, aside from getting your e-commerce business license, your payment processing framework is the next most important task on your to-do list. The processing company you choose should be able to offer quick-time transactions so that you can deliver fast-track services for your customers.
The entire e-commerce credit card payment system does not need to be understood by customers. But as an online store owner, you need to have a basic understanding so you can comfortably decide which payment processor to use for your online store.
Regarding e-commerce, certain factors influence your store, including your operating license and payment system. Payment systems are primarily restricted to digital, eliminating the use of physical cash payments.
Here are the regular modes of payment systems used in e-commerce:
A debit card comes with a unique number from the customer’s bank. A customer paying with a debit card means they have the funds in their bank account, and the payment processing company withdraws from the available funds.
Many customers use a debit card since it allows them to place limits on their daily spending habits. It’s also a way to handle cash and cheques. The chances that conversion happens when a customer holds a debit card are lower than usual.
Credit cards are the most popular way for customers to pay for goods in e-commerce stores. Like debit cards, credit cards carry a unique number and a chip for card readers at physical payment terminals (POS).
Unlike a debit card, a credit card does not require a customer to have funds in the account before processing payment. When the customer pays for an item, the issuing bank makes a credit payment on their behalf and adds it to the customer’s credit card bill. Usually, it is around a month before payment is due.
Let’s look at how you can channel credit card processing into your business.
About Credit Card Processing eCommerce System
The act of receiving payments online means from your customers is termed e-commerce payment processing. Payment occurs via gateways through which the client’s financial details are passed between the payment processors and your enterprise, ensuring transactions go smoothly.
Customers enter their details when they shop at your online store and reach checkout. The information moves through the gateway in an encrypted format to the processor. This processor sends a request to your client’s bank, confirming that there are available funds and authorization for the transaction. Once the application is granted, the funds are debited, and your merchant account is credited.
When it comes to credit card processing for e-commerce, your payment processor allows money to be moved conveniently for you and the customer. Just like regular digital payment, credit cards have a similar operation.
Three parties are involved here: the customer, the third-party processor, and the merchant accounts. As an entrepreneur, your decision plays a huge role in all entities, affecting the fees you pay and the experience your customers have. Here, the money doesn’t come directly into your personal account after it has been debited. It is deposited into a merchant account.
A merchant account allows businesses to accept all forms of payment, including credit and debit cards. Once the partner bank approves a transaction, funds are deposited in your merchant account. Since credit cards mean your customer hasn’t paid yet, your merchant account is usually considered a credit facility.
So, like regular digital payments, credit cards offer a line of credit to the merchant’s account, provided the customer’s bank allows it.
As we stated, having a merchant account is how businesses process card payments for their e-commerce websites. You can get such an account from a dedicated processing company or bank.
The majority of providers allow payments in credit and debit cards. Credit card networks like Discover, American Express, Mastercard, and Visa also access these platforms. There are charges involved, such as those for:
Yes, handling credit card payment processing for your online store can get expensive!
The payment gateway connects your business page to the payment processor. Before the transfer, it will confirm the validity of the credit cards, and the issuing bank encrypts the information and sends the request for approval.
It sounds complex, but with PaymentUSA’s swift strategy, you don’t need to worry yourself. This involves:
Why You Should Understand eCommerce Credit Card Processing
While it might not seem like the most interesting topic, there are several benefits to understanding your e-commerce credit card processing system. Here are some of them:
E-commerce businesses are subject to a high rate of fraud. In the final months of 2021, TransUnion reported a 25% increase in the number of online credit card fraud attempts within the US compared to the same period in view for 2020.
Card Not Present (CNP) payments and a lack of sufficient fraud detection innovations have exposed several online stores to loss. Choosing a credit card processor that offers fraud prevention packages is essential. But you won’t know how to select the best option for your business without understanding the process.
Many customers use a debit card since it allows them to place limits on their daily spending habits. It’s also a way to handle cash and cheques. The chances that conversion happens when a customer holds a debit card are lower than usual.
A reliable e-commerce website credit card processing gateway offers your customers a convenient way of paying for products. Aside from credit cards, your customers have other options, like mobile wallets. Mobile payments are another vital payment option in the US and mobile payments will only increase in the future.
Credit card processing for e-commerce comes with its own charges. They vary among the different payment processors, and your knowledge of what is involved can allow you to make wise decisions. You could lose profits by paying exorbitant fees if you select the wrong option.
With an understanding of the merchant e-commerce credit card processing operation, you will be able to select which has a great payment plan for you.
Your customers expect to pay for items quickly. The credit card processing option becomes valuable since the transaction can be done in minutes. If you only accept money orders or checks, the process of clearing the funds can take a long time – maybe months – putting stress on your business.
Customers prefer to shop on sites with an e-commerce credit card payment gateway. Adding this payment system to options for your store is one of the best decisions you could make for your business.
The biggest reason why you should understand the credit card payment process e-commerce and subscribe to it is the regular cash flow it guarantees. Once a customer completes a purchase via credit card, your merchant account will receive the funds almost immediately. This means you can restock your online store, pay workers, settle bills, and still have funds for strategic advertising across different mediums.
An e-commerce credit card payment gateway allows for the funding of accounts almost immediately, giving you the chance to calculate the day’s profits instantly.
Besides that, a lack of cash flow in your business means you could be left behind quickly as other competitors scale up.
Charges Associated with eCommerce Credit Card Processing Services
Since you’re considering using an e-commerce credit card payment system, knowing the associated charges is essential. It’s important to note that while merchant e-commerce credit card processing makes payments look simple, there is a lot going on behind the scenes.
First, you should understand what the total fee is. This is the total amount of all the charges for all parties involved in your merchant account management. Also known as the effective rate, here’s a breakdown of the total amount.
Remember that your decision is essential, especially regarding the fees you will be paying. While the interchange and assessment rates are slightly negotiable, the real bargaining is in cancellation fee.
Almost all online shoppers at e-commerce websites prefer doing so with a credit card, according to research done by TSYS Consumer. Besides, customers who use a credit card for payment spend more than the other categories.
Hence, supporting this payment processing type and knowing how to navigate the fees is essential. The primary reason is to help you understand what you’re supposed to budget for payment gateway charges.
Here’s a great example: suppose your online store makes $500,000 in revenue annually, and over 75% of all purchases are made via credit card ($375,000).
If your net profit is 10%, it means you make $50,000 per year as a profit. If you manage to negotiate fees on all credit card processing per transaction to 3.3%, you only have to pay $12,375 in charges every year.
You could be lucky and find a credit card payment processing e-commerce firm that passes these charges to your customers instead. This is challenging to find, however.
Now that you understand what the e-commerce credit card processing service is about, next comes considering how to get started with this infrastructure.
Selecting the right e-commerce credit card payment gateway depends on your choice of payment processor. This step is instrumental in determining the kind of experience you’ll offer your customers.
Research will be needed here, as you will need a platform that answers the following questions for you:
Many business analysts would tell you that finding such a payment processing company that ticks all the boxes is hard or impossible. However, with PaymentUSA’s e-commerce credit card processing services, you can be sure that all your questions are answered satisfactorily.
Once your online store is up and running, you should find a platform that can easily integrate its software with your website. The integration varies by company and is another essential feature a payment processor should have. Depending on the company, there might be pre-installed integrations with known platforms and other critical business management features to aid your business.
After integration, you should ensure there is provision for a test transaction to confirm how compatible the payment gateway is with your business website. Credit card processing in e-commerce is delicate and should be treated as such. If a customer experiences a mishap or system glitch, it could put them off doing business with you.
There are many ways a demo transaction can be carried out. Modern-day credit card processing e-commerce providers usually offer a bogus gateway where you can confirm that all transaction nodules are working perfectly.
Alternatively, you can make a small transaction using a credit card and refund the amount. This method is fantastic for confirming the transaction charges per each credit card purchase.
What You Should Consider When Selecting an eCommerce Credit Card Processing Company
Like most other forms of businesses and payment gateway providers, selecting the ideal partner depends on certain factors. The things to look for include:
To process payments reliably, your e-commerce website needs strong security. The ideal partner should have an SSL certificate (secure sockets layer).
An SSL certificate encrypts all information passed through the gateway, protecting your business from being hacked and customers’ financial information in the open.
In addition to the SSL certificate, the processing company should comply with PCI regulations. All credit card companies require that the payment processing firm complies, guaranteeing adequate security.
The e-commerce industry is a global market, and there are chances that you may need to use all types of payment support to ensure convenience for your customer. The ideal payment processor should be able to support all other kinds of payments aside from credit and debit cards.
Payment methods to look out for include mobile payment (Apple Pay, Google Pay), PayPal, Stripe, and Amazon Pay.
PaymentUSA - The Top eCommerce Payment Processor for your Company
PaymentUSA is a top service offering quality offerings with an excellent payment plan. Its proven strategies over time offer businesses a clear payment gateway plan. The flexible processing fees allow everyone to register and partner with the company, knowing they are registered with a unique payment partner.
In addition to a mobile payment app, PaymentUSA also offers a virtual terminal, which is easily integrated with any software you use. We also support multiple payment types, allowing you the flexibility and chance to provide your customers with the best experience.
Whether you own a startup or a running business, electronic payments have never been easy. But with PaymentUSA, it’s simple and secure. Here are other unique features of the PaymentUSA platform:
All strategies are compliant with PCI guidelines, ensuring that you do not expose yourself to the risk of lawsuits. In addition, robust customer support provides you with instant access to experienced customer service agents 24/7. You can choose to contact support by phone or email.
Ready to Process Payments Faster?
We understand you might feel overwhelmed with options, and finding the right platform offering you the services you need and an affordable plan is challenging. At PaymentUSA, it’s our job to ensure that all you need is available in one platform and that management of your payments is swift and secure.
Please take advantage of our consultation sessions and book a meeting with our agents. You can find an awesome plan for you and get you started in no time.
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