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  • How to Get Started with Ecommerce

    Game Plan

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    Processing Payments: On-Site vs Off-Site

    One of the most important aspects of an ecommerce site is payment processing. It’s critical that you get this right because this is where your customers are providing financial information, and the data must be securely locked down while still flowing efficiently from your customer to the payment gateway to your bank.

    You have two major options: on-site and off-site. Each has its pros and cons, so consider the cost and benefits of each before deciding which way you’ll go.

    Off-Site Payments
    Many small businesses just getting started with ecommerce choose to let a third party handle payment processing because it’s easy to set up, and someone else does all the heavy lifting, including maintaining security protocols and privacy liabilities. PayPal and Amazon Payments are two of the biggest payment processors. You can’t underestimate the trust factor of using these well-known brands to handle your customer transactions. Shoppers want to deal with companies they know and trust. Another advantage is you don’t need a merchant account because you aren’t accepting credit card payments directly.

    But there are downsides. Your customers will leave your site to complete their purchase, with no guarantee they will come back to continue looking at your products. Also, you have little or no control over the checkout experience, apart from some minimal branding with your logo on the checkout screen.

    On-Site Payments
    If your ecommerce site is large and you expect to generate a lot of sales volume, you’ll probably want to set up your own on-site payment processing. This provides a more seamless experience for your customers, who don’t have to leave your site to complete their purchase. In addition, you have complete control over how you manage the checkout experience, including the ability to offer specials and add-ons to boost sales before final checkout.

    All this control requires technological complexity, additional costs, and extra work. You’ll need a merchant account, SSL certificate and PCI compliance, plus a payment gateway. The payment gateway provides the complex infrastructure and security necessary to ensure fast, secure and reliable credit card transactions. Full-featured ecommerce software will have payment gateway support built in.

    There are many payment gateways with differing capabilities. When researching options, consider these factors:

    • Sign-up fees. Some gateways don’t require a sign-up fee but may not offer all the features you need.
    • Transaction fees. The best-known and trusted gateways generally charge higher fees. Even though fees eat into your profits, you must balance that against the importance of establishing trust with your customers. And the big names provide instant trust.
    • Countries and currencies supported. If you’ll be selling globally, choose a gateway that can also handle currency other than U.S. dollars.
    • Product limitations. Certain gateways only allow the sale of physical products, and don’t offer support for digital downloads or services.
    • Payment timing. Some gateways allow for recurring payments, which can save time if you’re selling services or products on a subscription basis. Others allow payments to be taken on a future date.
    • Customer support. Will your customers be happy with email support or would they rather have the option to speak to a real person when things go wrong? Get the level of support you need.
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    • There are many payment gateway options, so it pays to do some research to find the one that has the best combination of features and services for your business. This page provides pros and cons for five gateways, and can help you understand how to compare options for either on-site or off-site solutions.
    • For a list of payment management applications, including capsule descriptions and links to product websites, go here.
    • TopCreditCardProcessors.com identifies and ranks the best credit card processing services and merchant services every month. The site also offers industry news, upcoming conferences and events, and resources all tied to the world of online and offline payment processing.