- American Express & Discover Card
- CISP Certification
- Discount Rates
- Electronic Checks
- Fraud Screening
- High Risk Merchant Accounts
- How Transactions are Processed
- Keyed Transactions
- Merchant Account Fees
- Offshore Merchant Account
- Payment Gateways
- Reasons for a Merchant Account
- Select a Merchant Account Provider
- Terminated Merchant File
- Third Party Processing
- Types of Merchant Accounts
- Understanding AVS
- Understanding Chargebacks
- What is a Merchant Account
Third Party Processing
For the small ecommerce business owner, a third party payment processing system is an easy and economical way to have the benefits of the merchant account without the high set-up costs involved. Providing potential customers with a secure method of paying for their purchases at your website is a vital part of doing business on the internet and will increase your sales significantly. Customers appreciate being able to utilize their credit cards as it provides them with yet another payment option.
Adding the third party payment processing capability to your website is not difficult, usually just a matter of a few lines of html code. Once a customer determines an item they wish to purchase, they will be taken to a secure order page where the information required by the third party provider will be entered. The customer can then be returned to your site to complete the sale and allow you to collect needed shipping information or tracking information.
Third party payment processing companies allow you to accept credit cards without the hassle of a merchant account. Once you insert the required coding onto your web site, it’s a matter of minutes before you’re set up and ready to take orders online. Most people today are familiar with one or more of the many third party payment processing companies. PayPal is one example; iBill and ClickBank are also well-known third party payment processing companies.
Many of the companies do not require set-up fees, although some do. The companies that do require set up fees typically do not charge a significant amount for this service. Third party payment processing companies may charge both a transaction fee and a percentage of the sale amount, such as PayPal, whose current rates are 2.9% plus 30 cents per transaction. PayPal doesn’t require a set up fee.
ClickBank charges a set up fee of $49.00 and transaction fees of $1.00 plus 7.5%. ClickBank can be operated as an affiliate program, which may offset part of the cost of doing business with them.
Neither PayPal nor ClickBank charges monthly fees. Both services allow you to add credit and debit cards, including American Express and Discover, to your website as well as electronic checks. ClickBank allows for acceptance of Novus cards as well. PayPal allows you to run their service on your own website or as part of an online auction account. PayPal also offers the option of recurring billing of customers for such things as an ongoing service or subscription which you provide
A few of the other online third party payment processing companies include Revecom and 2Checkout.
For the customer, the convenience of being able to pay for their transactions as they shop will be appreciated. Your ecommerce store shows a better image when customers understand there are payment options available, including the option of credit or debit cards. For the merchant, the resulting increase in sales without the hassle of keying card numbers, verifying billing addresses, or other security checks are a strong reason for utilizing a third party payment processing center.