Processing Payments & your eCommerce store:
Processing payment programs are the least understood part of running an eCommerce store- solely for the reason it is completely bewildering! Most people turn to the old faithful Paypal, but people that use Paypal as their processing program will tell you its neither faithful nor inexpensive.
This is one area where you really need do your homework. Some Processing Payments programs have a free monthly account but you pay a higher transaction fee, others have a large monthly fee but the % they take is less.
Crunch the numbers and find which package suits your business.
Why do you need a Processing Payments program?
- It is exactly the same as having a retail store, you need to connect your EFTPOS terminal (through a bank) so you can receive payments from customers via Mastercard, Visa, American Express and Diners.
- Processing payment programs handle the credit card security aspect of your eCommerce store. The compliance involved in protecting your eCommerce store from fraud and hackers is too onerous for small businesses so you need to have a third-party handling this.
- Tax Invoices will be handled by the processing payment program. When a customer makes a purchase they will be automatically emailed a tax invoice as will you. Advanced programs will connect your invoices with your accounting program such as XERO or MYOB. You pay extra for this feature but long term it will save you hours in double handling and bookkeeping.
- Trust. Customers who see the logo of a well known bank or credit card company are more likely to purchase.
Questions to ask before signing with a Payment Processing company?
- Does the payment facility include different tax rates such as 10% GST, VAT etc
- Can you accept International Payments?
- Is there phone support in case things go pear shaped (they will!)
- How long will it take to get your money? Some payment processors take 3-5 days, others are 24-hours.
- How secure is the payment gateway? What encryption program does the processing software use?
- How well regarded is the company? Will potential customers trust the brand?
- Can you add your own branding to the Tax Invoice templates?
- Who handles disagreements with fraud and missing monies?
- Where is the payment program hosted? Is it in a trustworthy country such as USA, UK or Australia?
- How much are you charged if a customer asks for a refund?
What sets Payment Processing Software Programs apart?
- Invoice syncing which automatically inputs invoices into your bookkeeping program
- The Payment facility you choose needs to work with all manner of shopping cart software
- Can customers automatically sign up to the mailing list when they purchase?
- Inventory and stock control automatically syncing with your shopping cart program.
- Saved Sessions- if a customer attempts to purchase four items and then gets distracted and visits your website 8 hours later, will the website remember their order?
- Reporting. How easy is it to get critical sales data? Can it be exported via a csv file or a PDF?
- Automatic backup so you can always get access to your sales data
What type of payment system should you use?
We recommend at least initially to use PayPal as the payment gateway if you are dipping your toe into the eCommerce world for the first time. It is by far the best known payment processor online, is secure and is easy to set up and install. It is less of a financial risk initially as there are no ongoing fees (for a basic package) but long term PayPal is expensive. PayPal seller fees are 2.9% + 30 cent transaction fee and takes 3-4 days to get access to your money. If you’re starting a new eCommerce store then spend your spare time on marketing than worrying about setting up a technical processing payment software program.
There are numerous other payment platforms all vying to take the reigns off Paypal. Some are horrendous, some are great and some are expensive. The payment processing options for the Australian market differ hugely from the US and Europe.
In the next installment we’ll be discussing the various companies that handle payments processing in depth.