There are several choices available to a merchant to start to accept payments via the web, including building an online shopping cart themselves (writing the software), buying a third-party piece of software to do this (such as Basware or Tieto), adding a third-party payment system (such as AcceptPay or PayPal for example) or using an aggregator service (such as PaySwyft for example).
Whatever option is finally selected, there are several issues for a merchant to think about:
Many considerations need to be fleshed out when deciding on what type of customer service is needed for your customers. For example, is the system going to be user-friendly to all people who may be interested in using it? do you need 24/7, 365 days a year availability? Do you require international payments? or can your system quickly find a payment transaction when needed (and can it communicate easily with the customer -via online means, when necessary)?
As with accepting credit or debit card payments in person (or via a phone call), any merchant accepting credit cards as a payment type must ensure that they are in compliance with the Payment Card Industry (PCI) Security Standards Council’s rules. The PCI Security Standards Council offers comprehensive standards and supporting materials to enhance payment card data security. The PCI Data Security Standard includes requirements for security management, policies, procedures, network architecture, software design and other critical protective measures. With an internal or purchased solution PCI compliance has to be handled directly.
External payment system providers clearly need to have a very good understanding of the requirements and be able to both help the merchant on best practices for securing credit card data, or in some cases handle this on the merchant’s behalf. This means that tasks such as tokenization and encryption etc are handled by the third-party helping the merchant to better manage the risk of charge-backs, identity theft and other abuses. Once again, providers will have very different approaches and it is worth discussing these in detail.
One other issue to think about when accepting credit or debit card payments through the web is costs or fees. Many businesses that operate on low margins could see those margins deteriorate even more as credit or debit card fees (direct and indirect) would add an additional (and perhaps unnecessary) layer of cost.
Although fees are payable to process payments with an internally developed or software based solution, third-party providers can also charge a courtesy or convenience fee. Merchants need to be aware that a convenience fee is not allowed as a method of just passing on credit or debit card processing charges. According to the Merchant Council, “Surcharging customers for paying with a credit card is considered discrimination based on payment type. A convenience fee is a charge for offering customers another payment option that is separate and in addition to standard payment methods.” All fees therefore need to be carefully scrutinized ahead of time so that there are no surprises when a monthly transactional statement is sent.
In the final analysis, as payment channels and options on the web expand, and more and more customers become comfortable with the whole process of paying electronically, offering payment capability via the Internet will become more standard for most businesses. However, there are several possible strategies available to achieve this and several important areas of consideration to take into account. In this article we have briefly explored five of these, namely: Branding/Marketing issues, Website Availability, Customer Service, PCI-Compliance issues and finally Costs/fees.