E-Commerce Payment Options For Your Website

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Good morning internet fans. It is Thursday, June 25th, therefore it is Internet Marketing Thursday, and I have the beautiful and talented Virginie Dorn with Business Website Center down in Petaluma, California. Good morning, Virginie.

Virginie Dorn: Hello, Ryan. How are you doing this morning?

RP: I’m doing fabulous. Thank you. We are going to talk about e-commerce and some different payment plans that are out there. We were talking last week and how there are still people who are new to e-commerce and they’re just not really sure how do you collect payment. And I lost you. Alright. Well, folks, this is the joys of doing live hangouts sometimes. We’ve been fighting. I couldn’t hear her all morning. So, I’ve been fighting with the speaker, and then she disappeared, and now she came back. It’s the great Houdini.

VD: I didn’t do anything.

RP: Uh-huh. That’s what women always say, “It wasn’t me.” It’s always the guys fault. But anyhow, yeah, I was just telling them, we’ve been having fun this morning. I’m like, I feel like I need to put the speaker to my ear just so I can hear you. But let’s not talk about our technical difficulties. Let’s talk about e-commerce, payment options, and how people that are new to e-commerce, may they be selling products, maybe it’s a non-profit, and they’re just not really sure how do you go about collecting payment. And there’s actually a few different ways that people can do that.

VD: Correct. So, to begin with, e-commerce is whenever you need to accept payment on your website, and just as you mentioned, payments can be for products when you sell online, it could be for services rendered, it could be for rental equipment, maybe some pre-payment or deposit and also for donations, which is especially true for non-profit organization. So, there’s different ways you might want to have an e-commerce websites to collect that kind of payment online. The truth of the matter, there are three options and that’s what we’re going to be discussing.

VD: They all have pros and cons. They don’t work for everybody. So, you do have to understand primarily what’s your budget, how quickly do you want this to be integrated onto your website, what type of volume, I mean by this, how much sale do you plan to generate through that shopping cart, and again, what kind of clients you have. Because depending on all those answers, you can pick one of the three options we’ll be discussing. So, should I go…

RP: Right. Well, the other thing I want to say is that and depending on what you’re doing, you may want to pick all three or pick two or three because some people may like to pay this way or don’t like to pay this way. So, I always feel that if you have the ability to give people more options, give them more options.

VD: I agree. So, well, let’s quickly mention the three options and we’ll go in more details into each of them. Number one, it’s a fully integrated system with a merchant processing account and a gateway. The second one is, it’s sort of semi-integration, company like PayPal and keep a little buttons they provide you. And the third one is to actually link to a third party company that handles all the payments for you and that’s done off your site. It might still look like your website, but it will not be happening on your website.

VD: So, your first one, which is a fully integrated payment system on your own website, it’s truly the best out there. It’s the most comprehensive because you have the most flexibility. But it’s also the most expensive to program. And the truth of the matter, a lot of the so called web designer will not be able to program such type of integration because it does require either a PHP or ASP programmer to do the work. But again, if you’re looking at big volume, you want a fully integrated system.

RP: Right. And the one thing I will say, if we’re going to go with a merchant account that on the WordPress side, there are options there. Typically it’s tied into some sort of e-commerce plugin or option that incorporates the gateway and all that information. You just simply have to copy and paste tokens, credentials to get it over. The other thing I do want to say is that if you’re looking to get a merchant account and you haven’t done so, and basically a merchant account allows you to take Visa, Mastercard, Discover, American Express, those types of credit cards is that you do need to pass a credit background, and they want to make sure that they understand what type of payments that you’re processing.

RP: I know, gosh, it was probably two years in that I had mine because I do online payments for my clients, and I picked up a new account and the account was about 10 times the size of a normal account. So I made sure I called my merchant account and said, “I’m going to be processing a payment that’s 10 times my normal amount,” otherwise it could be red flagged and they could hold back payment basically. They could tie it up, verify it, confirm that everything’s legit before they process that payment.

VD: Yes. So, that’s the merchant account. So you need your website, you need the merchant account which is kind of a bank, to make sure the credit card runs smoothly, that it’s not fraudulent, not to red flag it, if it’s a weird amount. But in between, you need a gateway program, and so, that’s what’s required online. The gateway is a software company that actually transcript the information safely and securely from your shopping cart into that merchant account. So, those are different things and that’s something you have to think about. So, the merchant account will be like First Data. First Data is the largest in the world that do the most processing than any other banks. Truly they’re not a bank, they are a financial institution. A lot of banks are using First Data in the background to run their credit card processing.

VD: In between you get a gateway. The most popular one is Authorize.Net, and it’s the most comprehensive one, it gives the most options, it allows for recurring payments. So for instance, if you have a donation-type website and someone wants to give $10 a month, and not all gateway allow for it, so you have to be careful before you sign up to someone, that you have a good webmaster that know how to ask the right questions, because there you are, you paid for a full integration of a new gateway and you find out then it only does one-time payment, it doesn’t do monthly, or it doesn’t allow your customers to go back and edit their credit card information when it changes, maybe the expiration change, if you don’t allow for it. So that could be a huge deal, because here you are, thousands of dollars into programming and you have the wrong gateway. That means you…

RP: Right, and I think what’s really important about what you bring up is that, then it’s really important that you as the client understand what your needs are from the processing. So working with somebody like Virginie who deals with this on a daily basis can actually walk you through, “Hey, here’s some different scenarios, do you plan on doing this? Do you plan on doing this?” And these are things that you typically really only learn about through experience.

VD: Yes, yes. Talk to me, I’m happy to answer questions or give you the questions to ask your merchant account. Because oftentimes your merchant account like First Data will help you decide which gateway works for you, but all the agents don’t know everything, like you and I know Kerry, Kerry is great at that, but if you’re not lucky to have her, you might forget to mention that you do recurring payments on your website. But that’s a full integration, and what’s great about it again the flexibility, it’s comprehensive, it’s customizable, it also has the lowest rate typically, so you pay less per transaction, you pay more upfront with the programming, but less per volume. So if you plan to do thousands and thousands of dollars in revenue on your website, you do want to go to that option because long term it will save you a lot of money.

RP: Right, and I think the only other thing that we should mention that we didn’t is that as far as your hosting, you need to make sure that you have an SSL certificate, too.

VD: Yes. And I’m not sure if it’s a law, but to me it is required whenever you accept payments, the SSL certificate is what enables the HTTPS on your browser, and what it means, it encrypts the information before its sent to your gateway. So it takes all that credit card information, jumble it into a program and then send it to the merchant account, that way it’s secure and nobody can hack into it. And SSL, yes, it’s only $69 a year typically, worth having that investment. So, that’s a fully integrated system, again, more expensive upfront, cheaper in the long run, especially if you do large volume. The second option is a semi-integration, so think of PayPal. So PayPal typically is more per transactions, so the lower percentage rate they charge you for using their services is higher than First Data.

VD: That’s because they handle pretty much everything, they handle the gateway, the credit card processing and they make it very easy. And by semi-integrations, I’m referring more to the little buttons that you can do, you don’t need to be a programmer, you can go into your PayPal account and can actually create widgets and plugins and little buttons. Again, if it’s not fully customizable, I mean, you can make… But if you have a shopping cart with 5,000 products, that’s not going to be an option, because you can’t do 5,000 buttons. You can also use PayPal just like a fully integrated system, but then we go back to option one. So PayPal has what we call in our industry an API, which is an integration format for us, the programmers.

VD: But PayPal again, if it’s a small shopping cart, a gift shop maybe, you’re selling a couple of items a day, great option, very affordable on the upfront, it’s not going to cost you much more by the transaction fee and it’s very easy to do, if you have WordPress you can make it even easier to plug those little buttons there. Now the third one, and people don’t think about it, is a third party company. And by this, I mean, it’s linked to a company that will handle everything for you, they will handle the security, they will handle the collection of the credit card, the ability for people to go back and edit their credit card information and view their order, they handle the fraud, they handle the deposit of the money into your personal or business checking account. It’s a third party, it’s usually more expensive, but they take care of all the issues, that’s what’s so great about them.

VD: So it’s good and bad and everything, good is again, they take care of all the issues, the responsibility of collecting the credit card rest on their shoulders, so if there’s any security breach, it’s their issue, not you, legally. The second part is if they get bought by someone else or they go out of business, then you have to look for another provider. There’s one I like to mention, because we work a lot with non-profit organization, it’s called FrontStream, so frontstream.com. All the non-profit organization, when I switch to them to handle their donation payments, I’ve been very happy with the process. Easy for them to use, doesn’t require programmers, so it saves them money, this is something they can do on their own and you can customize the front script of the platform, like many others, to look out like your website, you know your logo, your color theme.

RP: Okay good, because I was going to ask you about that because I know, especially years ago, it was always kind of frowned upon doing something like that because here you are in a branded website and then all of a sudden you’re taken somewhere else that looks totally foreign, doesn’t have any branding and at that point, it’s like, “Oh, did I just get phished, is this legitimate?” So it was kind of frowned upon because people would actually go all the way to the payment process part and then stop because they were actually referred to another website and that scared them off.

VD: It’s very true, and it’s just recently in the last two to three years when most companies are caught up with the issue. And what they do, they give two options. Either it’s a link to them, and then you can customize it to look kind of like your website so it’s not too much of a departure. Or some of them take it a step further and you can embed their code into your website, so it has the frame of your website, it has your header and your footer, if you have the right column, it has the right column, and in the center is actually their engine, it’s their payment engine. But people don’t realize, kind of like embedding a video from YouTube onto your website. It is your website, the video portion, well, it’s YouTube, it’s just embedding that information. I love embedding third party companies.

VD: Again, it’s relieved a lot of the stress on my customers’ side, they handle everything, they do pay a little bit of more money and when we can embed it, the visitors has a very good and positive experience because it’s still on their website.

RP: Alright, very cool, and I’m glad to hear that they’re actually creating some branding ability. Let’s go back to PayPal as an example and I think some people, when you start out small, your first time, it’s real easy, PayPal, I love the fact that you can create buttons. They do have some flexibility, creates limitations. The nice part is you do not need an SSL certificate, so if something like that scares you, you’re not sure, because PayPal’s handling the transaction, great. The other nice thing about PayPal is that they also accept credit cards, so it’s…

RP: Back in the old days you had to have a PayPal account to use PayPal. Nowadays, people can actually type in their credit cards. And I think if, like you said, Virginie, if it’s small transactions, limited here and there, maybe you don’t have good credit, you’re not able to get a merchant account, PayPal is definitely a way to go. Then as you grow, grow into a merchant account, the one thing I do recommend, regardless of the volume is that you maintain both a PayPal and a merchant account.

RP: And if you’re… If you’re going to make more money off of the merchant account because their fees are less then just simply set that as a priority so that when people go check out it defaults to the merchant account so people can just put in their credit card. But they still have a PayPal option because there’s always going to be that small percentage that’s going to prefer PayPal just because it’s comfortable for them and we just… We don’t want to turn people away.

VD: Yeah, I love giving the two options. And just as you mentioned, typically we put the full credit card processing as an option at the top of the checkout page and the PayPal little logo right underneath, for those few, that do like using their PayPal account, so that takes care of all your type of clients.

RP: Alright, perfect. Well, with that, our time is up, so essentially you’ve got three different options. You’ve got PayPal, hopefully everybody’s pretty familiar with that. There’s the traditional merchant account that requires more set up on your end to take care of it, manage it, plus you have other rules and regulations just around keeping and maintaining credit card information nowadays. And then, the third option is, “Okay, I’m just going to outsource it and let somebody else manage all that, and just understand you gotta pay a little bit more in fees.

VD: Yeah.

RP: Alright, perfect. Well, Virginie, as always I appreciate your time and energy and effort that you put into this. I know the information that you provide to our customer base or the viewers, I should say, is always very good. Thank you very much.

VD: My real pleasure. Take care.

RP: Alright, take care, and we’ll see you all next week.


About the Author:

Ryan Perry is the founder and CEO of Simple Biz Support, Inc. Ryan started video blogging in 2009 as an alternative to written blogs to create visibility and credibility online. During the workweek, he enjoys helping small business owners harness the power of video to grow their companies. On the weekends, he enjoys hiking and searching out waterfalls throughout the state of California.

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