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There are a number of ways that online businesses accept payment transactions, including Internet Merchant Accounts, payment processing companies, and online shopping malls. Depending on your business, one of these methods will be more suitable than the others. If your business isn’t subject to a large amount of online payments and you do not currently accept credit or debit card transactions, a payment processing company could be the most suitable method for you. Payment processing companies receive payment from your customers’ credit or debit cards on your behalf and forward the money to you, for a small fee. They offer a useful alternative for businesses that have a smaller turnover from card transactions or who can’t open an Internet Merchant Account with an acquiring bank. There are a number of companies that offer this type of service; because it’s a competitive market it is worth shopping around so as to find the best possible deal. Advantages: - Payment processing companies relieve you of the administrative burden of managing all of your customers’ card details and running an Internet Merchant Account. For those of you who lack organisation this could be more than helpful. - They save you the hassle of having to set up secure payment systems, a task that can be overwhelming for a less technically minded person. - An application for a payment processing company can be processed far quicker than one for an IMA; useful if you need a short-term solution. - They have less strict application procedures than what is required for an IMA. For instance, in most cases you will not be required to supply the same level of detailed information about your business plan, trading history and suppliers. Disadvantages: - Customers can see that the payment is not going directly to you, despite the fact that they may be conducting the transaction via your website. - Payment processing companies can hold your payments for a settlement period, this can be anywhere between 30 and 60 days, so if you need quick access to your cash it is not ideal. - Charges for payment processing companies are generally higher than what you would experience when using an Internet Merchant Account. Although it is a competitive market so there are good deals out there. - If a card is used fraudulently then the value of that transaction will be reclaimed from your business. Although insurance are sometimes available to cover you from the risk of fraud. If you’re in need of a merchant account or a payment processor then why not try looking online?
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