Online Store Payment Options

Online Store Payment Options – Internet Merchant Accounts

An Internet Merchant Account is an account issued by a financial institution that enables a business to accept credit card payments online. Businesses must obtain a separate Internet Merchant Account for each type of credit card they wish to accept (e.g. VISA, Mastercard, American Express).

How do You Obtain an Internet Merchant Account?

You will need to open a business account with a bank.  The bank will conduct a credit risk assessment. You may want to consider preparing a business plan in advance. You may also be required to submit a large security deposit. With this type of account, the process of transferring money to the right account is automatic and occurs quickly. There are some companies that are authorized by the banks to issue merchant identifications.

Online Store Payment Options – Third Party Payment Processing

These services offer an alternative to obtaining an Internet Merchant Account. The advantage of this alternative is that it is possible to start selling Online more quickly and easily. There are registration, transaction, and monthly fees attached.

There may also be a longer hold back period before the balance of a sale is turned over to the merchant. PayPal is the most popular third-party online service provider.

PayPal and merchant accounts charge transaction fees, including a percentage of the sale plus a flat fee per transaction. Charges based on the number of transactions may be appropriate for micro businesses or where the number of transactions is limited.

How does this type of processing work?

The money from the transaction is deposited in a special account controlled by the service provider. To obtain your money, the merchant is usually required to initiate the transfer. If there is a dispute over the transaction, the service provider may hold these funds for longer periods

Online Store Payment Options – Manual Credit Card Processing

You can set up an e-commerce website where users can order Online, but you process credit cards manually rather than rely on Online payment processing options. With this option, credit card information can be obtained through a secure server and the transaction can be processed manually. This option is feasible when you have a limited number of Online orders.

Manual credit card processing may be required in instances where Internet and phone services are not available, or when utilizing such services would be impractical. Trade shows, concerts, flea markets and special events are places where manual card processing might be used.

In addition, merchants who have locations that have been impacted by natural disaster, electrical or system failure may need to process manually to maintain sales activity.

Manual Processing Without Equipment

Merchants can also write out a sales slip and write down the credit card information without an imprint machine. Customers will still sign the written sales slip to agree to the charges.

In either case, the following information is required:

  • The credit card number
  • Expiration date
  • CVV2 code (three-digit code on the back of the card)
  • Billing address
  • Customer signature

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