subject: Finding the Right E-commerce Payment Processing [print this page] Finding the Right E-commerce Payment Processing
All online stores need fast and reliable e-commerce payment processing to be able to finalize customer orders. It is usually considered the most important part of an e-commerce site. Without good merchant processing, your business will result in a loss of customers and sales revenue. Choosing the right payment processor is therefore critical for the success of your business.
The purpose of e-commerce payment processing is to verify the payment collected from the customer, and if approved it will extract the total sum of the order from the credit card and credit your business merchant account. It's role is to act as an intermediary between your online store and the various financial institutions that are involved in the transaction. There are several important things to go over when choosing a payment processor. Among the most important is the customer service. If you should ever run into the problem of credit card fraud or customer claims of unreceived goods, the payment processor customer service is the first step in resolving the issue. Good customer service is needed to ensure an efficient and objective resolution. The remaining details include price and mostly what is written in the fine print, which includes:
Application fees
Setup fee
Monthly minimum
Transaction fees
Monthly fees
Terms of payment
Fraud management
Discount rates
Chargebacks
There's also two main types of e-commerce payment processing which your e-commerce solution should be able to offer. These two go by hte names direct integration and third party e-commerce payment processing. Direct integration is the more common of the two, it seamlessly integrates your store checkout with the payment processor. The customer remains on your web site while the payment is being processed. With third party payment processing, the customer actually leaves your website to complete the order on the payment processor's website and as soon as the payment is accepted, he or she will be redirected back to your website.
There are a number of reasons for choosing one kind of e-commerce payment processing over another. For the most part, established e-commerce businesses typically would use direct integration, because it seems more professional to let customers remain on your web site, and it also provides more growth. Third party merchant processing is better suited for online stores that are just in its infancy, have only a small selection of products or only sell e-goods. With this option, not that much is required and it is the less expensive choice. Third party payment processors usually do not charge a monthly fee, that is why it is recommended for businesses that are just starting out and do not have a much capital.
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