Take Payments on your website

Merchant Accounts, Payment Processor (Gateways), & Shopping Carts -

In order to take payments on your website you need what's called a merchant account with a "payment gateway". A payment gateway is an e-commerce application service provider that authorizes payments for e-businesses. It is the equivalent of a physical point of sale terminal located in most retail outlets. Payment gateways encrypt sensitive information, such as credit card numbers, to ensure that information passes securely between the customer and the merchant. Essentially a payment gateway (processor) acts as a middle man between the merchant account (bank card companies/banks) and your website and it's customers.

Also, If you want your customers to be able to browse your site and pick and choose multiple items and add them to a basket then you will need all three of the following....a merchant account, a payment gateway AND a shopping cart.

Merchant Accounts -

A merchant account is a contract under which an acquiring bank extends a line of credit to a merchant (you) who wishes to accept credit card payment transactions of a particular card association brand online. Without such a contracted account, one cannot accept payments by any of the major credit card brands (with certain exceptions). 

In the past getting a merchant account involved a fairly time consuming application process and as with any new technology, merchant account set up and monthly fees were fairly pricey. Not so anymore. Now you can get a secure, full featured merchant account from a reputable company on the Internet and be up and running within hours...not days or weeks.

If you want to take credit card payments on the Internet two companies stand out in my mind when considering a new merchant account. I recommend these two to any Internet marketer looking for a viable merchant account solution.

http://www.merchantexpress.com  Great $9.95/month

http://www.merchantinc.com   Good $19.95/month

Payment Gateways.....

Payment processing (gateway) companies are now the most common and mainstream way of accepting payments on your web site. Not only do they act as a mediator between your website customers and your mercant account, but now the lines between traditional payment gateway and merchant account providers are starting to blur a bit.

For example, certain gateway companies have established themselves as reliable mediators between the merchant account/banks and your site/your customers but as the Internet has evolved a few companies are beginning to stand out as leaders in the Payment Gateway arena. Offering additional services to customers not offered in the past. They host the payment software on their servers and take care of all the transaction details for you. Some even provide a simple shopping cart solution for you. While others have started to transcend the line between merchant account provider and payment gateway provider. Paypal is one such company.

Paypal -

Paypal is one of the most well known and reliable payment gateway companies on the Internet today. The nice thing about using a Paypal as a payment gateway is you don't necessarily NEED a merchant account or even a shopping cart integrated with your site if all you want to do is take single payments for physical OR digital items online.

Paypal has been around since 2000 and it serves as an electronic alternative to traditional paper methods such as cheques and money orders. PayPal performs payment processing for online vendors, auction sites, and other corporate users, for which it charges a fee. In effect, Paypal acts as their own gateway and merchant account vendor all rolled into one. However, they do give customers the option of using them strictly as a payment gateway provider if you you already have a good relationship with another merchant account provider. The benefit this give you is in options to your customers.

Paypal is one of the larger payment processors for taking payments online. It is owned and operated by eBay.

When Internet Marketers should use Paypal:

eBay

If you are going to sell on eBay, definitely use Paypal as a payment processor to take payments. Of course eBay encourages the use of Paypal because they make money off the transactions, but for sellers AND buyers this is the most secure way to pay and be paid. I resisted using Paypal as an eBay seller for some time because of the fees involved. I soon regreted it. Read my horror story here.

Send someone money personally

Paypal has made it extremely easy to send anyone in the world a monetary payment online. All a person has to do to take a payment is set up an account with Paypal and their email address becomes their payment address. If you want to make a payment to someone all you have to know is their "Paypal email address".

PayPal allows customers to send, receive, and hold funds in 19 currencies worldwide. These currencies are the U.S. dollar, Canadian dollar, Australian dollar, Euro, Pound sterling, Japanese yen, Chinese renminbi, Czech Koruna, Danish krone, Hong Kong dollar, Hungarian forint, Israeli new sheqel, Mexican pesos, New Zealand dollar, Norwegian krone, Polish zloty, Singapore dollar, Swedish krona, and Swiss franc.

Take payments on a website for physical goods

Let's say you have a brick and mortar store and have or are going to have a website for that store but you would like to sell some of your goods online. Paypal would be a great way to take payments for these items sold on your web page.

Take payments for digital information sales sites ONLY if

You have had a Paypal account for over a year and have regularly taken payments for all your digital products over that period of time. The longer the better. If you are going to sell information do NOT set up a new Paypal account and just go at it. See below...

When Internet Marketers should NOT use Paypal:

New accounts with Information Products - Suppose you start selling information on the Internet. You have a big digital product launch and your only means of taking a payment on your website is your brand new Paypal account. The big day comes and all your hard work is about to pay off. The product has been marketed perfectly and your customers are ready. The product goes live and its a huge hit. Order after order comes pouring in. You look at your Paypal account after the first day and your product sales have generated a whopping $18K!

Then it happens. Because you have made so much money so quickly it quickly sets off an internal security alert at Paypal. Just like that, one of their managers has frozen your account. Now you have to spend time (which is money) and energy to justify the accumulation of those funds. In the mean time you can no longer take payments on your website so you are out a payment processor. And it can take days and sometimes weeks waiting for Paypal to do their review of your case and investigation for fraud. This can be a serious pain, especially if you have an army of affiliates waiting to get paid because they helped you promote your product! I'm not saying not to use Paypal at all, I'm just saying have other options as well.

Another top Payment Gateway -

Authorize.Net -

Since 1996, Authorize.Net has been a leading provider of payment gateway services, managing the submission of payment transactions to the processing networks on behalf of merchant customers.

The Authorize.Net Payment Gateway provides merchants with fast, reliable and secure passage for transaction data via a 128-bit Secure Sockets Layer (SSL) Internet Protocol (IP) connection, and manage the complex routing of payment information to the appropriate credit card companies securing an approved or denied result in an average of three seconds!

The Authorize.Net Payment Gateway is available to merchants seven days a week, 24 hours a day. The payment gateway offers many features and options that can be tailored to specific merchant business models.

Although Authorize.Net has been around longer than PayPal, and does an excellent job in providing solutions for taking online payments, Authorize.Net still plays the traditional roll of payment gateway however, so be aware that you cannot purchase payment gateway services directly from the Authorize.Net website. They do not provide their own merchant account services. 

Complex Shopping Carts -

Like I said above, if you want your customers to be able to browse your site and pick and choose multiple items and add them to a shopping cart system then you need a merchant account, a payment gateway PLUS shopping cart software.

A shopping cart is essentially software installed on your site ( Licensed Software Shopping cart) that gives your site the ability to perform shopping cart functions or ( Hosted Software Shopping Cart) provided by an ASP or Application Service Provider also known as a "third party provider".

The software allows online shopping customers to place items in the cart, and upon checkout the software typically calculates a total for the order, including shipping and handling (i.e. postage and packing) charges and the associated taxes, as applicable. Data (products, categories, discounts, orders, customers, etc.) is normally stored in a database and accessed in real time by the software.

There are a number of excellent shopping cart solutions but the top hosted shopping cart systems I have found to be are

One Shopping Cart

and GoDaddy's Shopping Cart System

Again, Paypal has their own shopping cart system you can use but if you don't want to use them the two companies above provide excellent service.

Also, if you are selling (or going to sell) digital products there are companies that specialize in digital product sales with great service, pricing and support.

http://www.paydotcom.com

http://www.clickbank.com

http://www.2checkout.com