28 Aug Is it worth accepting credit cards in your online store?
If you are a small business owner, is it worth your while to accept credit cards in your store, should you just accept direct bank transfers and PayPal e-cheques?
Options for accepting credit cards in your online store
- Using a payment service – like PayPal or Paymate
- Using a specialist payment gateway service with a merchant bank account – there are many specialist providers in Australia for these
- Using an all-in-one merchant bank account and gateway service – all of Australia’s main banks have their own combined merchant and gateway service
Using a Payment Service
Using a specialist gateway service with a merchant bank account
- Your merchant account – at your bank or financial institution. This is a special type of trading bank account expressly for accepting funds from credit card transactions. Money that transfers in or out of this account are reflected in your business’ real bank account. There are merchant accounts that are specifically for use in electronic funds transfer at point of sale (EFTPOS) transactions in stores, and Internet Merchant Accounts for processing online transactions.
- Your payment gateway – at a specialised provider or via your financial institution. A payment gateway is simply the software that sits between the merchant account where the money ends up and shopping cart that actually facilitates the transfer of funds between the buyer’s credit card and seller’s gateway account. In practice what payment gateways do is accumulate a balance of funds from a day’s worth of transactions and then transfer the day’s total balance at set times on set days of the week. The number of days a week that gateways transfer funds varies from 5 to 7, so it pays to shop around. Some of the specialist payment gateways in Australia include eWAY for real time transactions or e-path for offline transactions
- A complete payment and gateway solution – each of the banks and some of the leading financial institutions provide their own end-to-end complete payment gateway and merchant solution. NAB call their system NAB Transact, ANZ call theirs eGate, Commonwealth Bank call theirs CommWeb, Bendigo Bank call theirs Bendigo Website Payments, Westpac call their system Payway, Suncorp call theirs Suncorp Virtual POS. 2Checkout from the USA also support Australian, Canadian, European, and many more merchants and offer an end-to-end package.
- Gateway fees and pricing structure (gateways and merchants have different percentage charging rates and different up-front or annual fees)
- Convenience (how long are you prepared to wait for money to be transferred into your bank account? do you want one provider or multiple ones to deal with? do you want your bank to be both your merchant and gateway provider?)
- Flat rate per transaction
- Flat rate per transaction with monthly minimum
- Annual fees, fixed number of free transactions, per transaction fee after that
- Monthly fee, fixed number of free transactions, per transaction fee after that
- Flat Rate monthly fee