How to choose a payment provider for your online shop?

If you’re selling your products online, one of the big decisions you’ll need to make is what payment methods you will choose to offer in your store.

There are two broad things you need to choose from: offline payments (through bank transfers) and online credit card payments (through third party payment providers like PayPal or payment gateway providers like Camtech, Payway or eWAY). You will need to make sure that your shopping cart supports these providers as well, because not all carts support the breadth of Australian payment gateway solutions.

There’s no reason that you can’t use both offline payments and online payments to increase the chances of customers wanting to buy from you. Offline payments via bank transfer put the order through the checkout of your shopping cart solution, and then set the payment to pending in your order history.

The customer is advised of the order going through and shown the bank transfer details so they can make the payment.

Once the payment is made you update your order in your store admin to paid and send out the goods.

Other offline payment methods include things like store pickup, purchase order, and layby payment. Layby payments are an interesting option that may be quite relevant to your customers in the present economy if your products are suited to laybys. BPAY, Laybys in Australia are typically 8 weeks in length, but it depends on the product and your firm’s conditions. If you use layby you put the details of your layby offer, you put the details into your store admin and the cart displays the payments required and the schedule to the customer. Like a bank transfer you need to collect those payments manually outside of the unless you create a product in your store called “layby payment” that your customers can “order” via credit card or bank transfer as they make their payments.

Accepting credit card payments

If you want to accept credit card payments through your store, here are some of your main considerations:

• Security – credit card security is not only good business practice but it’s a mandatory requirement of Visa, MasterCard, Amex and the rest of the card payment industry. There are a set of security standards which cover your business processes and server technology called PCI DSS which you must comply with if you’re accepting credit cards. Make sure your cart doesn’t prevent you from meeting these requirements which are strict and require external security auditing of your website’s web server every quarter.
• Ease of money collection – when the payments are made, where they physically go and how long they take to get there is also going to be an important consideration. This one is covered in detail below.
• Easy interface – to meet security requirements customers are redirected to the payment gateway to make the payment. Some of these allow you to add your logo and may even allow you to set the colours of the page so that you can maintain an even more consistent experience as you make the payment.
• Fees – banks and third party providers charge fees. How much they are can depend on your transaction volume and it could be worth your while shopping around.

How are payments collected?

You have two basic options for credit card providers in your online shop:

• Third party payment solutions like PayPal or Paymate
• Payment Gateway/Bank combinations like eGate (MIGS), Camtech, Payway, eWAY etc

The main difference between these besides their fee structure is the way money is collected. Third party payment providers like PayPal collect the money from customers and hold it at their end in a holding account with a balance. If you want to access that money, you can either make a payment using that same service (i.e. buy something else with PayPal) or transfer that money to your bank account in Australia.

Transfers to your bank account can take from days to weeks depending on the payment service, so it’s not an instant service. If you are using the money collected to pay postage at Australia Post for example does not accept PayPal as a payment method for Express satchels so you need to fund that out of your cash balance.

The alternative is a bank/payment gateway provider setup. This works as follows:

• You set up an “Internet Merchant Account” at your bank. You might already have Eftpos facilities at your bank, so this process will be straightforward as you’ll be able to extend the account. Note that the bank will usually want to see your site and check the security of it before issuing your account.
• You set up a “Payment Gateway” account at either your bank or a third party provider. The gateway is the website where customers actually type in their credit card details. Banks provide these services and so do third parties, with different fees, so it’s worth your while shopping around. When setting up your Internet Merchant Account, your bank will usually ask you what payment gateway you are using and if you don’t know will try to sell you theirs, so it’s worth deciding roughly which direction you will go before making the call.

Bank/financial institution gateway solutions supported by Ozcart include:

• ANZ – eGate
• Westpac – Payway
• Bendigo – MIGS
• NAB – Transact
• Commonwealth – CommWeb
• Suncorp – MIGS

Third party gateway solutions include:

• Camtech (Note: Camtech offer a special deal for Ozcart customers)
• eWAY
• Windcave (previously DPS (Payment Express))
• SC Net iPayBy
• E-path (for manual/offline payment processing)
• St George Hosted Payment Pages
• and more

Banks and gateway services will generally charge you both a percentage fee and a flat rate access fee for your merchant account or gateway account, and some will include a percentage of free transactions, so it pays to shop around.

Ozcart websites include us setting up one payment and shipping method in your site for free. You’ll still need to sign up an account and do the paperwork, but once you’ve done that we can set it up for you in the cart. We’ll ask you for what we need to do that for you. If you need help completing questions for your payment gateway application then talk to us as well, as we can assist you to answer Bank security questions with regards to the setup and configuration of your store.

What information will banks and gateways require?

Banks will generally require that they see your website in order to approve your merchant application. That’s because they will want to check:

• Your policies – terms and conditions, presence of a returns policy
• Checkout security – they will want to see that your checkout has the “padlock” on it (SSL encryption) to protect customer data
• Presence of your business name and ABN on the site

Your payment gateway will usually ask you which bank you are using as part of the application process and may do some checking as well. It will vary from provider to provider, so if you’re unsure what is needed remember to ask before you commit your business.