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22 Replies Last post: Jan 9, 2009 11:49 AM by candi58

What does it take to Use/Process Credit Cards Online

Apr 11, 2008 9:20 AM

TopdawgBernie 5 posts since
Apr 11, 2008

Hello folks.
Just joined this forum today. I am starting a new business that will offer services on a subscription basis with monthly automatic renewals. We would like to be able to accept Visa, MC and AMEX. How do I go about having this ability of accepting, processing, etc Credit cards for payments.

Sorry to ask this extremely basic question. But I see discussions here on costs, straight-pass through stuff etc. So, I know I am in the right spot to ask these questions. Thank you all in advance.
TopdawgBernie.

Tags: credit-card, processing Report as inappropriate

IAmSpartacus 20 posts since
Mar 28, 2008

1. Re: What does it take to Use/Process Credit Cards Online Apr 11, 2008 9:29 AM

Hello Bernie,

This can be done many different ways and depends on several factors. The easiest way to get started would be to sign up for a paypal account and use its products and services. You can check out the following link for more details:

https://www.paypal.com/cgi-bin/webscr?cmd
=_home-merchant&nav=2

There are other options that vary greatly in terms of technical complexity, but it really depends on the structure of your web site. Feel free to email me with any further questions.

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TopdawgBernie 5 posts since
Apr 11, 2008

2. Re: What does it take to Use/Process Credit Cards Online Apr 11, 2008 9:51 AM

in response to: IAmSpartacus

Thank you. Spartacus!

Offline, I learnt, and was recommended, that I use authorize.net. So, I signed up for their services. $0.35/transaction, 2.19% of each transaction $ amount as their per transaction fees. In additon there are monthly fees for ARB, CIM, etc. Now, I am told that I need to get merchant services provider and this is the part that confuses me. I need to pay yet again per transaction to someone else?

So, a $10 credit charge will net me a even less than $0.35+ $0.219 per transaction that I thought I'd be owing Authorize.net?

Thanks again.

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nMoncrief 47 posts since
Mar 24, 2008

3. Re: What does it take to Use/Process Credit Cards Online Apr 11, 2008 10:10 AM

in response to: TopdawgBernie

Bernie,

A credit card transaction processed over the Internet requires at least 2 parties. One is the gateway provider, in your case Authorize.net. The gateway receives the information from your shopping cart, secures it via SSL, and passes it on to the processor. The processor works with an acquiring bank who issues an authorization number. There's more to it, but this will do for now.

In most cases, you can get better rates by contacting the processor directly, not by going through Authorize.net. In my experiences, merchants who contact Authorize.net pay higher item fees and higher discount rates than necessary. In your case, $.35 is high for the total transaction. And if they still have to add the processor's fee, it's ridiculous. If you want to contact me, click by profile for my information, and I'll be happy to give you a rate quote that will save you money. Or, you can go to www.creekfinancial.com/quote. Good luck in your business!

Neil Moncrief
Creek Financial Services

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IAmSpartacus 20 posts since
Mar 28, 2008

4. Re: What does it take to Use/Process Credit Cards Online Apr 11, 2008 10:14 AM

in response to: TopdawgBernie

Yes, that's one of the reasons I recommended PayPal. In order to accept credit cards, you typically set up a merchant account with your bank and a provider like Transaction Solutions. They will then lease you credit card machines and other software tools to manually process credit cards.

However, if all you're going to be doing is accepting online payments then PayPal is quick and easy to get set up without the extra hassle and charges. The transaction fee depends on monthly sales (i.e. starts at 2.9% + $0.30 and goes down as low as 1.9%) and the money goes straight into your PayPal account so you don't need a merchant accunt - just a PayPal business account.

If you want to take payments offline, then they have an additional service for $30 per month.

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LUCKIEST 7,932 posts since
Aug 6, 2007

5. Re: What does it take to Use/Process Credit Cards Online Apr 11, 2008 10:19 AM

Welcome to this web site.
Do you know about SCORE. SCORE is FREE and can help you
with develop a Business and Marketing Plan.
Good luck, LUCKIEST

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designer 329 posts since
Feb 28, 2008

6. Re: What does it take to Use/Process Credit Cards Online Apr 11, 2008 10:29 AM

Hi! I can vouch for Paypal. I had it for several years on Ebay and my Web site and love it! As a buyer/seller, it's the way to go!!!

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nMoncrief 47 posts since
Mar 24, 2008

7. Re: What does it take to Use/Process Credit Cards Online Apr 11, 2008 10:29 AM

Bernie,

You'll hear a lot of people talk about PayPal in the forum. It's great if you only plan to sell a few items per month because it's fast to set. However, if you plan to run a serious e-commerce business, you need to consider the disadvantages of PP also.

1) PP costs more. The fees are high.
2) PP takes their fees out of each transaction before they pay you. (This was a huge drawback to me during the 7 years I managed my own e-commerce biz.) If you sell something for $100, you'll see a deposit to your checking account for $98 + change. It makes it virtually impossible to balance your checkbook.
3) When you customer is ready to buy and they trust you enough to give you their CC number, it doesn't look as good if you re-direct them to PP and ask them to give the CC info to PP instead. A serious e-commerce business should have their own SSL certificate and accept CC numbers using their own secure gateway. This is my opinion, but I think it's valid.

PP does have advantages in certain situations. For more on this topic, read this post I made to this forum: http://smallbusinessonlinecommunity.banko
famerica.com/docs/DOC-1865

Neil Moncrief
Creek Financial Services

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TopdawgBernie 5 posts since
Apr 11, 2008

8. Re: What does it take to Use/Process Credit Cards Online Apr 11, 2008 10:46 AM

Thank you all so much.

So, I do have a Gateway ID from Authorize.net. Your comments about Paypal were made by my friends who too thought that my business needed to look more "professsiona'" and thus the recommendation against PP.

I will look in to the other possibilities suggested as well. Thank you once again. Very helpful indeed.

'Bernie

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MnlyTechnlgy 98 posts since
Feb 27, 2008

9. Re: What does it take to Use/Process Credit Cards Online Apr 11, 2008 10:57 AM

TopdawgBernie: Welcome to the forum! We found that PayPal is the most cost-effective and reliable service to use, especially if you do not have a "storefront" which will accommodate foot traffic. We looked into using Merchant services through Quickbooks, which I use as my accounting program, but it was not as cost effective as using PayPal and didn't offer the guarantee that PayPal did/does.

Hope this helps.

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DomainDiva 1,731 posts since
Oct 10, 2007

10. Re: What does it take to Use/Process Credit Cards Online Apr 11, 2008 11:44 AM

in response to: nMoncrief

I am in the process of designing how our users will purchase their airframe, engine, gear & APU inventories from our website. (Phase 2 yayyyy). We were planning on using PayPal, if you are better I would like you to 'toot your horn' and give me some insight.

The way I wanted the check out to happen can't because of the way PP conducts their transactions.

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xenopod 109 posts since
Dec 28, 2007

11. Re: What does it take to Use/Process Credit Cards Online Apr 11, 2008 11:47 AM

in response to: DomainDiva

Would Google's Checkout be any better for your needs? Did you look into that at all?

When we setup ecommerce sites we have customers sign up with this company: http://www.cdgcommerce.com/

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MnlyTechnlgy 98 posts since
Feb 27, 2008

12. Re: What does it take to Use/Process Credit Cards Online Apr 11, 2008 11:53 AM

in response to: DomainDiva

DomainDiva: I'm not entirely sure what you are asking but we have found that by using PayPal for a payment solution, you can integrate the payment portion into your own website seamlessly plus, if anything happens with a transaction they will work to resolve it for you. It is a good guarantee. If you have an actual storefront where you cater to a lot of foot traffic as well as web traffic, using a Merchant solution would probably be a better resource because you will need to actually swipe credit cards that are presented for payment.

I'm no expert - but I do know what has worked for us, being that we are among the "under 5 employees" business category. The majority of our business is carried out over the internet and it is convenient for people to go to PayPal and pay for their services there.

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nMoncrief 47 posts since
Mar 24, 2008

13. Re: What does it take to Use/Process Credit Cards Online Apr 11, 2008 11:55 AM

in response to: DomainDiva

DomainDiva,

Please call me at 866-587-8618 so we can speak offline. I can offer you processing that will save you a fortune over PP and make you appear MUCH more professional to your clients. I currently handle the processing for MANY very large e-commerce busineses (all with annual sales in the multi-millions), and none of them use PP except to give their customers an additional option. I'd like to get some details before giving you a custom quote.

Neil Moncrief
www.CreekFinancial.com

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MnlyTechnlgy 98 posts since
Feb 27, 2008

14. Re: What does it take to Use/Process Credit Cards Online Apr 11, 2008 4:44 PM

in response to: xenopod

xenopod: Thanks for the link. I will check into this as an additional option for our eCommerce clients. We actually looked at quite a few options and have stayed with PayPal for the time being, but as we all know, nothing is rarely written in stone.

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