Being able to process real time credit card transactions directly through your Web site is critical for business success in cyberspace. Not being ‘E-commerce capable’ means that you shut the door on a growing pool of customers, giving up significant amounts of potential revenue.
What You Need
In order to process credit cards online, your business will have to open an Internet merchant account with either a bank or an Independent Sales Organization (ISO). Having a merchant account allows businesses to accept credit card payments in return for the purchase of goods and services. The merchant account provider processes the credit card transaction and deposits the funds in the vendor’s bank account. It draws revenue for its service by charging the merchant a combination of user fees and per transaction commissions.
In addition to a merchant account, your online business requires the services of a payment gateway and a shopping cart solution. A payment gateway authenticates an online buyer or seller by serving as a bridge between the merchant’s storefront and the financial institutions that authorize the transactions. Because of the highly sensitive nature of the information being passed, the gateway must be secured with SSL (Secure Socket Layer) technology. On the front-end, a shopping cart is required. A shopping cart is simply a web-based software application that provides customers with a way to select and organize the products and services they wish to purchase. Once the customer has finished selecting what it wants to purchase, the shopping cart catalogs the items, calculates taxes and fees, collects the credit card information and initiates the transaction process by sending the request from the Web site through to the payment processing system on the billing provider’s backend.
For many small and medium-sized enterprises (SME), the costs and business requirements of setting up a merchant account and building an E-commerce enabled Web site may prove to be prohibitive. Transaction fees, E-commerce software and Web hosting costs can all add up to quite a large expense for budget conscious SMEs that are constrained by more limited resources.
For example, setting up a merchant account is a significant expense. Firstly, vendors are required to pay monthly fees when setting up a merchant account. This usually falls in the $25 range but can vary depending on whether you meet the minimum monthly transaction volume. A merchant account can cost your business between $0.20 and $1.00 per transaction and charge back fees are an additional expense that can be charged by the bank to cover contested charges.
Depending on the size of your operation, there are also software and equipment costs to consider. E-commerce software may be required and businesses will have to pay the licensing fees required to run it. Higher-end Web hosting packages will be needed to run the E-commerce applications, raising that expense on a monthly basis.
The services required of an E-commerce-enabled site can be obtained through a variety of sources including Web hosting companies, financial institutions, Internet service providers or E-commerce consultants. Often the vendor will have to deal with more than one organization, raising the total overhead required to implement E-commerce capabilities. In order to streamline costs, what SMEs really need is a “total” E-commerce solution. That is to say an entire E-commerce solution from a single vendor.
Enter the billing solution provider.
Billing solution providers supply online payment processing solutions for businesses that do not have separate merchant accounts set up, but still want to conduct E-commerce and sell products and services through their Web sites. In fact, what the billing solution provider does is take over the entire online payment process for the merchant. It takes all the orders, processes all the financial transactions and remits payment to the merchant’s bank account. By outsourcing a billing solution provider, the vendor reduces its costs to one set fee for all its transactions. And there is literally no other overhead. All the vendor has to do is integrate a link on their Web site that connects the customer from the merchant’s site to the billing solution provider’s backend. The billing provider takes care of the rest.
Billing solution providers are an excellent option for SMEs selling one or two products. But they can also handle billing for vendors who have numerous products for sale. Billing solution providers give their customers the option of having a shopping cart solution, allowing customers to choose from a catalogue of products and services, placing them in the cart and then paying for them together at the checkout. Most providers can even take over the billing requirements for payments that come in the form of recurring subscriptions.
In many countries, credit cards are not widely used and this can be a problem for online merchants who have a significant number of international clients. Billing solution providers not only help businesses process credit card transactions, they can also accommodate various types of payment methods further enhancing an SME’s E-commerce presence. For example, many billing solution providers are able to process cards other than Visa and Mastercard, such as Discover and American Express. In order to help vendors serve customers who do not have credit cards, billing solution providers are able to process payments in the form of electronic checks, digital wallets, electronic cash, debit cards and even direct transfers between bank accounts. Some billing solution providers such as PayPal even conduct E-commerce transactions in more than one foreign currency.
In short, the billing solution provider is truly a “total solution.” It literally takes over the entire online payment process for the vendor and does it at an extremely affordable rate.
Saves Money and Resources Going with a billing solution provider can be a significantly cheaper and more efficient way to take care of all your E-commerce needs. The billing solution provider takes care of everything and your business is charged with one set of fees, helping keep your costs lower and more predictable.
Easy to Implement No scripting or complex programming is required. Often only a simple link on your web site that takes the customer to the billing solution provider’s backend is required.
Reputation and Confidence Outsourcing to a well-known provider can allay any fears customers may have about reputation and security. Customers are very familiar with some of the bigger names like PayPal or VeriSign. Placing their names on your Web site helps build consumer confidence.
Experience and Professionalism Outsourcing your E-commerce needs entrusts these tasks to industry professionals that are experienced and reputable. They are veterans of the industry and staffed with well-trained personnel. This translates into secure, trustworthy and efficient payment processing transactions.
Allocation of Resources Not only does a billing solution provider allow you to save money on your E-commerce requirements, it allows SMEs to allocate more resources to other important business tasks such as sales and marketing.
Fraud Detection Being experts in secure payment transactions, billing solution providers are experienced with fraud detection another important factor helping online businesses build consumer confidence.
Scalability - Billing solution providers have the resources and capacity to expand or shrink your E-commerce capabilities in accordance with your business requirements.