One of the principal concerns of any business is to increase the sales of its goods and services. An essential part of making those sales is providing your customers with the means of making payment for the goods and services they buy.
The following briefly explains how to arrange for your customers to be able to make credit and debit card payments online – thereby increasing your potential for sales and business profits.
The principles of setting up card payments online are very similar to those for setting up card payments through a physical point of sale terminal (say, in a shop, restaurant or any other business premises) – each uses slightly different technology.
Although a common perception might be that card payments – through a physical terminal or online – have become almost universal, the fact is that an estimated two-thirds of Britain’s small and medium sized enterprises do not accept this method of payment, according to a report on the Real Business website recently.
Such a failure to provide customers with the method of payment they want – since one third of customers who are unable to pay by card simply decline to make the purchase – amounts to lost revenues of an estimated £10 billion.
One of the reasons for businesses apparently being so slow in providing customers with methods of payment they prefer is the perceived cost of installing and maintaining contracts for the use of physical terminals and online payment gateways.
Given the potential for considerably increased sales as a result of accepting card payments, however, the costs are probably overestimated.
Besides, this might be precisely the kind of one-off business expenditure for which a finance loan may be perfectly suitable. Business loans from Everline do just that –sums of anywhere between a few thousand and up to £50,000 may be borrowed over the relatively short term of a few months up to 24 months. The ease and speed with which such borrowing may be set up through an online application may make this an ideal source of funding for your card payment installation.
Terminals come in different types, depending on the business requirement and may be fixed countertop, such as for use in a shop, or portable, often used in restaurants.
Because the security of payments and of course the cardholders personal details is so important, you might want to ensure that any terminal you install meets the current Payment Card Industry (PCI) Date Security Standards (DSS).
The ongoing cost of running such a terminal depends on the type of machine you choose and the number of customers who use it. The cost is made up of a contract with the supplier, a charge for each transaction made, and insurance protection for the terminal.
In order to accept card payments online there is of course no access to any such physical terminal.
Instead there is something called a payment gateway which acts as a service provider for the authorisation of card payments. The gateway effectively takes the place online of the physical terminal you might find at a retail point of sale and provides the same degree of security for protecting cardholders’ information and for the details of the transaction to pass from the customer to the business and from the business to a designated payment processor (the third party agent appointed by the business to handle card transactions).
With the aid of technology, the following bewildering series of steps allows your customer to make a card payment online for the purchase of your goods and services:
- the customer signifies the purchase by clicking on a button on your webpage labelled “Purchase” (or something similar);
- the customer’s web browser encrypts his or her transaction before the details are passed to your webserver;
- you forward these transaction details – again encrypted – through your payment gateway and the payment gateway forwards it to your chosen payment processor (bank);
- the payment processor directs the transaction details to the relevant card association, such as MasterCard or Visa;
- the bank that issued the card receives a payment authorisation request and gives its response back to the payment processor, which forwards the answer to the payment gateway;
- the payment gateway is then able to authorise the purchase that has been made online.
Incredibly, this whole process takes little more than two or three seconds and then it is then over to you to fulfil the customer’s order. Once that is done, the final steps are taken to ensure that the funds authorised by the card issuer and payment processor are deposited into your bank account.
Trevor Wetherly lives near Birmingham and spends his weekends renovating a small cottage. He intends to retire there and enjoy the quiet life very soon.