Collecting Customer Payments: How to Prepare Your eCommerce
Attracting more business to your eCommerce store is only a small part of a bigger job.
The other part is to ensure the best payment experience at checkout— which has to do with how a customer pays and places their order.
For many shoppers, the priority is to confirm;
- Whether your store accepts the type(S) of cards you take
- The Security & Fraud protection measure you take to protect consumer data
- The process of making payment in your store
Past experiences have proven you’re likely to convert prospects to buyers if you meet them at all points of need. Failure to satisfy any of the above requirements may lead to cart abandonment.
So how do you set up secure payments in your web-only store?
The ABCs of Setting up Online payments
To collect customer payments in a web-only store, the entrepreneur has to acquire a merchant account and a payment processing gateway.
What’s a Payment gateway?
A payment gateway is the tech that enables a website to process card payments online. Here’s how it operates:
- Every time a customer types their card data on your website, it is sent to the gateway.
- On arrival, it is forwarded to an acquiring company—which does the processing.
- The acquiring firm, again, forwards the data to the right card network, i.e., American Express, MasterCard, or Visa).
- The card brand then channels the payment process to the issuing bank—which counterchecks the validity of the given account details and the availability of sufficient funds.
- The bank then gives a verdict (accepts or rejects) the card brand, which sends the judgment to the payment gateway via the acquirer
- Eventually, the decision reaches the ecommerce store
All these happen in the back-end in seconds, so the customer doesn’t have to wait all day.
Why Do You Need a Merchant Account?
Remember, a gateway only processes transactions, collecting payments, on the other hand, remains a merchant’s job.
And to take payments online, a business must open a merchant account. It is the account that receives all the payments made to your ecommerce.
As soon as a gateway processes a transaction to completion, the money goes to your merchant account. However, this is only a temporary reservoir to hold processed funds before you transfer them to a business bank account.
Lastly, not all businesses get the same merchant account. While most companies qualify for a low-risk type, the few who are considered risky must use a high-risk merchant account.
Unlike low-risk transactions, high-risk processing is more regulated, expensive, and difficult to find.
Traditional lenders will turn you down, so you want to hammer out a deal with modern account providers to get the cheapest merchant services.
Author Bio:- Payment industry guru Taylor Cole is a passionate payments expert who exposes entrepreneurs to the cheapest merchant services. He also writes non-fiction, on subjects ranging from personal finance to stocks to cryptopay. He enjoys eating pie on his backyard porch, as should all right-thinking people.