Please note that manual credit card processing is no longer an option for most small businesses.
Online Payments - Choosing the Best Option
When you ask your customers to pay online the method you choose can be the difference between making the sale, or not. And the right payment processing option can determine whether processing your orders is efficient, painful, or simply not viable.
The most popular options are Internet banking and credit cards.
If you are short on time, see the end of this guide for a brief summary
Internet BankingAll the major banks now offer online banking and this allows people to make payments directly to your nominated bank account. All you need to do is give customers your bank account number - usually on your web site.
Payments are typically processed over night so you will usually see the funds in your account the next day. Internet banking is less efficient for processing payments than credit cards.
There's a misconception that it's not safe to show your bank account number on your web site. This is not true - the only thing people can do with just your bank account number is deposit money.
Credit Card OptionsIf you have a credit history with your bank you can usually get a credit card merchant account, which allows you to accept credit card payments using mail order forms, an EFTPOS machine or even an old Zip-Zap credit card machine.
Payment GatewaysTo maximize efficiency you can use a real time payment gateway such as www.paystation.co.nz, which processes (accepts or declines) credit card payments immediately. When an order comes through from your online shopping cart you know it's already been paid for.
While this incurs additional set up and monthly fees, it can save you a lot of time and money if your order volumes are high enough.
Manual ProcessingMost banks won't tell you that you can process credit card payments from your web site manually (using mail order forms) because they prefer to have everything automated.
If your order volumes are low this can be a good option, especially if the average value of your orders is high. With low volumes and low average order value (less than $50) commissions are high (up to 8.9%). With higher average order values (over $250) the bank's commission is lower (about 6.2%).
Manual processing can also be a good option if you have a retail store with an EFTPOS machine, and if you want to use your EFTPOS machine to process payments.
Having your own merchant account means when customers pay you the name of your business shows on their credit card statement, so there's no confusion about where they shopped.
Shopping Cart vs One Off PaymentsOnce you've chosen the right payment processing option you can process credit card payments. Now you need somewhere on your web site that your customers can visit to shop, or to initiate a payment.
An online shopping cart allows customers to browse through your web site and add the products they want to buy to their shopping cart. When they've selected all the products they want to buy they visit the checkout and enter their details and credit card number to pay.
If you don't have a lot of products to choose from, or if you want your customers to pay invoices online, consider a one off payment system.
There are also many options in between. For example, you can accept orders and payments for subscriptions like this: http://www.goodgovernancepublications.com/subscribe.php