If you’re a business owner that has yet to start selling goods or services online, you’ve probably heard all of the arguments in favor of ecommerce: that the internet is the world’s fastest-growing retail channel, that people of all ages are increasingly shopping online, and that people who shop online typically spend more – as much as 25% more – than in-store shoppers.
But even if you’re sold on the notion of ecommerce, there’s some legwork that must be done before you can get to selling via an online shop. Chief among those tasks is enabling payments with an ecommerce credit card processor. But for many businesses, the apparent complexities and volume of providers from which to choose makes selecting a provider for your ecommerce credit card processing needs a top challenge – even if you already have credit card processing up and running for a brick-and-mortar store.
While in-store purchases simply require a credit card terminal (and a Merchant Service Provider), online transactions require a secure way of transferring cardholder and transaction data from your ecommerce website to the payment network. The means of transferring is via a Payment Gateway, and signing on with such a provider is required for being able to accept online payments. A heightened need for security and technical skills can further add to the confusion many business owners experience when it comes to selecting an ecommerce credit card processor.
But these best practices can help you find the best ecommerce credit card processor for your business.
If the fact that processing credit cards online requires a separate Payment Gateway provider has you concerned you’ll end up paying more fees on every transaction, you might be right – but not necessarily. If your Merchant Service Provider, which allows you to process and receive money for credit and debit card transactions, doesn't offer Payment Gateway services then you’ll need to sign on with a separate company to manage that aspect of your ecommerce transactions. As stand-alone service providers, Payment Gateways typically charge a service fee for the software that facilitates transactions and sometimes charge setup fees. You'll also pay a fee for each online credit card transaction you process.
But the more providers you have to pay, the bigger bite you will take on your ecommerce strategy. Instead, you can maximize your ROI by looking for a Merchant Service Provider that also offers Payment Gateway services. Because an all-in-one provider is already gaining value from your business, they may not charge additional setup and monthly fees – meaning that as far as Payment Gateway services go, you’ll only be billed for any transactions you process.
When a customer shops with you online, not only are they putting their dollars behind your business, they’re also trusting you to protect their sensitive personal and financial data. As such, a data breach or other security issue can be especially ruinous: not only could you be liable for actual losses but the resulting loss of trust can deter future sales, and ultimately prove devastating. This makes security one of the most important considerations when it comes to selecting an ecommerce credit card processor.
As you evaluate the options, there are a number of things you should look for to determine whether a provider offers best-in-class security. For starters, seek out a provider that stores customer data as tokens. This means rather than storing information such as shipping addresses and credit card details in plain text formats – meaning hackers can easily find and read it – this sensitive data is replaced with a string of meaningless numbers and letters; the actual information can only be retrieved by the Payment Processor at the token vault. This differs – and is more secure – than encryption, because rather than converting the data into a code (which can be cracked by anyone with the key), it is removed altogether and replaced by the token, with limited opportunities for decoding.
To find a provider that meets the highest industry standards for security, look for one that is Level 1 PCI DSS compliant. This means they adhere to rigid requirements to protect cardholder data, including being subject to annual independent audits that have been verified by the credit card brands in order to reveal any unaddressed weaknesses or vulnerabilities. You can check whether an ecommerce credit card processor is compliant by searching for their name at the Visa Global Registry of Service Providers.
If you don’t have strong technical skills or an in-house developer, then connecting the various parts required to deploy ecommerce might seem like your biggest challenge. But it doesn’t have to be, if your credit card processor makes the setup process easy for you. Look for a processor that works with a broad list of shopping cart platforms, so that you can select the one that best meets all your needs as a retailer, rather than the one that’s merely compatible with your payment provider. And as ease of setup can vary, seek out a processor you can integrate with just a few clicks.
Have you set up an e-commerce shop yet? Based on your experience, what’s the number one best practice newcomers should know? Share your tip in the comments.