E-commerce is bustling and online shopping is becoming ever more popular. Not only has online shopping growing in terms of value, but it is also slowly but surely, taking over a significant chunk of the total retail sales share from brick and mortar stores. Experts estimate that online shopping will continue to grow steadily at the cost of physical shopping. In the present scenario, it would be foolhardy for any retail business to not have an online presence and e-commerce portal for their products and services.
Being e-commerce ready implies being able to accept payments from customers via the internet. This is possible through a number of different methods, the most common being an internet merchant account. An internet merchant account enables a retailer to accept credit card payments online through the electronic submission of a purchase form, along with credit card data including credit card number, purchases information and other security related information.
Merchant accounts can be obtained both offshore and domestically. It may be as simple as going to your local bank where your business has a bank account, filling in an application and obtaining a merchant account. The merchant account provider will provide a payment gateway software which acts as the user interface when a customer initiates an online purchase. In many cases, a merchant may be forced to go offshore in search of a suitable merchant account, especially if the retailer's business is classified as high-risk, as is done in many cases by domestic banks, which primarily favor low-risk businesses to partner with. Once a merchant account is obtained and set up on the retailer's website, the merchant can start their e-commerce business.
In many cases, particularly if the business is high risk (as mentioned above) or does not have a sufficient track record in the e-commerce industry, it will be difficult to obtain a merchant account directly. In such a situation, the merchant will be well advised to obtain the services of a merchant account provider. These middlemen are specialists in providing merchant account services, and have relationships in place with several banks both domestic and offshore, and will help a merchant obtain and setup a merchant account both quickly and conveniently, especially if an offshore merchant account is required.
While on the one hand, the internet opens up vast possibilities for a merchant to expand their sales, it also adds risk in the form of credit card fraud, leading to chargebacks. Internet merchant accounts involve the transmission of sensitive credit card information through a number of layers, which as secure as they may be, are not foolproof. There is a significantly high rate of incidence of credit card fraud which has led to the growth of alternate payment systems (APS), which include third party credit card processors such as Paypal, online cheque processing and ‘Bill me later'. All these alternate payment processing systems focus on bypassing the transmission of credit card information over the internet for purchases. Furthermore, these systems focus on eliminating the exchange of credit card information between the seller and the buyer. Third party processors like Paypal tend to be more expensive than internet merchant accounts and offer little protection to sellers, particularly those that sell intangible goods such as software, music, etc. In case of Bill me later, a customer is sent a periodic invoice, much like a credit card statement, for which payment has to be made directly to Bill me Later. Other alternate payment systems are also mushrooming, such as the Western Union Speedway, in which the customer initiates a wire payment online and then submits a payment to Western Union, making it either very low cost or even free in some cases, to the merchant.
While the alternatives to internet merchant accounts are not foolproof, they are sometimes preferred by customers who are weary of security features offered by the retailer's website. Hence, a retailer must ensure that the merchant account provider chosen for the website has the necessary security checks and features in place to prevent fraud to the maximum extent. In addition, the seller protection policy of the provider must be suitable for the specific needs of the merchant, to ensure that in case of fraudulent chargebacks, the retailer does not see significant losses.
Being e-commerce ready implies being able to accept payments from customers via the internet. This is possible through a number of different methods, the most common being an internet merchant account. An internet merchant account enables a retailer to accept credit card payments online through the electronic submission of a purchase form, along with credit card data including credit card number, purchases information and other security related information.
Merchant accounts can be obtained both offshore and domestically. It may be as simple as going to your local bank where your business has a bank account, filling in an application and obtaining a merchant account. The merchant account provider will provide a payment gateway software which acts as the user interface when a customer initiates an online purchase. In many cases, a merchant may be forced to go offshore in search of a suitable merchant account, especially if the retailer's business is classified as high-risk, as is done in many cases by domestic banks, which primarily favor low-risk businesses to partner with. Once a merchant account is obtained and set up on the retailer's website, the merchant can start their e-commerce business.
In many cases, particularly if the business is high risk (as mentioned above) or does not have a sufficient track record in the e-commerce industry, it will be difficult to obtain a merchant account directly. In such a situation, the merchant will be well advised to obtain the services of a merchant account provider. These middlemen are specialists in providing merchant account services, and have relationships in place with several banks both domestic and offshore, and will help a merchant obtain and setup a merchant account both quickly and conveniently, especially if an offshore merchant account is required.
While on the one hand, the internet opens up vast possibilities for a merchant to expand their sales, it also adds risk in the form of credit card fraud, leading to chargebacks. Internet merchant accounts involve the transmission of sensitive credit card information through a number of layers, which as secure as they may be, are not foolproof. There is a significantly high rate of incidence of credit card fraud which has led to the growth of alternate payment systems (APS), which include third party credit card processors such as Paypal, online cheque processing and ‘Bill me later'. All these alternate payment processing systems focus on bypassing the transmission of credit card information over the internet for purchases. Furthermore, these systems focus on eliminating the exchange of credit card information between the seller and the buyer. Third party processors like Paypal tend to be more expensive than internet merchant accounts and offer little protection to sellers, particularly those that sell intangible goods such as software, music, etc. In case of Bill me later, a customer is sent a periodic invoice, much like a credit card statement, for which payment has to be made directly to Bill me Later. Other alternate payment systems are also mushrooming, such as the Western Union Speedway, in which the customer initiates a wire payment online and then submits a payment to Western Union, making it either very low cost or even free in some cases, to the merchant.
While the alternatives to internet merchant accounts are not foolproof, they are sometimes preferred by customers who are weary of security features offered by the retailer's website. Hence, a retailer must ensure that the merchant account provider chosen for the website has the necessary security checks and features in place to prevent fraud to the maximum extent. In addition, the seller protection policy of the provider must be suitable for the specific needs of the merchant, to ensure that in case of fraudulent chargebacks, the retailer does not see significant losses.
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