Electronic payment processing is a must for any up and coming small business owner. Today’s ecommerce business’s viability is directly related to its ability to stay on top of technological trends. Almost every business accepts online payments. Because of this, any new small business that wants to be successful needs to as well.
Do the Research
To accept electronic payments, a business must have a merchant account as well as a payment gateway. When looking for a company to do business with, it is important to spend some quality time doing the research. Every company has a different set of fees associated with service. Don’t be fooled into thinking the lowest fee is the best. Often times, these budget merchant accounts give out budget service. Look for reputable companies with good track records.
Encrypt the Transmission
An added cost associated with electronic payment processing is encryption. Almost all credit card companies, as well as the merchant account companies, require the transmission of sensitive financial information to be encrypted. This is an added expense that requires a business owner to purchase a security certificate, which has to be installed on the web hosting server to encrypt and protect the transmission of credit card information during the payment process. These fees can range from 50-300 dollars annually depending on the business owner’s needs.
The Dangers of Reoccurring Billing
A lot of small business owners may need to establish reoccurring, or monthly, billing for their customers. This can make the electronic payment processing system a bit more complicated, and it can narrow down the field of available merchant account vendors that can be used. The business owner must decide if they are going to store the sensitive data themselves, or if a third party will. Often times, storing financial data can be so technical and expensive, that it is much cheaper to have a third party do it. A lot of merchant account and payment gateway companies can and do store financial information for reoccurring billing for a small fee.
Regardless of the reason, electronic payment processing is a necessary step for an up and coming small business. Just be sure to pay close attention to all the details of any agreements you accept. It’s also a good idea to look for and ask for any and all documentation, governing fees and rates to include penalties and charge backs.