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Accept credit cards on your website

When you first start up in business, one of the trickiest problems is finding an efficient, low-cost method for accepting credit cards. You could accept cheques as payment, if you are only selling nationally, but as nearly all online shoppers use credit or debit cards, you are likely to lose many sales.

The choice is usually between having your own merchant account or using a third party solution such as PayPal, Stripe, Nochex, Apple Pay or Google Pay.

Merchant accounts usually have high annual and monthly fees with relatively low transaction fees. Third-party providers often do not charge annual or monthly fees but have high transaction charges. Merchant accounts look more professional and probably retain more sales because there are fewer steps the customer has to take when paying for your products or services. When starting out, some small and home-based businesses may find that running a merchant account is too expensive so they opt for a third-party solution.

PayPal has some of the highest fees and encourages people to use their PayPal account for payment so finding where to use your credit or debit card can be quite tricky.

If you use Nochex you will need to make sure that the account is used regularly otherwise Nochex will suspend your account without notice or warning and charge you a £20 dormant account fee — again, without warning or notification. For more details, and other people's comments, please have a look at my Nochex Problem learning blog.

If your are seeking to expand your business beyond the hobby or part time level, it is probably best to get a merchant account through a company such as WorldPay. If the costs still seem too much, you can often get reductions by joining a relevant trade association.

PayPal also do their own merchant account in the form of 'Website Payments Pro'.

Getting connected

Once you have set up your merchant or third-party account, you will need to connect your products to the payment processor. Many providers will give you the code which, when pasted into your web site, will display a button for each item that you are selling. The following is an example which you can click to donate £1 to the running of this web site:

The problem with this approach is that your customers will have to go through the payment process for every item they buy — which is fine if most of your customers only make one purchase in a single visit, but is a real disincentive for multiple purchases.

The answer to this is to use shopping cart software. You can buy this software, but I started by using PayPal's shopping cart. Later on I wrote my own shopping cart software to give greater flexibility and imported the total amount spent into a standard payment button.

Stripe has two methods of collecting payments: server-side and client-side. The server-side method allows you to connect with your own shopping basket software but you need to be an expert and have administrator access to your server. You can bring in a consultant to do this for you or, for an additional transaction fee, you can use a third party provider like CommencePayments. The client-side method (Stripe Checkout) gives you the button code for each product that you are selling.

Apple and Google Pay are quite dificult to set up but Stripe Checkout includes these options

All this assumes that you already have your own web site. If you don't, there are many suppliers who will provide one for you — SiteSell Build-it is one supplier who provides a complete solution — but it is possible to trade on the Internet without having your own web page!

One of the ways if doing this is through Amazon using their Marketplace facilities. The cost per sale is high, but they handle all the credit card processing and you get your products advertised on Amazon. You can sell books and other items on Amazon on a fee-per-sale basis, but you will need to pay a monthly fee if you want to upload in bulk, download reports or create a new catalogue listing. It is also worth paying the monthly fee if you sell more than one item per day because the selling fee is reduced for 'Pro Merchants'.

Sign up for PayPal and start accepting credit card payments instantly.