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Profitable
Home Based Business Tips - Accepting Credit Cards And
Other Payment Options.
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Maximize
Your Sales by Offering a Number of Payment Options...
If you’re serious about
maximizing your sales, you’ve got to think about
offering other online payment methods, including:
-
PayPal,
which has improved its service -- making it even
easier for your customers to use, and
-
Debit cards,
which are poised to become the online fundraising
vehicle of the future.
Plus, it’s still
important to provide traditional offline payment
techniques such as 1-800 numbers,
and order forms that can be printed
out and faxed or mailed.
It’s all about
giving your customers choices -- and about capturing
every sale you can. Web-based businesses that
don’t offer payment alternatives to credit cards
are shutting out millions of consumers who either
don’t own credit cards or are nervous about using
them online.
According to a study
by CyberSource
Corp., web sites providing four or more payment
methods other than credit cards have a sales
conversion rate that is 12% higher than those
offering just one payment option in addition to
credit cards.
Capture
85% more sales by accepting credit cards online
The simple truth is
that you must accept credit cards on your web site
if you expect to stay in business. It’s been
repeatedly proven that if you do NOT accept credit
cards on your site, you will capture only about 15%
of your potential sales.
Continued
below.....
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Continued...
You have to make it easy
for visitors to your web site to buy your products.
Internet users expect instant access to
information, goods, or services, and online customers
can be very impatient.
If dial-up users have to
log off of the Internet to clear up the phone line in
order to call in their order, you can forget about doing
a large volume of sales. This is too much work for most
of your customers, who would be far more likely to find
one of your competitors that accepts credit cards
online.
Accepting credit cards
will also...
-
Give your business a
degree of credibility,
-
Allow you to capture
the sales of impulse buyers, and
-
Provide you with a
fully-automated payment and tracking system.
But before you can start
accepting credit cards at your web site, there are two
important things you’ll have to do:
At this point you may be
thinking, "How I am I going to do this? I don’t
even know what secure servers or merchant accounts
are!" Don’t worry -- the concepts are really
simple. With just a little effort and patience, you’ll
soon be accepting credit card payments on your web site
and reaping huge rewards.
1) Online
ordering via a secure server
For your site to be as
professional as your customers expect it to be, it must
feature a secure server that protects your customers’
confidential information and gives them the confidence
to safely enter their credit card numbers.
A secure server is simply
a computer server that can accept and transmit
confidential information such as credit card numbers
without the risk of someone intercepting the
transmission and "stealing" the information.
The data is kept secure through encryption, which only
the oldest web browsers don’t support.
You can find out more
about secure servers by contacting merchant account
providers, which is the next step in getting your site
ready to accept credit card payments.
2) Setting up
your merchant account
You have a few different
options when getting a merchant account. You can...
- Get your own
merchant credit card accounts with a local bank
If you have a good relationship with your bank --
and they don’t require a large security deposit --
it’s best to get your merchant credit card
accounts through them.
You may, however, have to go through two different
banks to process the major cards -- Visa,
MasterCard, American Express, and Discover
-- because some banks deal with only two out of the
four.
Another problem with local banks is that they often
charge a very high "discount rate" or
require a very large security deposit (between
$5,000 and $10,000).
For those of you who don’t know what a discount
rate is, it’s not really a "discount" at
all! It’s the percentage you pay on each
transaction for the privilege of using credit card
services, and it varies according to your credit
rating, business history, and the amount of business
your site is doing.
For example, if you have a discount rate of 2.5% and
you make a credit card sale for $100, you’ll only
receive $97.50. The remaining $2.50 goes to the
credit card company.
- Get merchant
credit card accounts through a broker
Getting your merchant credit card accounts
through a broker is my personal preference for a
number of reasons:
| a) |
They are
web-based specialists in getting credit card
accounts for online businesses, and, as
should be expected, you can apply over the
Internet.
|
| b) |
They have a
higher approval rate than banks and should
be able to get you a discount rate of 2% to
3% -- even if you’ve been bankrupt.
|
| c) |
They are
affordable and can often have you accepting
credit card payments on your web site in as
little as 48 hours. |
Finding a broker is not difficult. Besides searching
online, you can find plenty of brokers in the back
of DM (Direct Mail) magazine. But do some research,
and make sure that the broker you choose has a good
track record.
There are lots of shady operators out there, so be
careful of who you choose.
- Hire a
fulfillment house and use their credit card accounts
If your company is doing only a few thousand dollars
of business each month, a fulfillment house may be a
good option for you.
A fulfillment house is a company that will...
a) Take your orders through a 1-800 number with live
operators,
b) Process credit cards,
c) Provide some customer service,
d) Ship orders, and
e) Maintain your customer database.
These companies will also let you use their merchant
credit card accounts to process your orders for a
fee. The downside is that the fee is usually a 5%
discount rate instead of the 2% or 3% you would pay
if you had your own accounts.
Because of the high discount rate charged by
fulfillment houses, I’d recommend that once your
business grows larger, you get your own merchant
accounts and save some money.
A great place to find nearly 100 fulfillment houses
is is Yahoo!’s Fulfillment Services Directory. To
get there, just click on "Directory" at
Yahoo!'s homepage and then search for
"fulfillment houses."
- Use a
"third party" merchant account provider
Like fulfillment houses, companies such as iBill
let you use their merchant accounts. The upside of
third party providers is that they can get you up
and running quickly, set up your order forms, and
process your orders.
The downside is that they charge you a processing
fee of 11% to 15% of the selling price -- depending
on the volume of business you are doing.
While the discount rate offered by these companies
is substantially higher than the other options
I’ve been talking about, most do not require any
setup fees, software, or security deposits, which
make them a simple and convenient option for some.
In addition to iBill,
you could also check out:
a) CC
Bill,
b) Authorize.Net,
or
c) CyberSource.
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A Successful Home Based Business: |
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