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Taking payments from your website
06 December 2010The pros and cons of the most popular methods of receiving payments directly from your website.
1. Enquiry/booking form
The simplest, quickest and lowest cost option - you can your website as a 'brochure' and have an online form to collect enquiries and registrations of interest. You will need to then follow up the client for further details and payment arrangements usually over the phone.
In addition to the form to collect info, you could also list payments methods such as: BPay code to pay into your credit card (check with your bank), direct deposits (ie you supply your bank account details) and cheque/money orders. Ideal for small business that don't need a full ecommerce function yet.
Advantages: easy and quick to set up (inexpensive) on most websites, simple to use and follow up, no payment fees or charges relating to the website.
Disadvantages: payments are not accepted online instantly – there is a manual procedure to follow up. This would be cumbersome for large companies with high online sales volume wanting to be more automated.
2. Third party payment system eg "PayPal"
The best option for most businesses starting an online shop. Making a payment from your website with this option requires the client to click a link which goes to a secure PayPal payment form. Payment processing, fraud protection and tools to accept payments are all included. Order is processed and payment goes to your PayPal account which you can then transfer to your own bank account at intervals suitable to you. Great for small to medium sized businesses or those wanting to try an online shop for the first time.
Paypal provides this service but make their money by charging 2.4% + 30 cents on each transaction (as at 7/4/06).
Its easy to set up. You would need to sign up online for a PayPal Business Account (this is free). This is simple and you need to provide details such as your contact details, email address, bank account details (for deposits) and specifying the types of payments you wish to receive.
Advantages: relatively easy and quick to set up on both basic brochure style websites and eShops. PayPal gives your website a true e-commerce web presence with shopping cart style web pages and it is a secure, safe and well respected brand. PayPal handles all the private data on their own secure server, so you do not have access to your customer's credit card number. Your customers do not have to have a PayPal account to use the service.
Disadvantages: Paypal takes a percentage of each sale (although they are providing a service so that is fair enough). This cost is usually lower than other payment methods however.
3. Credit card payment gateway
You will need a merchant bank account to accept credit cards (subject to approval from your bank) and an internet merchant account. This option is good for high volume sales.
The pricing and procedure will vary from bank to bank.
Ongoing fees include bank fees and charges, payment gateway (usually a yearly fee) and secure server certificate - SSL (yearly fee).
Advantages: for some industries this appears more professional than PayPal (or PayPal alone)
Disadvantages: can be costly so only justified with companies selling high volumes, this method can be more complicated to set up on your website so there would be additional costs involved with web development also.