One of the best ways to grow your online business is by accepting credit cards and payments online. You get to draw in a huge percentage of online shoppers that prefer shopping online using credit cards. However, before you start accepting credit cards, you need to set it up the right way. Otherwise, you could end up losing money to scammers. To help you out, here are 4 financial tips for accepting credit cards as an online business.
1. Choose the right card processor
There are lots of card processors in the market, and the one you go for, should be determined by the nature of your business. That’s because, the card processing needs of an eCommerce website may differ from those of an online business that is primarily focused on mobile (smartphones). Besides the nature of your business, other factors you should consider when choosing a card processor are fees, security, and the currencies that the processor accepts. These are factors that if overlooked, could harm your online business. For context, if a card processor doesn’t have strong security measures, you could end up losing money through chargebacks. You can learn more about choosing the right card processors on JJS Global.
2. Choose the right pricing model
Besides the installation fees, you need to understand the different pricing models available at your disposal, and go for one that best favors your business needs. There are several models that you can choose for your business. The first one is the transaction fee model. Under this model, you pay a fee for every transaction that goes through. The other more common one is the service fee model. These are charged monthly or annually, depending on the agreement you have with your payment processor. The last one is the incidental fee model, where fees are triggered by certain occurrences in your business. For instance, the fees can be triggered by chargeback. When choosing a pricing model, don’t just go for the cheapest, but rather the one that best serves your business needs.
3. Get the right payment gateway
For you to sell your products online using credit cards, you need a payment gateway. This is a technology that your selected payment processor can set up for you. Some of the key factors to consider before you settle for one include costs and efficiency. You also need to be keen on the terms and conditions of your card processor, especially if you already accept cards in your brick-and-mortar store. Some payment processors don’t allow their customers to have multiple payment gateways.
4. Read the card processor contract keenly
Reading the contract doesn’t just relate to the payment gateway and related restrictions. It can also protect you from an account freeze for many other reasons. Some of these include the length of the contact, and the amount limits. For instance, some contracts lock you up to one processor for years. If you unknowingly sign up for such a contract, it could mess you up, especially when cheaper options come up.