Opening an e-commerce store will require you to familiarize yourself with several payment processes or sales funnel. Most current and future e-commerce entrepreneurs find it difficult to understand the basics and complexities of credit card processing. This is crucial to the success of any business.
If you are one of those people who have an online business, then you will need to provide various modes of payment to your customers, especially credit card payments. It’s one of the factors that you need to consider aside from social media marketing and other online marketing methods. The reason behind this is very simple. Most people nowadays prefer paying online rather going to a brick and mortar store.
Nowadays, convenience is what most people are looking for when shopping. Here are some of the most popular payment processes that you can choose from:
- Merchant Accounts
A merchant account enables any type of e-commerce or online businesses to accept gift cards, credit cards, debit cards and other modes of payment cards online. In order to avail this type of account, an online business needs to get in touch with a local merchant bank or any merchant service provider. The processes required to apply for a merchant account varies depending on the guidelines set by the provider.
The processing for a merchant account can take only a few minutes or several days depending on the type of merchant account that you will need. Fees and rates also vary. You can contact your local merchant bank or get in touch with a merchant service provider for more information.
- Payment Gateways
A payment gateway’s main function is to serve as an intermediary between the merchant bank and the e-commerce website that has an affiliation with a merchant account. The merchant bank also has ties with a large network of banks that issue credit cards. Also, a payment gateway has another function that makes it stand out.
Payment gateways are known for their safety and security since they make use of an advanced SSL 128-bit encoding technology. This makes it easier to encrypt and decrypt all the information being sent through the gateway. When processing payments, it is important to prioritize safety and security. Without proper encryption, all the data would be vulnerable to theft and other illegal activities.
- Third Party Processors
Due to the increasing number of online shoppers in the past few years, the demand for online payment processors has also increased. However, fraudulent online transactions have been rampant in the past years. This growing problem makes most banks hesitant when it comes to granting accounts to online merchants. Capitalizing on the issue, third party processors have emerged. Their main function is to provide services specialized to e-commerce websites.
An e-commerce seller would be able to get third party processors through third party merchant accounts. There are lots of benefits that third party processors can offer. One benefit is that they are global unlike traditional banks as they only provide services locally.
In addition, third party processors charge lower rates compared to banks. The reason behind this is that most third party processors have affiliations with multiple banks, allowing them to obtain lower rates for a wide array of online merchants.
These are just some of the things that you need to know about the different payment processors. This is very important if you want to keep your small business going. If you are looking to improve your sales funnel, making use of these three types of payment processors can help you.