Selecting payment options for the customers of your internet business will directly affect your revenues and your bottom line. Considerations for selecting options must include factors such as trust, reliability and cost. Payment options for online businesses at this stage of the game must include ecommerce credit card processing.

Ecommerce credit card processing in the internet economy is an important element in operating an online business. Online business owners that contract with a merchant account provider and ecommerce credit card processing service to meet their customer’s purchasing needs increase their potential for sales and sales revenues over those merchants who are not set up with the capacity for credit card transactions.

By incorporating ecommerce credit card processing into your company you will speed up the process of receiving money from sales purchases. Accepting payments by providing ecommerce credit card processing is a further shopping convenience for your customers. The result will be to put more funds from sales back into the company faster for production, expansion and inventory.

Some Factors to Consider when Shopping for an Ecommerce Merchant Account:

• Number of Transactions
• Average Transaction Amount
• Sales Volume per Month

Ecommerce credit card providers and merchant account providers are in the volume business. The higher the number of transactions and average transaction size; the lower the fixed monthly fees on your account will be. The lower the monthly fixed fees for you the less money out of your pocket each month. Where transaction fees are paid out of the proceeds of a sale you don’t pay them until the sale is made. You may have to start with higher fixed fees until your volume increases and then change plans to reflect the new sales volume and number of transactions.

If your business plans on using telemarketing as a contact system to enhance online sales; setting up an ecommerce credit card processing system has many advantages. Closing sales with customers is much easier when you can take payment immediately with a credit card. Up selling of customers is much easier as well because customers are usually much more open to up selling after they have made the initial decision to make a purchase from your company. With a very small amount of training sales staff personnel can increase your sales numbers and subsequently your revenues.

By adopting a ecommerce credit card processing system and contracting with a merchant account provider you will be encouraging your customers to make much faster purchasing decisions and will create an environment where higher per sale revenues are possible.

As they say you don’t get something for nothing and ecommerce credit card processing services are going to require an investment on your part. Not a huge investment but an investment none the less. It can seem intimidating with all the jargon and fees involved but you can navigate through it but be careful before you sign an agreement and be certain you fully understand the terms of the agreement. Now let’s talk about fees.

Factors in Choosing a Merchant Account Provider:

1. Set Up Fees
2. Monthly Service Fees
3. Chargeback Fees
4. Transaction Fees
5. Statement Fees

Set Up Fees

A merchant account provider may charge a set up fee to open an account and get your online business into their system. A merchant account provider sets up the financial relationship between your online business, a bank and an ecommerce credit card processing service. The merchant account provider enables ecommerce credit card processing as an option for customers who purchase from your online business.

Monthly Service Fees

In order to allow customers the option of paying for purchases with credit cards an ecommerce credit card processing system will need to be put in place. Once you start receiving money from purchases you’ll need a place to put it; the merchant account is where your money is deposited. The merchant account provider will service your merchant account and manage your ecommerce credit card processing. A minimum monthly fee will be charged for these services.

The merchant account provider will establish a merchant account where credits, refunds, fees and withdraws are transacted and recorded. After a sale is complete for a credit card transaction the funds from the sale will be deposited by the ecommerce credit card processing service into you merchant account.

Chargeback Fees

If a transaction is reversed for any reason such as a credit or refund a fee is charge for the reversal of the transaction. This type of charge doesn’t happen often for some online businesses except in the case of less than value exchanges where the customer returns product and exchanges it for less valued product. Many online businesses will give credit instead of refunds to avoid this chargeback fee.

Transaction Fee

Each time a customer makes a purchase with a credit card a fee is charge to your merchant account for that individual transaction and can vary for different merchant account providers. Each fee is small 10-30 cents each and is charge to the merchant for each transaction made with the ecommerce credit card processing service.

Volume Fees

Depending on your merchant account provider and the plans available to you the total volume of credit card transactions must equal a certain amount each month and if the volume drops below the set amount a volume fee is charged. Volume amounts are generally set when you open the merchant account in anticipation of transaction activity. If the volume falls below a certain amount on a consistent basis you might want to change your plan. Monthly fees are generally lower for high volume plans and higher for lower volume plans so be realistic in choosing a volume level. You may get a break on the monthly fee with a higher volume plan but if volume drops you will pay more with a volume fee instead.

Statement Fees

Ecommerce merchant providers will compile reports that reflect the data on daily, monthly and annual activities of your online business which can be used for budgeting, accounting and planning projects. A statement fee will be charged either monthly or annually for the merchant account provider to compile the reports reflecting the activity taken place within your merchant account.

The number of ecommerce credit card processing companies and merchant account providers has increased substantially with the ongoing development of ecommerce. Take you time and consult with your advisors if you are unsure about any agreement you are considering entering into with a company. It would be better to not commit at this time and make an informed decision then to regret it later.