Payment for Online Sales

Online payment processing is how people pay over the Internet for the goods and services they buy from your website. The steps to set this up are:

1. Get a merchant account from a bank.

   • If you already have a merchant account, you may not need to set up another one.

2. Use a service that will process the credit card or other method of payment.

   • Your bank probably has a payment gateway they prefer to work with and they will help you get started.
   • Alternatively, you can select a payment gateway other than the one used by your bank.

3. Get the payment gateway to work through your website.

The payment gateways used by most Canadian banks are:

• Beanstream
• Chase Paymentech
• Desjardins
• Global Payments Canada
• Moneris

Do your research and decide on the best options for your type of business and budget.

How difficult is it to implement online payment processing on my website?

If you already have a website to show your products, adding online payment should be simple to do. Once you have a mechanism in place for handling online payment, add a "buy" button to your product or order page. The button must be an application or a link. This sounds difficult to do, but the payment gateways have done most of the work for you. They will provide you with the program or code you need to get the service to work on your page. All you need to do is fit this into the correct part of your Web page code. If you are using a Web page design program, you only need to place the button where you want it on the page and have the button point to the payment gateway.

If you are having problems setting this up, your payment gateway should have a help desk or FAQ to give you some support. Alternatively, your Web designer or developer should know how to work with a payment gateway.

How do I receive payment through the Web?

Getting paid across the Internet is not much harder than being paid in your store. When the required information is entered by the customer on the "Buy" page(s), the payment happens at the payment gateway.

You need to make a decision about what happens on the "back end" of the transaction. When your customer presses the "Buy" button, there are two possible ways the transaction can take place:

1. You can send the customer to the payment gateway, or

2. You can collect the customer's payment information and send it to the payment gateway.

Transferring the customer to the payment gateway

This is the option that works best for most small businesses. The customer is redirected to the payment gateway. You tell the payment gateway how much the customer needs to pay. The security for the transaction is handled entirely by the payment gateway. Once the transaction is done, the customer is sent back to your website. You will receive notification, usually by email, that the transaction was successful and the order can be completed.

A minor down side to transferring the customer lies in the shopping experience. Most payment gateways have customization options for the payment screen. You can have your logo on the screen, and the colours on the page can match the ones you chose for your business. The payment gateway might even offer a template for the transaction page that you can use to build your online store around. Your customers might still be able to see that they are not on your website anymore, preventing them from having a seamless shopping experience.

Collecting the transaction information

If you find that you do a lot of online business, or if you have invested heavily in your website design, you might find it better to keep as much of the transaction on your own website as possible. When the customer presses the "Buy" button you take him to a secure Web page where you collect the billing and shipping information. Behind the scenes, you send that information over an encrypted connection to the payment gateway, which approves or declines the transaction. Your customer never leaves your website, giving you complete control over his shopping experience.

This is the more expensive and difficult option because:

• You will need to get a digital certificate to create the secure Web page.
• You are responsible for all of the information you collect, meaning you have to conform to the PCI Digital Security Standard (PCI DSS).
• You will need anti-virus software and a firewall for your computer(s).
• You will need to train employees to handle customer information.
• You need to show proof that you are conforming to PCI DSS. If you do not, you can be fined or even lose the ability to accept credit card transactions.

Can I offer methods of payment other than credit cards?

Many online payment gateways process transactions in which debit cards, gift cards or prepaid credit cards are used. Prepaid cards are like normal credit cards, but have reduced risk since payments are taken from a balance the credit card holds.

Some people do not want to use any kind of electronic payment. Services such as PayPal or Shopify can help them. These services will take more traditional forms of payment, such as a cheque or money order, to create an online balance. The service will pay the merchant, on behalf of the customer, up to the limit of the available balance.

How can I prevent chargebacks?

Chargebacks happen when there is a problem with a credit card transaction. The bank will debit your merchant credit card account for the amount of the error. Chargebacks occur most often when a buyer contested the charges on their credit card. Chargebacks can happen with real-world transactions, but because there is no face-to-face transaction on the Internet, banks are more likely to issue a chargeback against online retailers. Each bank has its own system for disputing chargebacks, but in general, you will need to prove every step of the sales process.

To avoid chargebacks and reduce online fraud:

• find out the steps your payment service uses to reduce fraud
• document every stage of the sale and keep the records
• talk to a real person when dealing with suspicious orders, such as those to foreign countries, to PO boxes, and for orders over a certain value. If at all possible, call the customer to verify the purchase
• consider using a shipper that can provide you with a signature for proof of delivery
• find out if your payment service provider offers fraud protection.

E-commerce has been around long enough that most of the kinks have been ironed out of the process. Do your research. Find the options that will work best for you and you will have a safe and prosperous experience online.

• Payment Card Industry Security Standards Council
  
  https://www.pcisecuritystandards.org/index.shtml
  The PCI Data Security Standard (PCI DSS) must be followed by anyone that handles credit card information. If you do not follow the PCI DSS you could be fined and not be able to accept credit cards as payment.