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Learn how to set up a secure payment system for your online sales.

Payment for online sales

If you plan to sell your goods or services online, you will need to set up an online payment processing system. There are various systems available, and the one you choose will depend on your type of business and budget. The first step is to contact your bank to set up a merchant account. Next, you will need to choose a payment gateway, which is a service that processes the payments. Your bank might be able to suggest one. Once you select a payment gateway, you'll have to set it up to work from your website.

Adding online payment processing to your website

Once you have chosen the payment gateway best suited to your needs, add a “Buy” button to your product or order page. This button will point to an application. The provider you have selected to supply your payment gateway will provide you with the program or code required to get the service to work on your page. Get support from the payment gateway provider or from your website developer for help on incorporating this code into your web page code.

Receiving payment online

When your customer enters the information required to make a purchase, it must go to the payment gateway. You can choose to have the customer transferred directly there. In this case, the security for the transaction will be handled entirely by the payment gateway. Once the transaction is done, the customer is directed back to your website. You'll receive notification that the transaction was successful so that you can fill the order.

If you do a lot of business online, you may decide to keep the customer and the transaction on your own website. After clicking the "Buy" button, the customer is directed to a secure web page, still on your website, to enter all billing and shipping information. That information is sent over an encrypted connection to the payment gateway where the transaction is approved or declined. The customer never leaves your website.

If you choose this option, you will need to:

  • Obtain a digital certificate from a certificate authority to create the secure web page
  • Show proof that you conform to the Payment Card Industry Security Standard because you are responsible for all the information that you collect. If you do not, you can be fined or even lose the ability to accept credit card transactions.
  • Install anti-virus software and a firewall
  • Train employees on how to handle customer information

Take advantage of any available customization options for the payment screen, such as your logo or branding graphics and colour scheme. This will help your customers to have as seamless a shopping experience as possible. Your payment gateway might even offer a customizable template for the transaction page.

Methods of payment

Online payment gateways can process payments made by:

  • Credit card
  • Debit card
  • Gift card
  • Prepaid credit card

Prepaid cards are like normal credit cards, but you incur less risk since payments are taken from a balance held by the credit card.

If you have some customers who don't want to use electronic payments, you may wish to consider services that take cheques or money orders to create an online balance. These types of services will pay you, on behalf of the customer, up to the limit of the available balance.

Preventing chargebacks

A chargeback takes place when the bank debits your merchant account for the amount of any errors. This can happen if customers contest the charges on their credit cards. Although this might also occur at a brick-and-mortar location, banks are more likely to issue chargebacks against online retailers because the transactions are virtual. You should be prepared to prove every step of the sales process.

To avoid chargebacks and reduce online fraud:

  • Document each stage of every sale and keep all records.
  • Call customers to verify purchases, especially if you are suspicious. This is useful for orders from foreign countries, shipments to P.O. boxes and orders over a certain value.
  • Use a shipper that requires a signature for proof of delivery.
  • Use a payment service provider that offers fraud protection.

Do your research and ask around for references. Take the time to find the options that work best for your business. Make the online experience safe for both you and your customers.

Customer Service

Ease of payment is not the only component that leads to success in online sales. Paying attention to details is essential in providing good customer service. Encourage customers to return by making the online experience as smooth as possible.

Back Orders

Keep your website up to date to reflect items in stock. If you do get orders for products that are not in stock, you should have a policy on how to handle them.

  • Will you hold the entire order until all items are in stock, or ship the available items first?
  • Can the customer decide whether to receive a full or partial shipment?
  • Will one shipping charge cover all shipments, or will there be a separate charge for each part of the order?

Order Status

Let your customers track the shipment of their order by providing:

  • A shipment tracking number
  • A link to the shipper's web page where the customer can enter the tracking number
  • Email support to help track the order
  • A toll-free number the customer can use to find out the order status

Shipping Insurance

Protect yourself and your customers by taking out shipping insurance to cover loss, damage or delays. There are different types of insurance, so ensure you get the best kind for your business. The risks and costs will vary depending on the type of transport you use.

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