Trading Online - Which Payment Gateway?

How can you do what millions of traders are doing online? That is, simply accept a card payment from your customer?

The procedures involved in accepting payment by credit and debit card are a major cause for confusion for business owners and managers. You need to get money from your customer's plastic into your business account. You have goods to sell, the customer wants them. You need to see payment before you can release the goods. The customer has funds but is not there in front of you so cannot simply hand over the cash.

The easiest way to take payments online is to use a payment gateway. The payment gateway is software which checks the card holder with the card issuer and tells the merchant it is safe to complete the transaction. Or not.

Even if you already have a merchant account for payments over the counter, the way that payments are authenticated online or by telephone is different. The customer is not there to enter their pin number into a terminal. In case the card has been forged or stolen, the card issuing authority needs to be sure the person using the card it has issued is the person it issued the card to.

The best known merchant account providers include Barclays ePDQ (not to be confused with Barclaycard, which issue Visa cards), HSBC Merchant Services (not to be confused with HSBC Card Services, which issues Mastercard cards) and Streamline, a part of the RBS Group. Each of the major merchant account providers will also provide a gateway upon request, there are other providers such as Paypal and Google Checkout whose merchant account and payment gateway are combined and there are still more payment gateway providers who specialise in gateways and do not offer a merchant account. So which should you choose and why?

Each of the merchant account providers has a gateway which works with its own merchant account. So why no just use theirs?

1. Examine closely first. See exactly what they will be charging you for the merchant account alone, compared with if you also use their gateway. Then see what a specialist gateway supplier would charge for that element.

2. Most pre-built shopping cart software including all of the better known ones have readily available plug-ins for the better of the specialist payment gateways without further charge. The bespoke ecommerce designers are used to working with them, too. The gateway software dedicated to a single merchant account is often difficult to configure to work with many ecommerce solutions and are therefore costly to implement.

3. The best of the gateway solutions already work well with all of the merchant accounts available in the UK. They are proven in terms of both ease of configuration and security.

Why reinvent the wheel and go through the pains of doing so?

Our favourite combination is Zen Cart with ProtX and whichever major merchant account provider you choose.

Unless you have a combination of plentiful resources and a very good reason for doing so, do not attempt to develop your own software and do the job in-house. Firstly, you will have to satisfy your insurers and your merchant account provider you can securely manage the credit card details you will be required to collect and keep. Insurance premiums and transaction fees are each likely to rise sharply. It is not an easy job, so your software developer will charge accordingly. If ever your database is compromised, that could well threaten the continued existence of your business. This not dramatising the possibilities. It is a fact.

The Stop Watch Web team have many years of supplying ecommerce solutions and advice to small and medium sized enterprises.