Creditcard Orders

I want to sell products on my web site by accepting credit card orders-- what do I need to know?

On one level, this is simple. You just need to add an online ordering system to your web site and make some arrangements for credit card processing and order fulfilment.
The purchaser will make their order on your online form, and you will receive the order, process the transaction, and fulfil the order by sending the products

However, there are a number of issues to resolve.

Online credit card transactions
There are two ways in which you can accept credit cards on your site.

a) Using Your Own Merchant Account.
You will need to set up a Merchant Account with your bank, and tell them you intend to accept online transactions. They will charge an annual fee for the account plus either a flat monthly fee or a percentage per transaction per month (typically 8%).
They will also have requirements about the transaction information and systems used on your site. They will require certain policies to be stated on the site, particular information to be provided on the orders page, and for the order form or shopping cart to be held on a secure server which encrypts transaction information)

b) Through a Third Party Merchant/Payment gateway.
There are numerous companies around that will accept credit cards payments on your behalf in exchange for various fees and percentages. These are also known as "payment gateways".  New Zealand based examples include PayPal, World Pay, Flo2Cash, eWay, PayMex....  Once a month, or whenever your account reaches a certain level (by negotiation) they will make a payment into your back account.

Manual processing vs real time processing
Some banks will make it possible for you to do manual processing of credit card transactions. This will require that you use a virtual terminal (or EFTPOS terminal) to check whether the credit card number is valid, record all details on a voucher {electronic, or perhaps paper]   and send /deliver the vouchers to the bank for them to process. After processing, the sales fees minus transaction fees are banked into your account.

This method has been widely used for many years, but recent industry changes to Payment Card Industry Data Security Standard requirements are making it less viable, and banks are increasingly requiring that realtime processing methods are used.  .

Most banks prefer real time processing of credit card transactions.  In this case, once the order is placed, the transaction checking and payment processing is done in realtime via the bank's own secure payment gateway or another authorised gateway.

The credit card is checked and authorised (or declined) almost instantly, and the money (sales fee minus transaction fees) is deposited into your account immediately. At the same time, a record is made of this online for you to check.  BNZ Buyline, and National Bank Pay Station are examples of bank payment gateways.

  • There are a number of authorised payment gateways which are acceptable to the major banks -- such as DPS Payment Express.  You will  need  to check with your bank as to which real time processing systems they will  allow you to use on your web site

Establishing a merchant account can be costly, certainly more costly than using a third party payment gateway which generally has very low establishment costs.

Per-transaction fees paid to third party merchants are generally higher than those paid to your merchant account gateway. For this reason, many people begin with a third party merchant arrangement until they have "tested the water" regarding level of sales for their product. Most third part y merchants will also charge a small monthly administration fee.

Order form vs shopping cart
If you have a small number of products, with no variations (in size/volume, colour etc) then a straightforward shopping form will be enough. If you have more than 10 products, and have variations within these products, a shopping cart system is easier for purchasers to use.
Either way, the transaction information will be processed according to your decisions regarding payement gateways and manual vs realtime processing.

If you will be doing manual processing, the order form or shopping card needs to be placed on a secure server, with transaction output encrypted during transmission.

In general, the order information (products ordered, purchaser, delivery address and so on) will be delivered to you by email, but also stored on your web site for downloading to an offline database when you are ready. The transaction information (credit card details) will be stored on the secure server until the order has been fulfilled, then it will be deleted (to comply with the Privacy Act).

Some web hosting accounts include access to a secure server and shopping cart at no additional cost.  Some web hosting accounts will require additional fees for access to a secure server and a shopping cart.

New Zealand Time @ 02:04 23 Jun 2021
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