Online Payment Options
If you are starting a business online, you will need to find a method for making and accepting payments that is trustworthy, secure, and widely recognized. You have several options, each with their own advantages and disadvantages. Here are five of the best:
The process of accepting credit and debit cards online requires getting formal merchant status from each credit card company that you wish to accept in your business. Discover, Mastercard, American Express, and Visa each require a separate application for a merchant account. Depending on the company’s evaluation of your business, you may be asked to put down a security deposit or even turned down. Once you’re successful, however, the bank will walk you through accepting payments on your website, and you’ll make a great deal of customers happy.
PayPal is one of the most popular choices when it comes to paying for things online without plastic. All it takes is a free account using an existing email address, and you have the ability to send and receive money to other PayPal accounts. It is widely used and trusted. However, it requires that both parties have a PayPal account, and there is a small fee for each transaction. If you want to move money from your account online into a bank account, you will incur further fees. These are generally small enough to warrant the convenience of online transfers, but it pays to be aware of them.
3. Google Checkout
One of Google’s millions of services is one similar to Paypal. It allows for transactions, refunds, and a “Bill Me Later” option that many customers enjoy. Offering this option in tandem with Paypal gives consumers that many more options.
4. Western Union
Tried and true, Western Union is probably a thing more of your parents’ generation than yours—they still sent telegrams until 2006. While it also offers online transaction services, it is better known for its physical offices. To send money, one party goes to a Western Union office, which are found everywhere in all but the least developed countries, and fills out paperwork to release funds to a specific recipient at another location. This lacks the convenience and speed of online transactions, but may be more palatable for technophobes and negates the risk of compromised internet accounts. The fees for transactions are slightly higher than those for PayPal.
5. More International Options
If your business is going global, the above services may charge drastically higher fees or be unavailable entirely (PayPal is notorious for not permitting accounts in some countries). For small transactions, credit cards are generally fine. For larger ones (especially over $500 or so), wire transfers through banks are often more cost-effective despite the extra paperwork they require. If your customers are paying with a foreign currency, look into conversion services like Tempus Consulting, Custom House, and Associated Foreign Exchange.
Always emphasize security and fast results, and be open to new companies. Providing your customers with a variety of options is always the best tactic, as different people are more familiar and therefore comfortable with particular services. As more and more transactions occur online, your business will benefit by giving your clients different ways to pay you.