If you want to start an online business (or expand your existing one), then you need to understand payment processing. Payment processing is how e-commerce sites actually take money from customers, and there are several different ways that can happen. The most common types of payment processing include:
Credit Card Processing
Accepting credit card payments at your online store can be a convenient and easy way to get money from customers.
Virtual Terminal Transactions – Using the virtual terminal, you can process credit card transactions by manually typing in customer credit card numbers. Most virtual terminals support processing with most major credit cards, including Visa, MasterCard and American Express. Authorize.net is an example of a Virtual Terminal service.
Chargebacks – Chargebacks occur when a customer disputes a credit card transaction with their bank after receiving a product or service from the merchant. This is bad because you lose both the initial transaction fee and the product. To prevent chargebacks, you must ensure that you have a solid fraud prevention policy in place before accepting payments from customers.
PayPal – PayPal is an online payment system that provides an easy way to accept money from customers and allows them to pay without sharing their credit card or bank account information. You can simply add a button on your website allowing users to click and purchase whatever item they want. The money is then sent to you through PayPal. There are currently over 100 million active PayPal accounts in 190 countries worldwide.
PayPal is one of the most popular online payment solutions.
Cash on Delivery – Accepting cash on delivery can be a great option for selling products in certain areas, especially when dealing with small transactions in remote areas where using other payment solutions may not be possible. It’s important to select a cash on delivery option that also offers fraud protection, as it can significantly increase your chances of being paid and implementing a solid tracking solution is key in preventing losses.
PayMate is a great example of a payment service provider with built-in fraud protection for businesses selling products on a cash-on-delivery basis.
PayMate is an example of Cash on Delivery payment processing with built in fraud protection.
Cash Advance – This type of payment works by receiving money directly from your customers instead of waiting for the transaction to be processed through their bank accounts, private lenders or credit card companies. It’s one of the fastest ways to get money for your business, but it also carries one of the highest risk levels.
Cash Advance processing offers quick funding for businesses with high-risk credit. For more information on Cash Advance versus Credit Card Processing, click here .
Settlement – Settlement is simply receiving payment from a customer after they have made a purchase and then the transaction has been completed.
Settlement is simply receiving payment from a customer after purchasing an item .
Money Transfer – This type of payment occurs when you use a service like Western Union or Money Gram to transfer money directly to your bank account. These services are meant for transferring large sums of money overseas, but also work for small business transactions.