The With.Us Blog

Learning how to accept payments online may seem daunting and it was for me at first too. Lots of people don’t know where to start or what their options are. Without a lot of technical or financial jargon, here’s how it works and what kind of options are available.

Two Ways to Accept Payment

• Accept credit cards similar to how physical stores take payment (merchant account and payment gateway) – For this option you need a merchant account and a payment gateway. You can think of a merchant account like a bank account that allows you to accept credit card payments whether it’s Visa, MasterCard or another card type. The payment gateway is what allows you to securely send credit card information to your merchant account provider, so you don’t have to worry about someone stealing your customer’s information. Usually at some set time of each day, all money owed to you minus any refunds you issue are put directly into your bank account. Merchant accounts and payment gateway services may be purchased together or separately.

• Accept credit card and member to member payments (PayPal and Google Checkout) – PayPal is, by far, the biggest provider of this service. In second is Google Checkout which came out in 2006. During the checkout process on your store, your customer is prompted to log into their PayPal or Google Checkout account to pay you. You then receive payment in your PayPal or Google Checkout account. To get your money into your bank account, you would log into your PayPal or Google Checkout account and transfer your funds.

Note: Although PayPal is best known for member to member payments, they now also offer full payment gateway services. More on this later.

Considerations When Selecting a Merchant Account Provider and Payment Gateway

If you do a search for these terms, you will undoubtedly come across many companies. It’s up to you choose which one works best for you. Here are some considerations:

• Fees – The 4 major fees are a one-time setup fee, a monthly fee, a discount rate (a percentage of your sale amount) and a per transaction fee. If you have high revenues (around $5000 or $10,000 per month), ask if you get a volume discount. There is a lot of competition for your business, so don’t be afraid to use that fact as leverage to help you get a good rate. Do your research and let a company know what other rates you were offered. As your sales increase, you can also ask for a volume discount in the future.

• Your Location – Make sure the one you choose works for your geographic location. Some providers will only help companies in their own country.

• Currency – Make sure you can be paid out in the currency of your choice. Regardless of what country your customer is from, their payment will automatically be converted into your currency. Your customer will be charged in their own currency at the going exchange rate.

• You already have a merchant account – If you already have a merchant account, make sure the payment gateway you select works with your merchant account.

• You have an adult site – If your business involves legal adult products, you may find you are rejected by a lot of companies. You may have to find a provider that specifically accepts applicants with adult themed web stores.

On your behalf With.Us has negotiated much lower rates through an Authorize.net reseller via Millenium Bankcard so all setup fees are waived ($450 approx. value). A link to the specially priced fees will be posted to our members after we launch our website.

All About PayPal

PayPal has been around since 1998. They have impressive credentials with 164 million accounts worldwide in 190 markets and in 17 currencies as of 2008. The reason they became so popular is because 1) it only take a couple of minutes to get a basic personal account, 2) it’s a great way to protect your identity when making payments online and 3) it’s unusual not to be approved.

There are 2 types of PayPal processing depending on what kind of account you have:

• PayPal Standard with a Personal Account – This option lets you accept payments from another PayPal member account. You can also accept credit cards in a somewhat lengthy process for your customers. If you really want to accept credit cards, it’s better to get PayPal’s Website Payments Pro account or another Merchant Account/Payment Gateway. Just think that the more steps you make for checkout, the more likely you’ll lose your sale. Note that it’s a great idea to pair PayPal with other credit card processing options. The more options people have to pay you, the better you can make more sales.

• PayPal Business Account with PayPal Website Payments Pro – PayPal is also now a payment gateway. Their regular service sounds similar to this, but there are actually a lot of practical differences that make transactions smoother for customers paying by credit card. You must have a Business Account with PayPal and then sign up for Website Payments Pro.

The Difference Between PayPal Standard and Website Payments Pro

There are 4 main differences between PayPal Standard and Website Payments Pro:

• Fees – Paypal Standard is a good way to start as it’s cheaper, but once you start getting a lot of sales, it’s cheaper to switch to Website Payments Pro. Here are your fee options.

• Amount of time to checkout – The checkout flow for PayPal Standard is a lot longer. You have to enter your contact info twice: once for your web hosting company and once for PayPal. Anything that makes the checkout process longer increases the chance you’ll lose the sale.

• Real time processing – PayPal Standard is not guaranteed to be done in real time. Instead, you and your customer have to wait until confirmation is received from PayPal (e.g. via email or by logging into your PayPal account). Website Payments Pro tells your customer right on your website if the charge was approved or declined.

• Checkout flow – PayPal Standard requires that your customer is taken away from your website and to paypal.com to make the sale. Then, the customer is taken back to your site. The Website Payments Pro process is entirely done on your website.

Note that Website Payments Pro has 2 parts to it: 1) credit card processing in real time and 2) a way to pay from your PayPal account that’s similar to PayPal Standard but in real time.

Which Payment Processor Should I Choose?

If you don’t want to spend much, PayPal Standard is a good option and then as you get more revenues, you can set up Website Payments Pro or Authorize.net (via Millenium Bankcard). We are longtime partners for both companies. When it comes to customer support, note that PayPal only provides online support (usually a response within 24 hours) but Millenium Bankcard has phone support.

You can sign up for PayPal here. The Millenium Bankcard special rate will only be available once our web builder is launched.

-Emily Hirai