Silent Business Partner?
The internet can open doors and allow your business to become a global force, but who really controls your bottom line?
Your Payment processor is just as much a part of your business plan as any other factor
Most business owners never really planned to have a silent partner when they envisioned their business model, let alone one that can control the day to day operations, cash flow and products sold. It's defiantly a relationship that you have no choice in taking on but you do have choices when it comes to who and why you pick this silent partner.
First things first - Processors will admit to your face that their industry is not the most ethical thing on the planet. If you've ever dealt with a processing solicitation call you've most likely picked up quickly that they are great at making promises and not so great at remembering to tell you the answers to the questions you didn't know to ask. (Please note that this is a fact for 90% of the cases and I'm sure you have great trust with your processing company).
Choices for taking your customers payments online fall into 3 categories
- Paypal
- Merchant account with a processor
- Bitcoin
Let's chat about a few pros and cons to the choices listed above.
Paypal - for those that love Paypal, they really love them, right up to the day that their accounts get frozen and it's discovered that your money will belong to them for up to 9 months with no options available to really speak to the mystery person/department that made this decision. Now this may never happen to you and you may go on for decades loving the Paypal. For other customers that have lived this with Paypal and been banned for life, you will lose their business. Additionally, paypal can be used without having an account with them if you wish, however a customer may only be able to use it as a guest a limited number of times until they are forced to create an account.
A few things have changed recently with Paypal as they attempt become more beneficial to the business owner. Their delay in funding into your bank account has been shortened and this will help with your cash flow when your business takes off.
Chargebacks on a Paypal account seem to be geared toward the purchaser and not so much toward the business so you'll want to make sure you keep records for your shipping proof or you may find that a consumer who is knowledgeable in "friendly fraud" has your wheels on their truck and the money from the purchase back in their account.
Processing with Paypal is different than processing via a bank. Your website will not be required to carry a security certificate if you only offer Paypal for an option. This is something you may want to consider since the Search Engines like Google are rolling site security into their 200+ factors for who will show up on the first page of a search query. The difference to the site crawlers is https vs. http. It may be worth investing 60 bucks for the year to get a security certificate even if you only use Paypal for processing.
Merchant Account - These accounts can be set up directly with your bank or credit union as well as "brokers" that work with several different banks. Be sure to read your contract carefully. These contracts can carry clauses that may have you asking permission from your bank to offer a certain type of product on your website. They can also place limitations and reserve clauses on your account. Merchant accounts require a payment gateway, the most well known is authorize.net. The payment gateway is a buffer between you and your customer and you and your bank. The gateway will process your transactions and make sure everyone gets their peice of your pie.
Merchant processing agents are very much like car salesmen before the introduction of the MSRP sticker and will not tend to blink an eye if you don't know the right questions to ask. (please no hate mail, I spent 10 years in car sales, it was a fact not an accusation).
Setting up your account correctly to make sure your settlement cutoff is late enough in the day to give you the best leverage is important. Making sure that a "next day deposit" is really next day and not 2 or 3 days is just as important. If you find a processor that you trust and can call if you have issues with your deposit: keep them.
If you need a solid connection with a processor I recommend Liz Nuckolls. She is able to secure the best program for your online processing as well as being a SEMA member that understands your unique business model. Liz has shown amazing customer service in the past and has never failed to take care of previous clients, including our business, with the best rates and great customer service. You can reach her at 1-913-529-2531.
Bitcoin - Bitcoin is a tricky one. Using bitcoin for online purchases makes good business sense for owners because you can't chargeback on a transaction. The one scary part is that it's still very wild west in this industry and the bandits have already made their mark. Using the bitcoin can open up your business to international relationships that Paypal and banks tend to steer clear of, so it may be worth keeping an eye on in the years to come.
I hope this article gave you some better insight to processing your payments online. You can get more information by contacting the network for a personal, one on one discussion if you need more help.
Amanda - ASAP Network 719 432-9415
