Stock Trading and Other Things

How do I setup a payment processer for my website?

I'm planning for an Ecommerce website and want to setup a payment processor. I had seen the "PayPal Website Payments Standard". But sounds costly if your margin is small. Please help me out!

Public Comments

1. We primarily use PayPal for our site, www.flamingtext.com, however we also accept direct credit card payments using 2CheckOut.com. There is a small setup fee for 2CheckOut.com (I think it was US$25 when we joined, not sure what the current rate is).

2. The most expensive part of accepting credit cards for your business is paying the "discount rate", to the credit card processing bank. The cheapest, lowest, "discount rate" is physically running a card through a machine or "swipe rate", like you do when you shop. The next rate is called a "keyed in rate." Where the customer puts the number into the pad off the computer with the 3 digits off the back of the card as proof. This is an added security measure the banks like to see that will win you the next rate. The highest rate is when the customer calls you on the phone and verbals the number to you a, "non-qualified rate." Basically each level is an added amount of risk the processing bank is making you pay for with each transaction. There is one more rate and it should be lower, more around the keyed in rate, and this is for debit cards. Today, 80% of all cards used in the market place are debit cards. Also Discover card and American Express have the highest rates. So all this said, your business "is going to incure a bit of an expense" in order to accept your first credit card. However, in order for you to be in business at all, especially an e business, you HAVE to accept CC's.

Now back to your question, you have to shop around. I would suggest shopping the conventional cc processors first. Who are they? Look in the phone book in every major city. Or go to a couple local businesses and ask them for a referral. Stay away from "Heartland" Look for a company who does not lock you into a contract. Also you should not have to buy any equiptment other than the link. If you do buy a machine, buy it. Do not lease it for 8 times more than it is worth. The non-internet based cc proccessors will probably give you better rates than any internet based cc processor. I used to work for a proccessing bank and we had an option for internet based businesses. Basically, shop around until you find the lowest discount rates, on Visa and Master Card around 1.5 - 1.75 at a .10 transaction fee" and no statement fee. If they can offer you these rates for "swiped in rate". The keyed in rate which is where you business is, is around 1.00 higher. That is a great rate. Disc & Amex will be around 3.5-4.0, far less people use these cards and you don't have to accept them if you so choose. They will charge you $150 to $200 to set up your account and they will give you a link your web designer can easily add to your site. Each month you receive a statement call the processor and have them explain it to you. You want to make sure they don't change the rates on you.