If you’re just getting started with your business online and curious about how you collect payments safely on the internet, this post is for you. :)
There are many options for collecting payment online for your products or services. We’ll focus here on the lower cost options for those who are on a limited budget and want to get started fast.
You’ll need three puzzle pieces working together to sell online:
- your website
- a secure shopping cart
- a payment processor (this may include both a gateway and merchant account)
Note: Many solutions and providers offer several of these things bundled together. For example, PayPal can be your shopping cart, gateway and merchant account. It enables you to setup an account and send and receive secure payments easily online and is a very common way for small businesses to accept payments.
First, you’ll need a website so you can put up your sales page with info about your product. Weebly and WordPress are two easy ways to create a website or sales page. This post is more focused on parts 2 & 3 to accept payments.
Second, you need a secure shopping cart to collect the order information. This is like a shopping cart in the store, it’s what lets your website visitor “grab” that item from your website and indicate that they want to purchase it. The cart will collect the items the visitor wants to purchase, total them, add shipping, and gather the shopper’s contact information.
Consider these options for a shopping cart:
- Mal’s E-Commerce – www.mals-e.com (free and premium versions, recommended for physical products)
- E-Junkie – www.e-junkie.com (small monthly fee, fantastic for virtual/downloadable products)
- PayPal Buttons – www.paypal.com (this option combines your cart and payment processor in one, good if you’re only planning to accept PayPal)
- ClickBank – www.clickbank.com (requires setup fee, but allows you to reach a wide market of affiliate sellers)
- 1ShoppingCart – www.1shoppingcart.com (more expensive for full functionality but includes cart, affiliate program, and newsletter options)
- Infusion Soft – www.infusionsoft.com (complete contact management, online sales, etc – great for bigger online businesses)
Depending on your planned business model you may also check into an option like AMember or WishList for sales if you’re doing a mix of products that includes a monthly membership option.
If you’re interested in more information on how to choose a good shopping cart for your website, here’s a post I wrote on what to look for: http://michelleshaeffer.com/how-to-choose-the-right-e-commerce-solution-for-your-website/2009/12/12
Third, you need a payment processor for the shopping cart to send the shopper to so they can submit payment securely to you.
Option 1: Online Payment Services – the easiest way to get started and keep it simple
Popular online payment services like PayPal, Google checkout, and RME combine a gateway and payment processor into one and allow you to link to their website where the payment details are entered by your shopper, then the payment service credits your account with their payment. The customer’s billing statement will show the name of the online processor (sometimes in combination with your business name) and you do have to comply with the payment service’s additional rules.
The simplest way to securely accept payment is through PayPal.com. You’ll need a premier or business account and it will charge a small fee for each sale it processes but it allows you a simple way to accept Visa, Mastercard, Discover, American Express, e-checks, and PayPal funds online. The funds are credited to your “PayPal Account” when a customer purchases and then you can either transfer the funds to your bank, use the funds to shop online, or request a debit card from PayPal that allows you easy access to the funds.
Another option is Google checkout which is similar and allows you to accept credit cards through their system. Google checkout deposits into a checking account (instead of holding your payments in an online account like PayPal).
Option 2: Merchant Account and Gateway – a good option for growing business
The other option is to accept credit cards through your own merchant account. This process is more involved because it requires an application process, and then once approved you need to setup a gateway to connect your store to your merchant account and you’ll have additional security requirements for your website. It’s not the best way to “get started” because the fees are significantly higher and only make sense when you’re processing a good volume of transactions.
- Authorize.net is a popular gateway and also offers options to make security requirements easier to fulfill.
- Quantum Gateway is another popular option and is included free with merchant accounts through CDG Commerce.
- ProPay is popular with small business online and allows you to process the customer’s card number yourself.
You might also check with your shopping cart for recommendations on gateways and merchant accounts. Not all shopping carts work with all gateways and not all merchant accounts work with all gateways. So it’s one of those situations where you want to be sure you do your research.
Michelle has been online since the late 80s, creating websites since the early 90s, and has coded thousands of web pages in that time. She's worked as a virtual assistant and website designer for small business owners including marketers, authors, coaches, crafters, and other solopreneuers.
Twitter: melaniekissell
says:
I don’t believe you’ve left any stones unturned, Michelle. Thanks! I’ve been focusing on affiliate marketing and I don’t yet have any of my own products to sell … but I will. So getting a handle on all my options now is perfect timing for me.
I think I may start out with e-junkie since it fits comfortably into my marketing budget and I will be developing downloadable digital products. Looks like a really sensible choice.
Melanie
#blog30
Twitter: SmallBizMuse
says:
e-junkie rocks, Melanie. I used it before I switched to amember, and I still prefer how much easier e-junkie was, and how simple it made checkout/download for customers. You might try googling for a coupon code – they often offer ones that get you 90 days free. I think CRAFTBOOM was valid last time I checked. :)
Michelle-
Thank you for this article. As a newbie, I am familiar with paypal which is easy to setup. Right now, I have no products created yet. Once, I do I will be armed and ready with all the information you just provided. I will definitely check out e-junkie. Need something that is simple and not so complicated.
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Twitter: SmallBizMuse
says:
Do check out e-junkie – you’ll find it works great with PayPal.
I’ve been using Pay Pal and have found it to be excellent. However, as my business increased and I have more money coming in… I will consider changing to something I have more control over.
Pay Pal has been known to shut down merchants and freeze their assets if an increase of money comes into your account all at once. (Perhaps your had an outstanding product launch) If you anticipate a large increase of money coming into Pay Pal, for any reason, contact them in advance so your money will not be frozen.
Twitter: SmallBizMuse
says:
Very good warning, and it does happen. I have both a PayPal business account and a regular merchant account so a crisis with either one wouldn’t end my ability to accept payment online. As soon as I hit the point where it made sense I added the merchant account (those gateway, per transaction, statement, and other fees can add up for sure).
Twitter: rebekahzjones
says:
Thanks for the great overview Michelle! I’m currently using PayPal, but have looked into E-Junkie as well. PayPal works great if you just have a couple things you want to sell. E-Junkie is an awesome option too, but one thing to remember is that E-Junkie doesn’t do “subscription” or “recurring payments”. So if you want a monthly membership site or want to offer a payment plan, you’ll need to use an option other than E-Junkie. I’m hoping they add that functionality — as I’ll sign up with them immediately if they do!
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Twitter: SmallBizMuse
says:
Excellent reminder. Subscription/membership sites are a whole ‘nother ball of wax and do require specialized setups. (Like Wishlist… which anyone interested in should go to http://www.myfabulousva.com to have setup for them!)
Thank you so much Michelle!
Nancy
Twitter: MichelleShaeffr
says:
You’re welcome, Nancy!