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Payment Options Online


Online payment security is an often misunderstood and underestimated element of successful ecommerce.  Some form of payment gateway is needed to ensure closure of a sale.

Basically there are three types of payment gateways;

1.  Realtime Payment Gateway
The first is realtime payment gateway. This type of gateway connects your sites’ shopping cart to a secure credit card transaction area on either a bank’s website or via Payment Gateway business. This provides the most efficient and professional solution. Here the bank or payment gateway takes all the credit card and payment details then informs your site if the transaction was successful, all in real time.

The advantage of this type of gateway is that all transactions are completed there and then. All security is handled by the bank and all you need to worry about is filling the order when it comes though.

The disadvantage with this gateway is that it can be costly. Usually there is a significant establishment fee along with monthly fees and a charge for each transaction (this varies from bank to bank). Site to bank payment gateways are recommended only to those who expect a large amount of credit card transactions on their site or require immediate authorisation of payment (eg. Sites that require payment to allow access to special areas or files).

Currently that are many available, some of the most reliable include Eway, Cardia, Payment Express, Netregistry, Mulitpay, Paypal and Google Checkout to name a few.  It is important to assess your payment gateway for three factors, reliability, features offered and costs.  It is also very important that your payment gateway is compliant with security initiatives suggested by the major credit card providers.  Available features should include fraud prevention (such as address verification), bulk processing, echeck processing, a degree of integration with your website and a virtual terminal that allows you access for manual credit card processing.  

Ensure that your costs are transparent.  Fees are often charged for setup, transactions, monthly fees as well as fees for any additional services you may require.  As you will see again and again, customers online do not want to wait for anything, if you’ve management to get your customer to the point of buying they do not want to wait longer to process the payment.  If your service is down, the chances are that you will have lost the sale. Ensure that your payment gateway is reliable and timely.  It must run 24 hours, 7 days a week.

Just like find the right hosting for your site, it is essential to research your choice of payment gateway thoroughly to make sure it is right for your business and that the cost is offset by reliable and thorough service.

2.  Manual Payment Gateway
The second type of payment gateway is the ‘manual payment’ gateway. Basically, this means that your ecommerce site actually takes orders and payment details for you to process manually.  You still need a merchant account, but you will not need a merchant gateway intermediary.

If you use this type of gateway, you need to host your shopping cart area on a ‘secure server’ that uses SSL encryption. You can tell when a site is using SSL as you will see a padlock in the bottom right hand corner of your browser (if using Internet Explorer).  The advantage with this type of gateway is that there are usually no ongoing fees and you do not get charged for each transaction. The disadvantage is that the transactions have to be manually processed. It is recommended you use this kind of gateway if you get irregular or a small amount of orders. It is also recommended that if you are new to ecommerce, you start with this type of gateway due to the low overheads (all you need is a standard merchant account with your bank).

What is SSL?

SSL (Secure Sockets Layer) is an encryption format used on many ecommerce sites to ensure that hackers can’t access a transaction in progress to steal the credit card and / or purchase details. SSL works by taking the information for the client, encoding it and then sending it to the destination machine that then has a ‘key’ to decrypt the data. SSL is absolutely necessary for secure transactions over the internet.  Other measures such as protecting databases that store credit card information must be taken to ensure confidence by consumers in the e-commerce industry.

3. Payment Intermediary Service.  
Third, a payment intermediary service such as Paypal that allows payments and money transfers to be made over the internet.  These types of services are not banks.  Paypal accounts can be funded from a credit card or electronic transfer from a bank account.  Recipients of Paypal payments can either request a cheque, transfer to their own bank account or they can set up their own Paypal account.  Fees (not always charged) may depend on currency, amount, countries of the sender and the recipient and the payment option used.  Paypal is used by online vendors, online auction sites and other users.  

When using Paypal in an ecommerce site, you are given two options.  First is the express where all the transactions take place on your website, in the second Standard option, the visitor is clicks on a pay now button and is taken to a secure Paypay site, once the transaction is completed the visitor is then returned to the store. Paypal gives you the option of single item, multiple items, collection of recurring or subscription fees, accepting credit cards via your website and the sale of gift vouchers personalised to your business, all in multiple currencies.   Fees are calculated as a percentage of each transaction cost.

There are other numerous intermediaries offering similar services to Paypal. It is worth investigating closely the options to find the right solution for your business.

The Process of getting a merchant account for the website to accept credit cards

  • If you do not have a merchant facility with a bank you have apply for one with a bank of your choice. The bank might request you to submit your financial projection and business plan before they approve your application.

  • If you already have a merchant account, you might need to upgrade it with the bank. Your merchant agreement specifies the payment methods accepted. It may say that you can only accept payments when a customer’s card is physically presented and/or it may be a MOTO (Mail Order/Telephone Order) facility where the customer’s card does not need to be presented (“Card not present”).

  • Internet payment is a separate category again, and you have to either upgrade your current merchant facility or get a new one just for Internet payments. There will be an extra service fee involved and it differs from bank to bank.

  • If you go to a bank, they will usually offer you a package of the three bank issued cards: Visa, Mastercard, Bankcard. If you want other non-bank issued cards such as Amex, Diners, etc., you have to approach these card companies separately.

  • The bank where you hold your business account can be different from the bank from which you get your merchant payment facility. If your bank is offering the service at a competitive price then you can go for it otherwise there is no harm in having it with a different bank.


ACS offer a number of courses which cover subject areas including financial aspects of business operations, E-Commerce, or website development, such as:

Business Operations

Certificate In Applied Finance

Internet Marketing






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