As you probably know, search engine optimized web design is one of our many services. As part of our web design service, we often find ourselves helping business owners figure out the best way to collect money online.
If you’re a small business person looking for a fast and easy way to collect money online, here’s what you need to know.
First, some general information about collecting money online:
- It’s all about credit cards. While there are some systems for taking checks online, collecting money online is all about credit cards. A lot of business owners don’t like to accept credit card payments because…
- Credit cards mean that you pay processing fees. LOTS of companies offer credit card processing and all of them collect fees – usually there are three fees collected (see below). Most credit card processing companies want business owners to open a merchant account with them before they’ll help you take credit cards. Merchant accounts come in all shapes and sizes and they can be very confusing, but…
- You don’t necessarily need a merchant account. This is one of the biggest misconceptions about accepting payments online. You don’t need to open a merchant account to start taking money…but they can save you money as your business grows. However…
- You DO need a payment gateway. In English, the words “payment gateway” mean “a secure web page where people can type their credit card info.”
There are lots of payment gateway options, but if you’re looking for something fast with no up-front costs, I suggest you look at PayPal’s Website Payments Standard and Google Checkout. Both of these systems allow you to setup an account immediately, and with a few clicks you can create a simple “buy now” button or mini shopping cart.
Fees. There are three basic types of fees that you can pay when you accept a credit card payment:
- Percentage of sale transaction fee. Often times, a percentage is charged in lieu of a monthly fee. Some processors take as little as 1.9% of the total amount collected, where others will take as much as 4%.
- Flat transaction fee. This is a flat fee that is paid to conduct each and every transaction. Some processors charge as little as $0.10 every time you take a credit card, and some charge a few dollars each time.
- Monthly account fee. Monthly fees usually entitle you to extra features and/or a significantly lower transaction fees. Accounts with a monthly fee often come with a setup fee as well, so be sure to keep an eye open for that one.
Generally speaking, a low monthly fee = higher transaction fees while a higher monthly fee = lower transaction fees. PayPal has a nice breakdown of their fees and packages here, and you can compare them to Google’s fees to see the differences.
So that’s it – open an account with PayPal or Google, setup your “Buy Now” button or mini-shopping car, and build your fortune in less than an hour.
NOTE – If you’re trying to take money online but you don’t care about having a “Buy Now” button or Shopping Cart, check out FreshBooks. They have a nice online invoicing system that’s very inexpensive, and you can use it to invoice clients and receive payment in your PayPal or Google checkout accounts. We use Freshbooks at Spork Marketing and highly recommend it.