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Offering Multiple Payment Options in Your Online Store

A best practice is to offer options for calling in an order, printing and faxing the shopping cart and payment information, or mailing an order with a check. These multiple payment options increase your conversion rate.

Any significant online store must accept credit cards. Ask your developer or hosting company about options. Try the comparison shopping site for credit card processing from FeeFighters, where top-tier processors bid for your business, to evaluate the cost of different plans.

If you already have a merchant account, you can process credit card transactions offline as long as you have a secure server (https) for this portion of your site. After you reach about ten sales per day, you might want to shift to real-time card processing. At that point, the savings in labor costs offset the increased cost of real-time processing.

Real-time gateways (the software that manages real-time processing) also validate credit cards for billing address, card verification number, and spending limits, all of which reduce your risk as a merchant. Ask your developer or template host for pricing. Unless they're included in your storefront package, both the secure server and real-time gateway usually incur start-up and annual fees.

Other payment options, including the following, are available for special situations:

  • PayPal: Now owned by eBay; allows you to accept credit card payments without having a merchant card account. Fees run 1.9 to 2.9 percent (standard rate) plus 30 cents per transaction. By early 2011, 94.4 million people worldwide were using PayPal. Many e-commerce hosts aggregate their stores through similar services.

  • Google Checkout: Provides one-stop checkout for stores with compatible check stands. A buyer enrolls on Google and enters profile information; the profile completes billing forms on other sites with one click. Google charges 1.9 to 2.9 percent, plus 30 cents per transaction. Retailers using Google Checkout can also obtain a free Google store gadget for use on blogs, websites, and social media services.

  • Prepaid deposits: Debits for small purchases, such as downloading articles, music, or photos. This approach reduces the per-transaction cost that might otherwise make credit cards too expensive to accept for small purchases (unless you have the volume of iTunes) and establishes a minimum order amount.

  • Electronic bill presentation and payment (EBPP): Works well for billing and payment on a monthly basis, or for B2B stores using purchase orders. Basically, EBPP allows you to invoice electronically and then receive payment by electronic funds transfer from the customer’s bank account to yours. This service is available from multiple providers, such as Electronic Banking Systems EFT and Inovium Electronic Funds.

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