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VISA, MasterCard and Discovery credit cards are circulating the online market like foreign troops invading a country. If you run an online business, and you are selling products or certain services, you must enter the trend and accept credit card payments. People find it so much easier if they can get their hands on a favorite pair of boots on the instant, by using their credit card, and receiving the order the next day. The electronic payment system is:

• A trustworthy system both for you as a merchant and for the client
• An easy process
• A system that will bring you significantly higher profits, through impulse shopping. People come to your site to buy only a specific item, but then they will also notice that discounted digital camera you are offering. If the card has enough funds, they are going to buy it.

What you will need before you can implement the process

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• A Business checking account
• A Business license (issued by your government office)

You should carefully research the market and see which the best offers for business checking accounts are. These types of accounts are specifically tailored to meet your merchant needs. At BOA for example, you will find more types of such accounts available, you just need to choose what suits your needs best:

• Basic account – total security protection, bill pay options, mobile banking and other customizable offers
• Business plus (Advantage) – you can add between 1 and 3 additional checking/saving accounts, so that you can manage your finances even better and online payroll option.
• Business Analyzed Checking – if you want to receive detailed statements.

Settle for a merchant account provider

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Now that your business license and your business checking account are in order, you should comparison shop to find the most advantageous merchant account provider. Some of the most important factors you need to check are:

• Whether they charge you a monthly fee
• What is the per transaction cost ( usually between 0.15 EUR and 0.50 EUR maximum)
• Processing and high risk rates? (The high risk rate should not exceed 5%)
• Check whether all currencies are accepted, especially if your online business has an international profile.
• Make sure all major types of credit cards will be accepted

When you have found a preferred provider, you will contact them and ask about the main options. If you like what you have found there then it is time to set up your account. You will need to provide personal information along with business details and estimates + your business checking account. From there on, let professionals handle it. You just sign the contract, and you are ready to accept payments from your worldwide customers, hassle free and quick.

Next, a “buy now” or “add to shopping cart” type of logo is going to be inserted on your website, so that your customers can add the products/items to their e-shopping baskets and be able to pay using their credit cards.

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The payment gateway is an equivalent of the physical point of sale systems. It is an e-commerce application that aids in the e-business, bricks and clicks as well as online retailers transactions by authorizing payments. This service serves by encrypting sensitive information to ensure security in the transactions. This is becoming the best option in business transaction because of the security they offer.

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What is a Payment Gateway

The payments gateways usually come in styles of two; secure order form and merchant side application. The secure order form style is the most used in transactions. This usually takes the customers to a third party site for the credit card processing. The payments are made to an individual merchant account. On the side of the merchant side application, the API is usually integrated in the hosting server of the merchant’s site of ecommerce.

Why Have Payment Gateways

The working of the payment gateway ensures utter security to the two parties involved. Any payments done via a debit or credit card has to authorize by the credit card issuer. This helps in the checking whether the card is accepted. The channel then provides a secure link between the business, the customer and the credit card processor. This helps in ensuring efficiency in the transaction processing with a response time of approximately 2 seconds.

By the end of the day, the payment gateway provider compiles all the transactions and submits them to the bank as one single batch. This is the process responsible for the transaction processing so that one receives their payments. It is called settling. After the settling process, it only takes approximately two working days for one to see their funds electronically in their bank account. This means that the transaction process is not only made secure but also considerably efficient.

Benefits of Payment Gateways

Another great benefit that the business rips from the payment gateway is the reliable reporting. Every transaction done is usually listed in a comprehensive report, which one can access via the facilities. This makes it possible for one to review their transactions in a particular period. They can further be downloaded or printed for any further processing. Some of the providers offer services that are compatible with one’s QuickBooks, which eases the accounting process.

Unlike the terminal or the software solutions, the payment gateway allows for unlimited users. This means that people from different locations so long as they have the access can look at the transactions at the same time. Transactions can also be entered by multiple users. This eases transactions by offer flexibility in location.

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Fraud is no longer a problem with this payment method. The payment gateway offers the fraud screening tools. These are used to reduce fraudulent transactions. This service includes an address as well as a card code value verification feature. This feature helps in the fraud prevention via the storing of all credit card transactions unlike other services that store them on ones website. This storage method helps reduce ones liability since they are not responsible with the storing of information relating to the credit card.

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We’ve gotten some emails about our post yesterday and we thought it’d be great to offer our readers even more methods to prevent credit card fraud for online merchants. Some friends who are seasoned online merchants have even stepped forward to let us in on common sense techniques to stop fraudulent transactions from hurting their business. Here are 5 effective tips that can help you prevent credit card fraud.

Tip 1: It pays to be suspicious
Be vigilant is scanning each order and watch out for information that may raise warning bells. These signs usually indicate fraudsters at work and you should scrutinize each transaction for credit card fraud.

Tip 2: Scrutinize each email address
Besides being suspicious of free email accounts like those provided by Yahoo! Mail, Hotmail and even Gmail, you should be able to spot and be suspicious of email addresses that contain random characters. They may be randomly generated. Also, try to see if the email address matches your customer’s name. Something is wrong if you have one “Jane Brown” placing an order with an email address like “jackie_blue459@hotmail.com”

Tip 3: Be wary of high-risk countries
Countries like Asia, the Middle East, Eastern Europe and Africa are classified as high-risk. While it’s not really advisable to discriminate against them all the time, it would be wise to practice precautions. Some merchants chose to disallow international shipping but if you do the same, you may miss out on a sizable chunk of business. Additionally, items shipped to port locations like Miami and Los Angeles may especially if a shipping mismatch has been detected. Fraudsters have been known to buy goods with stolen credit cards and shipping them off to other countries for a tidy profit.

Tip 4: Beware unusually high order amounts
If a customers orders 20 laptops that total up to tens of thousands of dollars, you may want to contact them and ask them for clarification. This is not a common purchase and if you have strong suspicions of credit card fraud, confront the customer or report this to the authorities before it’s too late.

Tip 5: Utilize IP firewall to block multiple attempts at fraud
Ask your merchant account service provider about additional information on IP firewall features. With this useful tool you can shut out fraudsters and prevent them from making multiple attempts at fraud once you’ve exposed them initially. Of course, some of the more resilient ones will try to use a proxy to mask their IPs but as long as you have set up roadblocks like a firewall, this will act as a deterrent for future fraud attacks.

Tip 6:

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In a recent survey, online merchants revealed that they are most worried about credit card fraud in the e-Commerce business. They expressed anxiety over their apparent vulnerability to fraudsters, and feel that they are spending too much time reviewing orders to spot cases of fraud, when they could have used the time to improve other aspects of their business. Other than the usual address verification system (AVS), most merchants are seeking ways to expedite credit card fraud detection, and not just discriminate against common warning signs like expedited shipping and international addresses.

For this we would advise merchants to take note of these quick payment gateway-related steps that can be performed in order to stop fraudsters in their steps:

Tip 1: Look at your daily reports from the payment gateway
This should be done every day before orders are processed. By scrutinizing the transaction, you’ll gain an insight into the various transaction attempts before your eyes, and instantly see declined transactions. It’s common knowledge that fraudsters favor online stores to test their fraud activities so you can conclude that numerous attempts made in a single order may be the result of thieves performing their dirty card testing fraud.

Tip 2: Look into shopping cart lockout feature
Simply said, this feature locks out suspicious customers whose credit cards are declined numerous times in a single session. Again this is an instance of credit card testing at work. If you shut out the thieves, less damage can be done to your web business. Using IP or cookie-based protocols, this shopping cart feature can be utilized if it’s available from your shopping cart software provider. Once obtained, you can then configure how many times a card can be declined before the “card holder” gets locked out. You can also choose to temporarily “ban” him for an hour or a day. This obstacle will stop fraudsters in their tracks and you will then be safe from their malicious activities.

Tip 3: Invest in add-on fraud services
You may think your payment gateway provider is trying to sell you a lot of features you don’t need, but if you take a closer look at some add-on features, you may find several that can help you weed out unscrupulous fraudsters. Beyond the standard Address Verification System, these features are designed to run additional searches, and dig deeper into a credit card’s history and background. You’ll then find out if the particular card is notorious for frequent chargebacks or have been reported stolen or lost. These add-on fraud detection services cost at least $20 to 30 a month but if you consider the money you can save from the clutches of fraudsters, the amount will suddenly seem like peanuts!

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An online merchant always strives to know more about the e-Commerce business. And by now, if you are an adept merchant, you would have heard about payment gateways! Merchant newbies may be intimidated by this seemingly “heavy” word but fret not, we will enlighten you about how it works. Read on!

1. A Payment gateway is a computer program that works for online businessmen. If you plan to sell your goods online, then you need to have a Payment Gateway.

2. A Payment Gateway works in conjunction with a shopping cart software using an online shopping cart, customers browsing through the products that you have showcased online, can select whatever they would like to purchase including it’s color, size, quantity, etc. After the decision to buy all the items has been made, the customer is allowed to proceed to the virtual checkout counter where the shopping cart software not only adds up all the cost of the items chosen, but also adds the necessary shipping tax and other charges to finally compute the total payment due. The shopping cart itself contains an online form where customers enter their credit card numbers and other pertinent customers’ information.

3. The card information entered is encrypted by the shopping cart software. once the online form is complete, the customer clicks “SEND”. Then, the payment gateway software encrypts the information and submits the data to the credit card processing company. The gateway then informs the customer whether his/her credit card transaction is accepted or denied with the appropriate return message. The entire process is carried out under extreme security measures!

4. A payment Gateway offers Merchant Batch Processing. At the end of every business day, the payment gateway gathers all the transactions that occurred on your site and then sends them all in one batch to your bank. The bank then collects payments from customers and deposits them in your account.

5. A Payment Gateway includes a reporting tool. The payment gateway software includes a reporting tool where you can view all your online shop’s transactions. You can then review these transactions, correct them, or store them in your PC. This way you stay up-to-date with your online site.

6. A payment gateway screens all transactions to check for fraud.With payment gateway, you need not worry about dishonest customers using fake, cloned, or stolen credit cards. It contains highly-effective screening tools that screens out these fraudulent transactions.

7. Virtual terminal facility.With payment gateway virtual terminal, you can manually enter this information into the payment gateway software.

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The carrot on the stick
Imagine this scenario: You’ve stumbled upon a spiffy looking website online offering a free trial pack of colon cleansing products together with an impressive looking e-Book. All you need to do is submit your name, address, credit or debit card details (for a nominal “shipping and handling fees”), as well as other personal details, and you’ll enjoy a month’s supply of colon cleansing product, JUST the thing you need to lose some weight in time for Christmas… RIGHT?

A nasty shock
WRONG! Yes, you will receive your trial package in a timely manner, but in 30 days’ time you will also find a credit or debit card charge for an astoundingly high amount – quite different from the initial S&H charge! Surprise, surprise. Upon deeper scrutiny, you find out that there is a tiny fine print on the website you signed up for your trial offer dictating that unless you call or write in to cancel that offer, you will be billed CONTINUOUSLY for the product! That means an extra $50 or more for you to pay, sometimes unknowingly each month!

Negative option
This problem stems from a clause called “negative option”. Unethical merchants take advantage of this by egging on customers to sign up for the trial offer, and not letting them know about the fine print. Customers who DO know about this, find it difficult to cancel the offer and by the time they managed to get through to the merchants via email or telephone, it will be too late.

Visa to the rescue
Knowing how rampant this scam is, Visa decides to terminate some 100 merchants’ credit card processing account recently. Online shoppers can find solace in the fact that Visa is stepping up on their security measures so that consumers will not be scammed by such unscrupulous tactics again. Visa group president William M. Sheedy says that Visa has been hot on the tail of unethical merchants since summer and will continue to wipe out such merchants before more customers get scammed, especially with the approaching holiday season.

So the next time you shop online, be aware of scammy looking acai berry or diet product scams.

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