iGeneration Banking Solutions

Read This Before You Sell Anything Online

If you're just starting a business that sells "things" you're probably trying to figure out how the payment options work.  I intentionally used the term, "things" because sales in the modern world can be more than just retail.  Sure, you can sell books and toys, but there's also a lot of you that "sell" professional services.  Today, dentists, doctors and photographers all offer ways for their customers to buy or pay online.  Pretty much anything and everything can be sold online these days. Let's take a look at how that works.

First, let's start with a traditional counter sale.  Think of this as a purchase at the hardware store or the local grocery store.  You walk up to the counter with your stuff, the clerk rings it up and you pay with cash, check or a credit card.  If you use the last option, you'll probably have a credit card machine in front of you that can be used to swipe or insert your card.  This is referred to in the banking industry as a "retail transaction" or a "card present" transaction because your credit card is present and visible for inspection against fraud.

Now that you understand the basic "card present" model, let's move on to everything else, which is where most of you reading this will fit.  If you aren't using a counter sale device like the one mentioned in the previous paragraph, then you fit into the "e-commerce" category.  This is basically any transaction that is made in a way other than a retail sale.  With all the fantastic technology available today, this can include restaurant sales at the table with a device like an iPad or a sale at a food truck, trade show, or web site.  It also includes transportation sales like taxis, Lyft and Uber.  All these non-retail or e-commerce sales have one thing in common - they require the Internet in order to transmit the payment details.

Transactions that happen over the Internet use something called a gateway.  The gateway's job is to securely transmit the payment information from your Internet connected device to the credit card processor. It requires connections and conversations with multiple parties including your card processor, the customer's card company and your point of sale device.  This all happens in less than 5 seconds and results in either an approval or a decline.  Website shopping carts, smart phones, laptops, tablets, smart watches and automated phone payment systems all use a gateway.  Amazon is the largest example of the gateway transaction process.

If you are considering how to sell your "things" online then you've no doubt seen the multitude of options available.  Many companies will try to sell you on a "one step" sale process.  They never mention the actual pieces or components involved. In short, they don't talk about gateways.  Square and Paypal are examples.  They have their own gateway and integrate it so tightly that the customer never sees under the hood.  There is a downside to this type of product though.  It's considerably more expensive.  That extra 0.25% may not seem like a lot to you, but I encourage you to multiply your annual sales by 0.25%.  Now do you see my point?  These types of products are typically super simple to use but they are very limited in scale, meaning your business will probably outgrow them (and realize the need to stop wasting profit margin) quickly.

For a better option, consider a gateway product like Authorize.net.  It is literally the worlds largest gateway in terms of customer use.  They also have some of the best customer support on the planet (something Paypal is NOT known for).  They also work with almost everything out there, from software payment platforms like storage company management software (monthly billing anyone?) to bowling alleys and healthcare billing.

If you need help navigating options, reach out to us. 
We'll be glad to help.  If you're looking for a great price on an Authorize.net gateway or card processing, we can help with that also.

Best of success to you.
blog comments powered by Disqus
© 2017 The Alan Group Contact Us