Acquiring an
Online Merchant Facility
From Your Bank

If you wish to accept credit cards as payment for products or services sold from your website, you will require a merchant account with a bank. A merchant account will give you the ability to receive a credit card payment and deliver the money into your bank account.

Establishing a system for processing credit cards online is a relatively simple process, not unlike acquiring a merchant facility to process credit cards via an EFTPOS terminal.

Your EFTPOS Merchant Agreement does not permit you to process payments using credit card numbers acquired online.

Credit card details acquired on a website offer a different risk profile to banks. The banks also offer customers using credit cards online a higher amount of consumer protection, including different refund options. Hence, an Online Merchant Agreement is required to acquire and process credit card details acquired from a website.

What will you need to do?

The Online Merchant Agreement requires you to complete a number of tasks:

› fill out an Application Form
› submit a Business Plan
› pay an Application Fee


How long does it take to get a merchant account?

If you have all your information prepared it can take as little as a week. We recommend you have a business plan prepared. In many instances, you will also be required to submit your return policy and privacy statements.

How much does it cost?

Merchant banks will charge for their services. There may be a signing-up or application fee of around $200, and day-to-day charges may be a fixed fee or a percentage of each transaction.

Credit card payments may attract a commission fee, while there are often fixed fees on debit card transactions.

Contact your preferred bank's eCommerce Department for specific online merchant requirements and fees.
Listed below are some of the major banks that provide online merchant accounts:

• St George Bank
• BankWest
• National Australia Bank
• Westpac Bank
• Commonwealth Bank
• ANZ Bank
• Bendigo Bank

If you don't meet the requirements for a merchant account, or it's not cost-effective for your business, you can consider using an online payment-processing company such as PayPal or 2Checkout.com to handle card payments for you.


What is a Payment Gateway?

The final piece to setting up a merchant account to accept online payment is the payment gateway.

A gateway will authorise and validate credit card payments while the customer is still online. These gateways provide a walkway from your web site to a different modem channel to check the credit card status in real-time.

The payment gateway allows your web site to securely accept credit cards in real time. This means your account will be credited within seconds after a customer makes a purchase from your site. This saves you time and money. Allowing you to trade 24 hours a day, 365 days a year.






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Ecommerce Solutions
Websites are becoming an ever more important part of business operations. An increasing number of companies are not only making information available on the Web, but are also letting customers shop and place orders online. The concept of e-commerce is all about using the Internet to do business better and faster.

Selling products and services online can have major advantages for businesses, leading to increased profitability and lower costs. Customers increasingly expect this type of facility and it can improve your cash flow significantly.

Additional Services

Learn more about:

¬ SSL Certificates

Shopping Cart Software

¬ X-Cart Shopping Cart

¬ X-Cart Mods and Add-Ons

¬ Shopping Cart for Existing
    Websites


Benefits of selling online

Selling online has a number of advantages compared with selling by conventional methods, including the following:

  • Savings in set-up and operational costs. You will not need to pay shop assistants, rent costly street premises, or answer a lot of pre-sales queries.
  • Customer orders can automatically come straight into your orders' database from the website, reducing the costs of order processing.
  • You can reach a much wider audience as you will be able to be contacted by people worldwide, giving you the ability to increase sales.
  • You can compete with larger businesses.
  • You'll receive payments more quickly from online transactions.
  • Your business can be open 24 hours a day, seven days a week.
  • You are able to give better customer service and attract more loyal customers.
  • You will be able to track purchases and use data you collect to improve your offering.
  • Your online shop can function as a catalogue for existing customers.



Shopping Carts

A shopping cart provides the  most flexible Web shopping experience. Users can browse all of your merchandise and, for each item, click an"add to cart" button. Users can also view the contents of their cart, deleting items or changing the quantity. When they are finished shopping, they check out by entering their payment and shipping information.

For a professional, affordable and easy to manage online store for your business, we recommend
X-Cart Gold. Learn more about X-Cart Gold Shopping Cart.

If you would like to integrate an online store into your existing website, we recommend our integrated shopping cart solution. Learn more about integrating a shopping cart into your existing website.


Accepting Online Payments

There are several different ways to process credit cards through your website. These include:

Manual/Offline credit card processing

One of the reasons manual or offline credit card processing is so popular is due to many merchants already having an EFTPOS terminal which they use in their retail outlet.

The offline credit card processing option will allow you to securely receive your customers credit card details and process the payment only when you have verified their shipping details and correct CVC number. It’s a great way to prevent charging fraudulent cards.

Advantages:  

  • You may already have an EFTPOS terminal.
  • Cheaper due to you not needing a payment gateway.
  • Puts you in control of your order processing, for example, if you are out of stock of an item, you don't have to process the card.
  • Less complicated to setup - no payment gateway needed.
  • Ideal for internet beginners
  • You can upgrade easily to real time should the volume of orders make it viable

Disadvantages:

  • Since it is a manual process, it can become time consuming - if you get lots of orders you will be running lots of card numbers through your EFTPOS terminal.
  • Banks prefer you to use the real-time method if transacting on the Internet, so you may find it harder to obtain a manual merchant account if you plan to  trade only on the Internet.



Real time credit card processing
Visa LogoMastercard Logo

This method is more expensive than the manual method however it suits companies that have high volume or do not wish to use the manual processing method.

If you choose this method, the specific secure transaction server passes your customer's credit card details to a third-party payment gateway company, such as Camtech, who will in turn process those details with your bank. The bank then either approves or declines the credit card transaction and sends back a message to the payment gateway which in turn sends the message back to the secure transaction server. The server then displays an accepted or declined message to your customer and gives them the chance to correct any errors they may have made when entering there card details before trying again.

Because this process is done in 'real time' (i.e. instantaneously) the money is transferred into your merchant bank account at the time of the order (or shortly after - depending on when the bank actually does the transfer).


Advantages:

  • Money is transferred at the time of the transaction.
  • No manual card processing work required. You simply need to pack and send the order.
  • You only receive orders that have actually passed the processing stage, eliminating time-wasters.
  • Becoming cheaper as ecommerce becomes more commonplace.

Disadvantages:

  • Requires an account with a supported third-party gateway as well as an Internet merchant account with your bank.
  • Currently more expensive when compared to the manual/offline processing method.
  • Cards are processed regardless of stock level or availability. If you are out of stock then you must organise a refund (most payment gateway companies now provide you with the ability to provide refunds.)
  • More complicated to setup.


Third Party Payment Processors

A third party payment processor is an independent company which can process your credit card payments without requiring a merchant account and payment gateway. Some examples of third party companies are PayPal and 2Checkout.com.

Sign up for PayPal and start accepting credit card payments instantly.

Payment-processing companies obtain payment from your customers' credit and debit cards on your behalf and forward the money to you. They offer a useful alternative for businesses who have a smaller turnover from card transactions or who can't open a merchant account with an acquiring bank.

Advantages:

  • Payment-processing companies relieve you of the administrative burden of managing customers' card details and running a merchant account.
  • They save you from having to set up secure payment systems.
  • They save you money on monthly fees from both a merchant account and payment gateway.
  • They have less strict application procedures than a merchant account requires - you will not usually be required to supply the same level of detailed information about your business plan, trading history and suppliers.
  • Your application can be processed much more quickly than for a merchant account.
  • No need to deal with a bank.

Disadvantages

  • Customers can see that the payment is not going directly to you even though they may be conducting the transaction through your website.
  • It can take up to seven working days to complete the transfer of payments from your payment-processing company's account to your bank account, depending on your bank's policies.
  • Charges are generally higher than for a merchant account. However, costs are falling and the market for these services is competitive.