Credit Card Basics for Online Retailers

Setting up your site to receive payments can be one of the more challenging aspects of heading out into the online marketplace. You basically have 3 options:

1) Paypal or Paypal-style processing account
2) Virtual terminal
3) Manual processing

These options can generally be used in combination. Let's review the pros and cons of each of these options:

Paypal
Paypal is very easy to setup, and does not require financial statements, proof of insurance or shareholder documents, nor do they require a guarantee or deposit. All they require is a business bank account, and a credit card to become fully verified. It generally takes less than a week to get your account verified.

Not everyone is comfortable using Paypal, and merchants accepting only Paypal can be viewed sceptically by online shoppers. Although Paypal has its own 128 bit SSL encryption, your website does not need to be secure to process through Paypal, which potentially leaves your customers credit card numbers unencrypted, depending on how your website is setup. Also, Paypal can take over 10 days to transfer funds from the Paypal account into your bank account. Paypal's exchange rates can also be a bit higher than most merchant accounts would be. Although Paypal is a great service, and very convenient for setup, I generally recommend that e-tailers get a Virtual Terminal as well.

Virtual Terminal
Setting up a Virtual Terminal legitimizes your online business to online shoppers; all legitimate Virtual Terminals require full 128 bit SSL encryption, which protects the information your customers enter.

It can take up to a month to set up a Canadian company with a Virtual Terminal; U.S. companies have a much quicker processing time; they can often be setup in less than 24 hours. Once you are setup, it generally takes less than 24 hours for the funds to be transferred into your band account.

Processing rates vary depending on a variety of factors, including:

• the industry you're in
• who your customers are
• if you are selling a physical item or a service
• which credit cards you accept
• which credit card rewards programs your customer is enrolled in
• what your sales volumes are

If you are selling your own tourism related products, such as kayak trips or walking tours, you need to discuss the application process in greater depth with your Virtual Terminal provider in order to indicate your industry correctly. For companies reselling high-risk products such as Travel Agencies, a bond may be required, as the risk for processing travel purchases is quite high.

Retailers selling physical products that are shipped using a reputable courier are much easier to get setup than service providers, and generally do not require a bond.

Manual Processing
The final option is to accept the credit card numbers online, but to process them manually using your Point of Sale processing system. Be aware that you need to be approved by your Merchant Account Provider for this type of processing, and depending on a number of factors, you may not be permitted to do under your agreement, in which case you would be required to physically swipe the card in order to accept payment.

5 Steps to getting your inventory online successfully

When you first begin to get your inventory online, it can be time consuming and frustrating. Here are some tips to make the process a bit less daunting:

1. Pick a category to populate first, e.g. a specific brand or an item type such as T-Shirts. The key here is ensuring that you have a small sample of what you sell in your retail store, that you can use as a learning experience. Keep it down to about 10 distinct products for your first batch; you can increase the size of the batches as your confidence level increases.
2. Get images of the products in the first batch, being sure to treat them in a similar manner. It is important for the professional image of your site to ensure consistent image treatment. Be sure to use a process that is repeatable when you take your pictures. (It is generally not advisable to take pictures of your products outdoors, as the light quality can vary substantially from minute to minute.) Keep your background consistent; if you use a white background, always use a white background, with the same lighting.
3. Decide what information you would like to share with your customers about the individual products; e.g. Brand, Special Features, Materials, Short Description. Try to be consistent with the length of the descriptions, and the type of information available: "Sweet 17 Jeans, Low-Rise Button Fly, Dragon Detail, These stylish hand embroidered jeans flatter every figure and provide excellent comfort. 80% Cotton, 20% Lycra" Be descriptive, but keep it short.
4. Decide how much you intend to sell your products for, and how many you have on hand to sell.
5. You should now have everything you need for the first batch; it's time to upload your items, your descriptions, your pricing, your inventory counts, and finally, your images.

Congratulations, your store is up and running! Now for the next batch...