Setting up your merchant account... frustration is just part of the process

A recent experience (with Canadian merchant accounts) has led me to believe that it is important to apply to 2 separate merchant account providers, using different gateways, in order to minimize the potential delay caused by a lack of transparency in the process.

Responses like "You are approved... if you agree to allow us to take $10,000 and hang on to it indefinitely, until the point when you close your account. Did I mention that we will not even pay you interest on the money? Silly us."

The fact that every single Canadian merchant account that I have been involved in the setup of has had completely different requirements, even when using the same gateways, leads me to believe that there is a lot wiggle room on requirements, and, depending on the specific individual that you are dealing with, you could have no problems getting setup. On the other hand, you could spend the next 6 months trying to accommodate each bizarre demand as they come up, such as: "Yes, we have processed your paperwork. Now all we need is for you to sign an agreement stating that you will never move to another provider"; or "Yes, thank you for the business plan, it's the best plan we have ever read. You are our ideal merchant. Now what we need to get your merchant account setup is for you to open a company in the US, so that you can accept US dollars"; or my favorite one yet: "Get your supplier to sign this document so that they will be responsible for paying us for any charge-backs for as long as your companies shall exist."

Yes, you read that last one right.

I would have less of an issue with these demands (except for the supplier guarantor, which I take grave exception to), if they were applied consistently, with transparency, so that a company would know what to expect in advance. The fact that I still cannot tell my customers what will be required of them in the process to begin accepting credit card payments online, in spite of having helped with this process many times, tells me that there is something wrong with the system.

Apparently usury and racketeering are alive and well, and are also just 'part of the process'.

Christmas is coming, retailers (are you ready?)

I know, Christmas is still 2 months away. 2 months, however, is not a lot of time if you are planning on moving forward with e-commerce to take advantage of online sales for the holidays.

You have about 2 weeks to get online from today before the real holiday shopping starts in earnest. It is possible to get up and running in time, but the clock is ticking. (In Canada, if you don't already have a Virtual Terminal, you must start now.)

We can help; get in touch with me as soon as possible if you are ready to get started.

You don't have to be big to do bookings online

What to look for in a SME Booking Solution

Offering online bookings can help to boost the number of reservations you receive by making it more convenient for your potential guests. You can expect to experience the same benefits that other businesses have once they made the move to sell online. These include but are not limited to: access to a global market, 24-hour business, receiving payments more quickly and attracting customers who would not normally have found you. Depending on the solution you choose, it may also help you to manage your inventory, store your contact database, generate reports and even support your marketing efforts.

There are a number of different options available for you to allow the booking of your products online.

The first and perhaps most common approach would be to hire a web design and development company to add the functionality to your website. The main advantage to this approach is that you can build the system to suit your specific needs. The major drawback of a customized application is that it can be quite expensive. You should expect to pay from $10K - $20K for your own web based booking system. Add another $5K if you don't already have a website.

Another option and less costly solution would be to sell your tours or packages through a hosted web application. With this solution, you can spread your costs over time. For instance you may pay a monthly fee, a commission on the items you sell or a combination of both. You might think that the pros and cons of a system like this would be the opposite of those I described for the custom approach. That is, what you save in cost is offset by less functionality. However, you may be surprised to find that a hosted web service, especially one that was made specifically to sell travel inventory, may possibly have all the functionality you need and then some. A good hosted application should offer most of the following features...

• Detailed product management
• Real time inventory
• Support for multiple payment methods
• Bookings are made through a secure server
• Generate revenue and passenger reports
• Address book or contact database

It should also allow you to customize the look and feel of your booking pages so that any transitions between your site and the booking application are seamless.

When comparing hosted applications, make sure that you do the math. Figure out how many bookings you typically receive each month. Multiply the number of monthly bookings by the commission rate that one service may charge. Then, compare this projected monthly commission against the services that charge monthly fees. You may want to estimate a higher number of monthly bookings when doing these calculations. After all, the whole point of offering bookings online is to increase the actual number you receive.

Independent Tour Operators Have BIG Advantages

Online travel is a huge, multi-billion dollar industry, and is composed of tens of thousands of travel agencies, with hundreds of thousands of small tour operators selling their tours through these agencies and independently. As a small tour provider, you have the opportunity to sell direct to your customers over the internet, taking the middle man out of the equation, and increasing your profits. You are also considerably more nimble than your average travel agency.

You can market directly to your target market. Do you provide mountain bike tours? By marketing directly to mountain bikers through community involvement, blogging about the sport, and participating in your local community, you raise awareness of your business. Network with the local bike shops. Provide the opportunity to book your tours online, and become the destination for your demographic.

You can dictate your reseller terms. Most travel agencies rely on a collection of Goods Distribution Systems (GDS) to gain access to tours, flights, and accommodations, which they then resell. In order to be resold by the GDS, you must comply with their terms. This can mean waiting months to be paid, and having refunds applied against you without your input.

One of the biggest advantages that you have over Travel Resellers is this: you can accept payments online without outlaying large cash bonds to secure a merchant account. This makes your overhead that much lower. You can provide quality tours for reasonable prices, and make a tidy profit.

You will need the following to accept your bookings online, and be approved for a Virtual Terminal (your online credit card processing account):

1) A decently designed website.
2) A booking engine that is designed to accept credit card payments, and supports 256 bit security.
3) A section on your website that addresses your terms of service, refund policy, and website usage terms.

Once you have these in place, you can apply for your online merchant account.

The next step will be setting up your online tour inventory, and marketing your site with the same zeal that you bring to your offline marketing. Get out there and get blogging! Your customers are online; go and get them. Setup a Facebook account for your tours, and connect to your current and future customers.

Now you have the opportunity to sell direct, keeping your costs low so that you can pass those savings onto your customers, while provide more comprehensive services for less then your resold counterparts. You have also just increased your online respectability by accepting the most widely used online payment method, and pre-qualified your customers by accepting payment in advance for your tours.

And that makes you 3 large steps ahead of your average travel agency.