Post by admin on Aug 26, 2007 1:45:21 GMT -5
Electronic payments can benefit your business by extending your customer base; boosting cash flow; reducing costs; enhancing customer service and improving your competitive advantage.
Five reasons why Electronic payments improve customer service � the five �Cs�
Choice � like your competitors, you can offer a wide range of payment options
Convenience � they remove the need for invoices, cheques, cash and BACs
Credit � they may allow purchases that would otherwise be delayed
Concessions � small discounts to encourage online purchases improve the perception of value
Competitive Edge - if you don�t offer the full range of payment options but your competitors do, what does this say about your business?
Five reasons why Electronic payments increase profitability
Convenience � removing administrative resources required by invoices, cheques and cash
Immediacy � credit cards enable instant purchasing (without delay)
Improved cash flow � payment at the time of purchase reduces the pressures caused by 30-day invoicing
Growth � open additional payment channels via the phone, mail order and Internet and increase your customer base. More customers mean more revenue.
Competitive advantage � match and beat the services of your competitors and gain the edge
The following sections explain the processes, costs and risks behind electronic payment systems.
Methods
Electronic payment methods may be costly and challenging but they will give you the competitive edge.
Different payment systems include traditional card payments, mail order, online payments, payment bureaus, secure order forms, BACs alternative payment options and no payment option.
Receiving Electronic payments incurs extra costs. When you pay for a good or service in a shop using a credit or debit card the retailer must pay a commission to the financial institution processing the card details; additionally there will be operating costs for the system used to process the cards.
These systems are often costly, challenging to implement and sometimes technically difficult to understand. These hurdles represent a �barrier to entry� , which, if overcome, can give you the competitive edge.
Electronic business is real and continues to grow as a medium with over 44% of UK adults having used the Internet to order tickets, goods or services (Office of National Statistics, 2002). This website and its diagnostic tool give you impartial and informed information to make the right choices for your business and help push your revenues and the UK economy forward in the digital age.
There are several approaches to taking Electronic payments. All of these types of payment systems can be compared by trying the Electronic payments comparison tool. Some of them can co-exist with others and some are mutually exclusive.
Traditional Card Payments Traditional card payments take place offline.
Offline Electronic payments are common and need you to have a Merchant Service and PDQ machine from your acquiring bank.
There are ten basic steps to setting up offline payment.
Most high street stores can take offline Electronic payments through their credit and debit card facilities. All banks can process these transactions and some will also process Internet based transactions.
To take offline Electronic payments you usually need to apply for the appropriate facility from your bank. Links to these are provided in the Costs and Considerations section.
Here are some key electronic payment terms to consider:
Merchant service: this is the generic term for the service provided by banks that allow you to �swipe� credit and debit cards at your place of business.
PDQ machine: this generic term for the machine that is used to �swipe� a credit or debit card.
Acquiring bank: once you have �swiped� the card, the customer�s details are passed to an acquiring bank for processing. The acquiring bank checks the details of the card and authorizes the transaction. The acquiring bank is the bank that provides your merchant service.
Ten steps to setting up offline electronic payment:
Apply to a bank for a merchant service.
Negotiate the costs.
On acceptance, pay the set-up costs.
Receive and install a PDQ machine.
�Swipe� the customer�s card to collect their credit or debit card details.
Wait while the card details are passed to the acquiring bank for approval.
Ask the customer to sign the sales voucher.
Verify the signature and process the payment.
A transaction charge is automatically paid to the bank.
The customer leaves with the goods or service.
For electronic payment in a shop, the customer is present to sign the sales voucher. If the transaction takes place via the phone or the Internet, the customer is not present so there is an increased fraud risk.
Any merchant service (whether offline or online) is provided at the discretion of the financial institution concerned. There are few set rules as to which businesses can and cannot be approved for a merchant service. Be prepared to negotiate the product at a price that suits your needs. There is information in the Costs and Considerations section to help you with this.
Mail-order Traditional card payments take place offline.
Offline Electronic payments are common and need you to have a Merchant Service and PDQ machine from your acquiring bank.
There are ten basic steps to setting up offline payment.
Most high street stores can take offline Electronic payments through their credit and debit card facilities. All banks can process these transactions and some will also process Internet based transactions.
To take offline Electronic payments you usually need to apply for the appropriate facility from your bank. Links to these are provided in the Costs and Considerations section.
Here are some key electronic payment terms to consider:
Merchant service: this is the generic term for the service provided by banks that allow you to �swipe� credit and debit cards at your place of business.
PDQ machine: this generic term for the machine that is used to �swipe� a credit or debit card.
Acquiring bank: once you have �swiped� the card, the customer�s details are passed to an acquiring bank for processing. The acquiring bank checks the details of the card and authorizes the transaction. The acquiring bank is the bank that provides your merchant service.
Ten steps to setting up offline electronic payment:
Apply to a bank for a merchant service.
Negotiate the costs.
On acceptance, pay the set-up costs.
Receive and install a PDQ machine.
�Swipe� the customer�s card to collect their credit or debit card details.
Wait while the card details are passed to the acquiring bank for approval.
Ask the customer to sign the sales voucher.
Verify the signature and process the payment.
A transaction charge is automatically paid to the bank.
The customer leaves with the goods or service.
For electronic payment in a shop, the customer is present to sign the sales voucher. If the transaction takes place via the phone or the Internet, the customer is not present so there is an increased fraud risk.
Any merchant service (whether offline or online) is provided at the discretion of the financial institution concerned. There are few set rules as to which businesses can and cannot be approved for a merchant service. Be prepared to negotiate the product at a price that suits your needs. .
Online Payments
When taking online Payments you need an Internet Merchant Service and a Payment Service Provider to collect card details over the Internet.
A Payment Service Provider acts like a virtual PDQ machine. You can compare Payment Service Providers using our free online payments comparison tool.
Your bank will carry out thorough credit checks and will charge you for this service.
The more transactions you make, the less it will cost you.
All the electronic payment methods we have examined use an Acquiring Bank and Merchant Service to process the transactions. To take online Electronic payments you need to get a specific Internet Merchant Service and also a Payment Service Provider to collect the card details over the Internet. Let�s review these elements.
An acquiring bank: is a high street bank that offers credit and debit card processing services. They acquire the money from the customer, process the transaction and credit your account. You need to apply for a merchant service if you want a bank to handle your Electronic payments (other options are explored later).
Merchant Services fall into three categories:
Standard Merchant Service for use in shops when the customer is present;
Mail-order Merchant Service for customer not present transactions when the customer orders remotely by phone or post / fax;
Internet Merchant Service for transactions generated over the World Wide Web.
Obtaining an Internet Merchant Service from an Acquiring Bank is quicker and easier if you already have �offline� card processing facilities set up with the bank. In this case, just ask your bank for an additional Internet Merchant Service ID for use exclusively with Internet transactions. This process is normally quick, especially if the risk to your business does not change.
If you have no prior card processing the bank will carry out a thorough credit check (lasting anything up to 8 weeks). The delay can make it worthwhile using a Payment Bureau that can be upgraded when the Acquiring Bank application is ready � or when you feel your Internet turnover justifies the slightly higher fixed costs of an Acquiring Bank. Alternatively you could look at Post Paid Account services, some of which remove the need for an Internet Merchant Service ID.
When you obtain multiple merchant numbers for both online and offline, you may need to pay separate set up fees and rent a PDQ swipe machine for customer present transactions. The acquiring bank could charge around �25 per month for this rental. If you are getting a combination of these services negotiate the costs with your provider as they may only charge one set-up fee.
A Payment Service Provider (PSP): is a �virtual� PDQ swipe card machine that collects the card details over the Internet and passes them to the acquiring bank. To take Electronic payments over the web , you will need a PSP at a small cost. Some acquiring banks offer PSP services as part of their product and there are other less expensive options available.
Your choice of PSP will depend on its cost and compatibility with your chosen e-commerce software solution. A fixed monthly fee starts around �10, but there are some cheaper option available starting as low as �0.05 per transaction. Usually, the higher your transaction volume the cheaper the rate you will be charged.
Acquiring Banks
Acquiring banks form an integral part of taking Electronic payments.
The Acquiring bank provides that merchant service that allows you to take card payments via the web or traditional PDQ machine.
The Electronic payments Tool models the costs of acquiring in a generic way in order to give indicative costs of this service.
You can use the links below, in conjunction with your existing banking arrangements, to determine the likely costs of this service.
As previously mentioned, the Acquiring banks are an essential element of taking Electronic payments. If you wish to take card payments directly you will need to apply for a Merchant Service with an Acquiring Bank.
The Electronic payments tool does not advise you directly about which acquiring banks to use as this is a decision that is determined more by your current banking arrangements than individual price or service differences between providers. Acquiring services tend to be offered by the UK banks as an additional service that runs alongside a suite of other services offered by the bank concerned. The banks look on the merchant acquiring service that they sell as one revenue stream of many.
For instance, a low rate for taking card payments may reflect that your bank is generating revenues from you in other respects � a loan interest would be an example. Rates for card processing are for this reason, highly variable and should be considered alongside all your other banking charges. Furthermore, because of complex rules governing the way acquiring banks assess risk (of allowing different businesses to take cards.
Payment bureaus A payment bureau is the easiest way of taking payments online as they do all the work for you.
Bureaus accept most type of business and have a simple application process.
However, they take 30-60 days to clear merchant�s funds and charge more for their service.
A Payment Bureau like Worldpay or Netbanx is a one-stop solution collecting and processing the card details on behalf of the business without requiring an Internet Merchant Service with an Acquiring Bank or a separate PSP to be set up. Their simple application process makes bureau services a popular choice for online payments and an ideal solution for a SMEs first step into e-commerce.
A bureau collects funds via credit or debit cards using ITS OWN acquiring service. The bureau collects money for multiple retailers (tens of thousands of retailers for a large bureau service) to achieve the trading volumes necessary to make the service profitable. The bureaus in the UK will generally accept most types of business with a business bank account and an address that confirms the identity of the business.
A bureau reduces the risk of accepting almost any type of business through one principle mechanism - the bureau holds the collected funds for 30 -60 days (settlement period) in the initial period of accepting a business. There is a cost to this in terms of cash flow to your business and possibly interest charges. You can accurately model these costs using the free online payments comparison tool. as factors such as settlement period and overdraft interest are included in the cost calculations.
As most fraud and refunds occur within the first 30 days after a transaction, this is a very effective means of reducing the exposure of the acquiring service that the bureau uses. In so doing the costs of charge-back recovery are minimized as the bureau can simply refund before the retailer banks the money. Additionally, the bureaus normally charge more for card payments, at least 4% for credit cards and 50pence per transaction for debit cards.
Advantages
These services will accept most types of business
Trading record or length of trading will not usually be an issue
Fast turnaround for applications - a few working days compared to weeks - for a new merchant acquiring applications
Disadvantages
Merchants� funds are held for 30 - 60 days
Transaction charges are higher( 4-8% )
Doing business over the Internet can be daunting but if you enable customers to pay for products online, you can generate actual revenues and make a return on the time and money you have spent developing your website. A bureau service is the simplest way to begin taking payments online.
You can also get the same service from a Post Paid Account provider as they use trusted third parties to bring all elements of the service under one roof. This usually includes all elements of payment management from billing the customer to chasing any late payments
Secure order forms
Although they cost less, online order forms can be time consuming and problematic for customers.
Ensure that your online order form is secure by using a secure server to email customer information, an offline PDQ machine or shopping cart software.
An order form is a simple page on your site that the customer fills in with details of themselves and the goods they want to buy. There is no automation and the fields in the forms are sent to you as an e-mail and do not use a PSP.
As a very basic method of taking orders through your online catalogue this can be very manual and labour intensive. An automatic �buy product� button can take the user to the order form page where product details are already filled in but customers who want to buy separate products need new forms for each one and it soon becomes clear that a simple shopping cart product is more effective.
A simple form is NOT a secure way of collecting card details. To be secure you, the Merchant, must use a secure order form, which uses a secure server to email the customer�s credit card information.
Like the code machines used in World War Two, a secure server encrypts the message making it hard for criminals to decipher (and steal) credit card information.
An offline PDQ swipe machine, available for a small cost, will enable you to process the credit card details when you receive them.
A slightly more advanced option is available by using a shopping cart software product as most carts have the ability to either store credit card numbers securely so you can view them over the Internet or send them securely over e-mail. By making use of an existing merchant account, payments can be processed by using a PDQ swipe card machine or by old -fashioned credit card slip.
Advantages:
Secure forms require a minimal outlay
Avoid paying for a Payment Service Provider facility.
Avoid an extra internet merchant number for online transactions
Merchants can manually screen orders as they come in and reject risky transactions
Site superficially appears to be fully credit/debit card enabled
Disadvantages:
Secure forms have limited use for more than one product on your site.
Some bank acquiring services disapprove of merchants using an offline merchant number for Internet transactions so the merchant may be in breach of their acquiring bank�s terms and conditions.
There is no �live� authorization of card details so incorrect details will still appear to have been accepted. Contact (by telephone) may then be necessary.
Transactions are processed manually - time consuming.
BACs BACS is ideal for making regular automated payments to repeat customers.
It helps those who are making more than 150 monthly payments to manage cash flow.
It reduces the likelihood of human error.
This payment method is ideally suited to business-to -business (b2b) transactions with regular or repeat customers. It is already used to pay over 70 per cent of salaries of the UK workforce. BACS payments are usually processed as batches using dedicated software linked in with the banks system. Currently these payments can be facilitated directly through a business bank via a �file� of transactions or via dedicated software that links to the bank accountmaking the payment.
The advantages of BACS
Regular automated payments
Reduces time and cost of administering bulk payments
Helps manage cash flow and improve financial control
Reduces risk of loss, late payment and theft for customers
At the enterprise level, BACS can be integrated with an e-commerce b2b purchasing system to allow automated settlement of accounts between organizations.
Benefits:
As the BACS process is electronic, it removes the need to write cheques, which can be a costly process, subject to human error. Payments can be made much later in a business day, up to 9pm and are cleared within two business days to any bank account.
The payment method is suitable for customers who are making more than 150 monthly payments
Five reasons why Electronic payments improve customer service � the five �Cs�
Choice � like your competitors, you can offer a wide range of payment options
Convenience � they remove the need for invoices, cheques, cash and BACs
Credit � they may allow purchases that would otherwise be delayed
Concessions � small discounts to encourage online purchases improve the perception of value
Competitive Edge - if you don�t offer the full range of payment options but your competitors do, what does this say about your business?
Five reasons why Electronic payments increase profitability
Convenience � removing administrative resources required by invoices, cheques and cash
Immediacy � credit cards enable instant purchasing (without delay)
Improved cash flow � payment at the time of purchase reduces the pressures caused by 30-day invoicing
Growth � open additional payment channels via the phone, mail order and Internet and increase your customer base. More customers mean more revenue.
Competitive advantage � match and beat the services of your competitors and gain the edge
The following sections explain the processes, costs and risks behind electronic payment systems.
Methods
Electronic payment methods may be costly and challenging but they will give you the competitive edge.
Different payment systems include traditional card payments, mail order, online payments, payment bureaus, secure order forms, BACs alternative payment options and no payment option.
Receiving Electronic payments incurs extra costs. When you pay for a good or service in a shop using a credit or debit card the retailer must pay a commission to the financial institution processing the card details; additionally there will be operating costs for the system used to process the cards.
These systems are often costly, challenging to implement and sometimes technically difficult to understand. These hurdles represent a �barrier to entry� , which, if overcome, can give you the competitive edge.
Electronic business is real and continues to grow as a medium with over 44% of UK adults having used the Internet to order tickets, goods or services (Office of National Statistics, 2002). This website and its diagnostic tool give you impartial and informed information to make the right choices for your business and help push your revenues and the UK economy forward in the digital age.
There are several approaches to taking Electronic payments. All of these types of payment systems can be compared by trying the Electronic payments comparison tool. Some of them can co-exist with others and some are mutually exclusive.
Traditional Card Payments Traditional card payments take place offline.
Offline Electronic payments are common and need you to have a Merchant Service and PDQ machine from your acquiring bank.
There are ten basic steps to setting up offline payment.
Most high street stores can take offline Electronic payments through their credit and debit card facilities. All banks can process these transactions and some will also process Internet based transactions.
To take offline Electronic payments you usually need to apply for the appropriate facility from your bank. Links to these are provided in the Costs and Considerations section.
Here are some key electronic payment terms to consider:
Merchant service: this is the generic term for the service provided by banks that allow you to �swipe� credit and debit cards at your place of business.
PDQ machine: this generic term for the machine that is used to �swipe� a credit or debit card.
Acquiring bank: once you have �swiped� the card, the customer�s details are passed to an acquiring bank for processing. The acquiring bank checks the details of the card and authorizes the transaction. The acquiring bank is the bank that provides your merchant service.
Ten steps to setting up offline electronic payment:
Apply to a bank for a merchant service.
Negotiate the costs.
On acceptance, pay the set-up costs.
Receive and install a PDQ machine.
�Swipe� the customer�s card to collect their credit or debit card details.
Wait while the card details are passed to the acquiring bank for approval.
Ask the customer to sign the sales voucher.
Verify the signature and process the payment.
A transaction charge is automatically paid to the bank.
The customer leaves with the goods or service.
For electronic payment in a shop, the customer is present to sign the sales voucher. If the transaction takes place via the phone or the Internet, the customer is not present so there is an increased fraud risk.
Any merchant service (whether offline or online) is provided at the discretion of the financial institution concerned. There are few set rules as to which businesses can and cannot be approved for a merchant service. Be prepared to negotiate the product at a price that suits your needs. There is information in the Costs and Considerations section to help you with this.
Mail-order Traditional card payments take place offline.
Offline Electronic payments are common and need you to have a Merchant Service and PDQ machine from your acquiring bank.
There are ten basic steps to setting up offline payment.
Most high street stores can take offline Electronic payments through their credit and debit card facilities. All banks can process these transactions and some will also process Internet based transactions.
To take offline Electronic payments you usually need to apply for the appropriate facility from your bank. Links to these are provided in the Costs and Considerations section.
Here are some key electronic payment terms to consider:
Merchant service: this is the generic term for the service provided by banks that allow you to �swipe� credit and debit cards at your place of business.
PDQ machine: this generic term for the machine that is used to �swipe� a credit or debit card.
Acquiring bank: once you have �swiped� the card, the customer�s details are passed to an acquiring bank for processing. The acquiring bank checks the details of the card and authorizes the transaction. The acquiring bank is the bank that provides your merchant service.
Ten steps to setting up offline electronic payment:
Apply to a bank for a merchant service.
Negotiate the costs.
On acceptance, pay the set-up costs.
Receive and install a PDQ machine.
�Swipe� the customer�s card to collect their credit or debit card details.
Wait while the card details are passed to the acquiring bank for approval.
Ask the customer to sign the sales voucher.
Verify the signature and process the payment.
A transaction charge is automatically paid to the bank.
The customer leaves with the goods or service.
For electronic payment in a shop, the customer is present to sign the sales voucher. If the transaction takes place via the phone or the Internet, the customer is not present so there is an increased fraud risk.
Any merchant service (whether offline or online) is provided at the discretion of the financial institution concerned. There are few set rules as to which businesses can and cannot be approved for a merchant service. Be prepared to negotiate the product at a price that suits your needs. .
Online Payments
When taking online Payments you need an Internet Merchant Service and a Payment Service Provider to collect card details over the Internet.
A Payment Service Provider acts like a virtual PDQ machine. You can compare Payment Service Providers using our free online payments comparison tool.
Your bank will carry out thorough credit checks and will charge you for this service.
The more transactions you make, the less it will cost you.
All the electronic payment methods we have examined use an Acquiring Bank and Merchant Service to process the transactions. To take online Electronic payments you need to get a specific Internet Merchant Service and also a Payment Service Provider to collect the card details over the Internet. Let�s review these elements.
An acquiring bank: is a high street bank that offers credit and debit card processing services. They acquire the money from the customer, process the transaction and credit your account. You need to apply for a merchant service if you want a bank to handle your Electronic payments (other options are explored later).
Merchant Services fall into three categories:
Standard Merchant Service for use in shops when the customer is present;
Mail-order Merchant Service for customer not present transactions when the customer orders remotely by phone or post / fax;
Internet Merchant Service for transactions generated over the World Wide Web.
Obtaining an Internet Merchant Service from an Acquiring Bank is quicker and easier if you already have �offline� card processing facilities set up with the bank. In this case, just ask your bank for an additional Internet Merchant Service ID for use exclusively with Internet transactions. This process is normally quick, especially if the risk to your business does not change.
If you have no prior card processing the bank will carry out a thorough credit check (lasting anything up to 8 weeks). The delay can make it worthwhile using a Payment Bureau that can be upgraded when the Acquiring Bank application is ready � or when you feel your Internet turnover justifies the slightly higher fixed costs of an Acquiring Bank. Alternatively you could look at Post Paid Account services, some of which remove the need for an Internet Merchant Service ID.
When you obtain multiple merchant numbers for both online and offline, you may need to pay separate set up fees and rent a PDQ swipe machine for customer present transactions. The acquiring bank could charge around �25 per month for this rental. If you are getting a combination of these services negotiate the costs with your provider as they may only charge one set-up fee.
A Payment Service Provider (PSP): is a �virtual� PDQ swipe card machine that collects the card details over the Internet and passes them to the acquiring bank. To take Electronic payments over the web , you will need a PSP at a small cost. Some acquiring banks offer PSP services as part of their product and there are other less expensive options available.
Your choice of PSP will depend on its cost and compatibility with your chosen e-commerce software solution. A fixed monthly fee starts around �10, but there are some cheaper option available starting as low as �0.05 per transaction. Usually, the higher your transaction volume the cheaper the rate you will be charged.
Acquiring Banks
Acquiring banks form an integral part of taking Electronic payments.
The Acquiring bank provides that merchant service that allows you to take card payments via the web or traditional PDQ machine.
The Electronic payments Tool models the costs of acquiring in a generic way in order to give indicative costs of this service.
You can use the links below, in conjunction with your existing banking arrangements, to determine the likely costs of this service.
As previously mentioned, the Acquiring banks are an essential element of taking Electronic payments. If you wish to take card payments directly you will need to apply for a Merchant Service with an Acquiring Bank.
The Electronic payments tool does not advise you directly about which acquiring banks to use as this is a decision that is determined more by your current banking arrangements than individual price or service differences between providers. Acquiring services tend to be offered by the UK banks as an additional service that runs alongside a suite of other services offered by the bank concerned. The banks look on the merchant acquiring service that they sell as one revenue stream of many.
For instance, a low rate for taking card payments may reflect that your bank is generating revenues from you in other respects � a loan interest would be an example. Rates for card processing are for this reason, highly variable and should be considered alongside all your other banking charges. Furthermore, because of complex rules governing the way acquiring banks assess risk (of allowing different businesses to take cards.
Payment bureaus A payment bureau is the easiest way of taking payments online as they do all the work for you.
Bureaus accept most type of business and have a simple application process.
However, they take 30-60 days to clear merchant�s funds and charge more for their service.
A Payment Bureau like Worldpay or Netbanx is a one-stop solution collecting and processing the card details on behalf of the business without requiring an Internet Merchant Service with an Acquiring Bank or a separate PSP to be set up. Their simple application process makes bureau services a popular choice for online payments and an ideal solution for a SMEs first step into e-commerce.
A bureau collects funds via credit or debit cards using ITS OWN acquiring service. The bureau collects money for multiple retailers (tens of thousands of retailers for a large bureau service) to achieve the trading volumes necessary to make the service profitable. The bureaus in the UK will generally accept most types of business with a business bank account and an address that confirms the identity of the business.
A bureau reduces the risk of accepting almost any type of business through one principle mechanism - the bureau holds the collected funds for 30 -60 days (settlement period) in the initial period of accepting a business. There is a cost to this in terms of cash flow to your business and possibly interest charges. You can accurately model these costs using the free online payments comparison tool. as factors such as settlement period and overdraft interest are included in the cost calculations.
As most fraud and refunds occur within the first 30 days after a transaction, this is a very effective means of reducing the exposure of the acquiring service that the bureau uses. In so doing the costs of charge-back recovery are minimized as the bureau can simply refund before the retailer banks the money. Additionally, the bureaus normally charge more for card payments, at least 4% for credit cards and 50pence per transaction for debit cards.
Advantages
These services will accept most types of business
Trading record or length of trading will not usually be an issue
Fast turnaround for applications - a few working days compared to weeks - for a new merchant acquiring applications
Disadvantages
Merchants� funds are held for 30 - 60 days
Transaction charges are higher( 4-8% )
Doing business over the Internet can be daunting but if you enable customers to pay for products online, you can generate actual revenues and make a return on the time and money you have spent developing your website. A bureau service is the simplest way to begin taking payments online.
You can also get the same service from a Post Paid Account provider as they use trusted third parties to bring all elements of the service under one roof. This usually includes all elements of payment management from billing the customer to chasing any late payments
Secure order forms
Although they cost less, online order forms can be time consuming and problematic for customers.
Ensure that your online order form is secure by using a secure server to email customer information, an offline PDQ machine or shopping cart software.
An order form is a simple page on your site that the customer fills in with details of themselves and the goods they want to buy. There is no automation and the fields in the forms are sent to you as an e-mail and do not use a PSP.
As a very basic method of taking orders through your online catalogue this can be very manual and labour intensive. An automatic �buy product� button can take the user to the order form page where product details are already filled in but customers who want to buy separate products need new forms for each one and it soon becomes clear that a simple shopping cart product is more effective.
A simple form is NOT a secure way of collecting card details. To be secure you, the Merchant, must use a secure order form, which uses a secure server to email the customer�s credit card information.
Like the code machines used in World War Two, a secure server encrypts the message making it hard for criminals to decipher (and steal) credit card information.
An offline PDQ swipe machine, available for a small cost, will enable you to process the credit card details when you receive them.
A slightly more advanced option is available by using a shopping cart software product as most carts have the ability to either store credit card numbers securely so you can view them over the Internet or send them securely over e-mail. By making use of an existing merchant account, payments can be processed by using a PDQ swipe card machine or by old -fashioned credit card slip.
Advantages:
Secure forms require a minimal outlay
Avoid paying for a Payment Service Provider facility.
Avoid an extra internet merchant number for online transactions
Merchants can manually screen orders as they come in and reject risky transactions
Site superficially appears to be fully credit/debit card enabled
Disadvantages:
Secure forms have limited use for more than one product on your site.
Some bank acquiring services disapprove of merchants using an offline merchant number for Internet transactions so the merchant may be in breach of their acquiring bank�s terms and conditions.
There is no �live� authorization of card details so incorrect details will still appear to have been accepted. Contact (by telephone) may then be necessary.
Transactions are processed manually - time consuming.
BACs BACS is ideal for making regular automated payments to repeat customers.
It helps those who are making more than 150 monthly payments to manage cash flow.
It reduces the likelihood of human error.
This payment method is ideally suited to business-to -business (b2b) transactions with regular or repeat customers. It is already used to pay over 70 per cent of salaries of the UK workforce. BACS payments are usually processed as batches using dedicated software linked in with the banks system. Currently these payments can be facilitated directly through a business bank via a �file� of transactions or via dedicated software that links to the bank accountmaking the payment.
The advantages of BACS
Regular automated payments
Reduces time and cost of administering bulk payments
Helps manage cash flow and improve financial control
Reduces risk of loss, late payment and theft for customers
At the enterprise level, BACS can be integrated with an e-commerce b2b purchasing system to allow automated settlement of accounts between organizations.
Benefits:
As the BACS process is electronic, it removes the need to write cheques, which can be a costly process, subject to human error. Payments can be made much later in a business day, up to 9pm and are cleared within two business days to any bank account.
The payment method is suitable for customers who are making more than 150 monthly payments