Accepting credit card orders online

Credit cards have changed the way business is conducted online. If you are not offering a credit card payment option on your site, you will undoubtedly be losing sales. Fortunately, however, accepting payments by credit card online is easier than you might think.

The advantages of processing orders by credit card

Offering customers the option to purchase your software using their credit card has many advantages over traditional payment methods:

• The rate of impulse buying is increased: Compared to other payment methods such as sending a money order by mail, filling out credit card details online requires little time and effort. Customers will therefore complete the ordering process more quickly. The faster the ordering process, the more likely the customer will complete the purchase.
• Immediate online delivery: Customers want to use your products straight away. Processing and fulfilling online credit card orders in real-time means that you could give customers the option to activate your software as soon as they complete their purchase and start using it straight away. Customers are often more willing to purchase software that they can activate immediately upon completion of their order rather than having to wait for their order to be delivered.
• Less work: Processing credit card orders online is instantaneous and generally completely automated. This means less work for both the customer (who only needs to fill out an online form as opposed to printing, filling out and mailing a postal order form) and you (not having to process offline orders).
• Less expense: The automated nature of online credit card transactions means that the entire ordering and delivery process is completely automated - meaning you and your staff don't need to do any work to process orders themselves.

Accepting credit card payments

Setting up your website to accept credit card payments can be achieved in two ways: you can either establish your own merchant account with your bank or outsource the ordering process to a reputable third party order processing provider.

Most shareware software publishers choose to outsource the ordering process while others prefer to process payments themselves. The option you choose will ultimately depend on your specific requirements and expectations.

Option 1: Setting up our own merchant account

Most banks give their business customers the option of setting up a merchant account. Merchant accounts let you accept credit card transactions directly. Various merchant account types are usually available: merchant accounts that use a physical card terminal (in the case of an offline retailer), merchant accounts for accepting credit card details over the phone or by mail and merchant accounts that can accept orders over the Internet.

Although some larger software publishers may require all three types (for customers visiting the publisher's offices, placing credit card orders by phone/mail, and over the Internet), most software publishers who decide to set up their own merchant account will only require a merchant account for accepting orders online.

Some banks offer merchant account holders an integrated system in which credit card details are taken and processed directly on the bank's servers. This requires less work on your part to integrate the ordering process but it decreases the amount of "branding" and customisation that is possible on the ordering forms. Other types of online merchant will allow sellers to accept orders directly from their website. This may require complicated programming, as well as requiring the seller to demonstrate that their Web server is secured both physically (eg: from tampering at the location where the server is stored) and from electronic threats (eg: hacking).

Merchant account holders often benefit from lower fees per transaction compared to sellers using a third party order processing provider (discussed further below).

In addition to the work and knowledge required to set up and maintain a merchant account, various other disadvantages and limitations result in most software publishers choosing to use a third party order processing provider instead (see the section below).

Option 2: Outsourcing order processing

Using a third party order processing provider to accept and fulfil offers several advantages over having your own merchant account. The main benefits include:

• Reduced fraudulent order risk: Many large order processing providers use their own comprehensive anti-fraud screening technology which offers additional protection to help reduce the risk of fraudulent orders.
• Increased security: Reputable order processing companies are able to operate highly secured networks and ordering servers.
• Reliability: Making a good impression to customers is vital to maximise sales. Using an order processing provider will help ensure you ordering forms are almost always online. In contrast, if you were to process your own orders and your ordering server fails, it might take you several hours to bring it back online.

Many order processing providers will accept various forms of payment ranging from credit cards to cheques and invoices - making them an all-in-one solution for accepting payments. Some even offer a 24 hour phone ordering service.

Specialised order processing providers for software publishers

Several order processing providers, such as RegNow, specialise in processing orders on behalf of software publishers. In addition to accepting payments from customers, these specialised can also offer advanced order fulfilment options such as generating custom registration codes from an algorithm you supply or even providing download URLs to customers that expire after a certain number of days.

Choosing the method that is right for you

All software publishers have different requirements and expectations from their order fulfilment systems. This article has provided you with a brief overview of just some of the options that are available. Choosing the option that's right for you will take a lot of thought and it is always a good idea to seek expert advice for the specific requirements of your business.

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