Are you scratching your head and wondering how you can accept payments for your product? How will you accept cash from a customer across the country? How can you process credit or debit cards? What are the risks involved?
You should be considering how you will sell your idea in an online marketplace such as eBay or Amazon or, if you are going to sell your product directly on your own website. If you choose to sell on a marketplace website, you have little to worry about in terms of accepting credit card details as all of this is built into the site itself.
By accepting credit card payments, you are taking full advantage of impulse buyers who pervade the market. If someone sees your product, loves it and is willing to spend the asking price, then you need to be able to take the credit card details and process the payment quickly and efficiently. Impulse buyers are exactly that, impulsive; they want to buy now rather than later to avoid potential second thoughts regarding their purchase.
Set up your own Merchant account
If you want to process payments yourself, you will need to find a bank that will allow you to open a merchant account. The bank will then provide you with the means to be able to accept payments online or over the phone, making transactions hassle free and easy to track.
Apply through a third party Merchant
Typically known as “payment gateways,” there are a variety of companies willing to accept payments for you in exchange for a small fee. These gateways take responsibility for processing payments on your behalf, acting as a middleman between you and the consumer. These companies often offer peace of mind as their reputation is generally based on their excellent customer service and ease of use, both of which go very far in ensuring customer satisfaction and retention.
There is an initial cost when you open a merchant account with a bank, which is typically a higher fee than a third party merchant. Usually, third party merchants do not charge a set-up fee; however, charges are accrued when individual payments are processed through the service itself.
Having your own merchant account is advantageous because the individual transaction fees are smaller than those charged by most third party merchants.
On the other hand, if you are utilizing a third party merchant and your product does not sell, then you have wasted money on set-up fees. However, despite this potential loss, a third party merchant is ideal for testing the market. Overall, most prefer to use third party merchants because all processing is handled through a trusted company, making the process generally stress-free for all involved.
Consider all options before making your decision. Weigh both the advantages and disadvantages in terms of service, ease of use and cost. In addition, compare the fees associated with set-up and individual transactions based on your potential marketability and sales as one method may be cheaper in the long run.