For years I was using a 3rd party service to accept credit cards for software purchases. This was a good idea at first because it allowed me to get off and running quickly in creating the software and not worrying so much about the sales, processing side of things. The problem is that these third party companies tend to charge 10%-15% or more per transaction. Lower priced alternatives such as Paypal, Google Payments and others offer a lower cost alternative but they divert the user experience away from your website.
I wanted a simple credit card solution that was also low cost. I reasearched a lot of companies. Overall the credit card industry is fairly confusing and you'll have to get accustomed to the different players.
- The credit card company
- The processor (also known as the bank) actually handles the money and talks to the credit card companies
- The gateway is the electronic transaction company that provides services to talk to the bank and accepts data
- You -You're probably farmiliar with yourself
- Your customers
The process is overly complex and unfortunatly you get charged allong the path of most of these transactions. Credit cards will charge 2-4%, the processor will charge a monthly fee and the gateway will charge a per-transaction fee. Many of the companies may also charge multiple monthly fees.
The company I went with is called E-Online Data they offer good rates, minimal fees and a fairly complete integration package with Authorize.net (an electronic gateway) and best of all they offer the ability to allow clients to accept credit card accounts. This is great because your clients or customers still get the same credit card rates but you get to collect a small percentage of the monthly fees that usually go to the credit card companies. This means you can save your customers money while taking a slice away from the credit card companies.
I had previously used a company called Esellerate to process the bulk of my payments and after moving to E-online data I saw my conversion rates go up by about 30%. The reason is simple. Many of these credit card processors spend a large percentage of time worrying about the data and much less time figuring out a simple checkout process. By moving away from a 3rd party solution and designing the checkout process myself I could reducing the checkout process from three pages down to one page,
If you're doing credit card processing through a third party like Esellerate, RegNow or many of the others consider doing it yourself. It does take a little more time but if done right it can be worth it.