Online Credit Card Transactions

Deciding which method of accepting online credit card transactions you should choose depends on your needs. To help you decide, we have a great article about online credit card payments.

When you will have online credit card transactions of more than $1000 a month, then instead of using PayPal or Google Checkout you can consider getting your own account to accept credit card payments on your own web site. We are an authorized dealer for the low cost solution from one of the largest credit card processing firms, Authorize.net, now part of Cybersource, a very large online merchant bank. Visa announced in April, 2010 they are acquiring Authorize.net and Cybersouce, which will continue to accept MasterCard, Discover, and American Express in addition to Visa.

To apply for an account or simply see the current fees for having your own credit card processing on your web site, please visit our page at Authorize.net.

More about Online Credit Card Transactions

In order to take online payments you are required to have the following:

  1. A payment gateway, Authorize.net, which validates payments by credit card or e-check
  2. A merchant bank account, which is a separate bank account into which only funds from the credit card transactions are deposited so they can be easily audited. From this account you can electronically transfer the funds to your regular business checking account.

Note: You cannot use the same gateway and merchant bank account you have in your physical store or business to take online payments. Firms require setting up a second account and the cost to take online payments are higher, because online is considered riskier than accepting a credit card in person and swiping the card through a machine. Online payments (sometimes called MOTO for mail order telephone order) cost 2.19% of the transaction amount, whereas “card present” payments swiped through a credit card machine cost about 1.6%.

Authorize.net, which is the largest gateway service, was bought out by merchant bank provider Cybersource, and in April 2010 Visa announced it is buying them. We recommend this payment service not because it’s the biggest, but because it’s one of the cheapest ways for our clients to take online payments, cheaper than using your local bank or another online provider.

The current fees are shown on the first page of the online application that lets you apply for just a payment gateway or both a payment gateway and merchant bank account. In 2010 altogether, you’ll pay about $28 a month in fixed fees, plus .35 a transaction and 2.19% of the amount charged.

Before you sign up online, you can review these PDF copies of the application forms so you know what information to have on hand:

When completing the online application you need to sign up for payment gateway, and a merchant bank account. The payment gateway is usually approved within a day, and the merchant bank account within 3-5 days, so you need to apply at least a week before you expect to take online payments.

You do NOT need to sign up for these options if you are running a typical online store or taking typical payments:

  • automated recurring billing
  • advanced fraud detection
  • customer information manager

When you do your online application you can optionally sign-up for e-check service if you want to allow people to pay by check online. A second application will be required since this involves the ACH network (view an e-check paper application copy) . E-check requires an additional monthly fee (usually $6.95 or $9.95 depending on how they judge your viability) but e-checks are only charged about 1.6% of the transaction so it’s cheaper for customers to pay with checks than credit cards.

Managing your Authorize.net account

You can download the Authorize.net User Manual.

  • You can have several people involved with your company establish user ids and passwords to log into your Authorize.net and Cybersource accounts to monitor transactions and balances and see reports.
  • In that interface you can manually charge new payments or refund payments if needed, such as if someone calls you by phone with their payment info.
  • You can also download all the financial transactions into QuickBooks or a spreadsheet.

Usually there is also a complete record of financial records within your website, tied to each user’s profile, plus summary reports of revenues collected, so reports in the website can be audited against the Authorize.net account reporting.

Setting Up Online Payments on your Web Site

Once your application is approved, you will receive a user name and password to log in as a merchant at Authorize.net. You will then add us as a developer account so we can do the following:

  • Log into your account to generate the security keys we need to install in your web site so online payments are authenticated
  • Run test transactions to make sure everything is working, before we turn on online payments for the public

Accepting SSL Secure Payments using HTTPS://

  • If we build your web site within Adobe Business Catalyst, you already have the security needed to take secure online transactions.
  • If we build a regular web site or a site within WordPress or another development platform, then you are required to pay $29.95 a year for an SSL certificate so your site can have an https:// secure page to collect the customer’s credit card info. We’ll sign you up for a discount SSL certificate.