In the life of a starting business there is always a point in time where we are forced to start accepting credit cards as a online payment option. The current financial situation in the US pushed many small business who are engaged with retail merchandising to consider the vast international market as an alternative revenue stream. This increasing trend formed a boom in online credit card payment processing services.
Unlike regular banking, online payments require a lot of credit card fraud verification to be performed on each individual transaction because of the extremely high fraud rates due to credit card number thefts. It seems that depending on the particular type of products sold, retail merchandise turns out about 5% up to 10% fraudulent orders and up to 25% up to 30% for online orders. Due to those extremely high fraud rates and the damages caused to both credit card processor and merchant is much greater, therefore the service charges for online credit card payment processing is considerably higher than in retail credit card-present processing.
Payment Gateway service providers usually accept only VISA, MasterCard, American Express and Discover card networks, but some of them can have more options including smaller local credit card companies. In general, VISA and MasterCard are the two largest ones since they charge the Lowest Credit Card Discount Rates from 2% up to 5% discount (note: varies with different payment gateway providers). Accepting American Express cards is a bit costly since they charge 4% up to 8% percent of the whole amount processed when the card is not present. Note that all payment gateways who offer both point-of-sale terminals as well as online merchant accounts have different fee structures depending if the card was present (high legitimacy of the purchase assuring less possible fraud level) or not (in case it was typed in by someone who’s identity can not be confirmed easily to be the actual credit card owner). Therefore you are required to do much research and predict your future needs so that you don’t get overcharged with service fees.
This website is dedicated to Online Credit Card Payment Processing as we explore many different online payment processing problems and their solutions.
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