Taking payments directly through your website is the ultimate goal of any true eCommerce business. While there is certainly a lot to consider on getting there, it needn't be a complete mystery.
Handling credit and debit card payments online through your website requires that you have an internet merchant account (IMA) – either directly from an acquiring bank or one provided through a bureau service. Before applying for one of these, it's useful to understand what criteria your business and website will need to fulfil.
Getting a merchant account
Acquiring banks have varying criteria for IMA acceptance and although payment bureaus won't go into the same level of detail (aside from criteria such as industry sector), to be successful in your application, you will be asked by both for some if not all of the following:
- Certified identification. For example, a copy of your passport signed by a lawyer, doctor, police etc. You'll also need details of the directors or partners in the business.
- Your financial accounts. Up to two years audited business accounts and trading history. The more you can provide in terms of financial statements, the better prospects for an application. If you're a start-up business without a great deal of financial/transaction history, you may have to use a processer specialising in this area (which will be reflected in the charges).
- Your business plan. Your provider needs to know about your business, your products and your customers. Having an up-to-date business plan is always a good idea however this document does not need to be hundreds of pages long. In fact, four or five pages of focused information on the business, products or services, target customers, the marketing/promotion plan, delivery and customer service etc is usually enough.
As always keep your business plan or model simple and to the point:
- Details of your products or service. Provide a short, detailed description of your business and what you plan to sell.
- Suppliers' details. Who are the companies supplying your products? What country are they coming from? Do these suppliers comply with legislation (eg local and/or EU)?
- How you will deliver your product or service. The way a customer will use you product. Eg consumer items like electronic goods or clothing, gym memberships, holidays or vehicle servicing. Also, how will the purchase journey take place (online or MOTO).
- Product fulfilment. How long customers will wait for fulfilment of their order after payment is taken (eg selling CDs – seven days. Holiday package – six months).
- Transaction details. Estimated average online transaction values, estimated turnover from online sales and predicted number of credit and debit card transactions.
- Subscription or recurring payments. Outline the frequency of the expected transactions and the percentage these will make up of your overall estimated transaction amount.
- Bank details. Your current account details and an authority to allow a check with credit reference agencies.
- Website details. Your site url, complete with terms and conditions, and contact details all visible (see below).
- Details of the secure server you'll use. Card details must be captured, encrypted and stored securely. See your website develop for details of the security measures in place on your site.
Making sure your website is ready
To take payments from the website, the provider will want to ensure your website is robust, secure and all issues known to affect complaints, disputes and ultimately payment cancellations, are minimised:
- Terms and conditions
Your terms and conditions should be clearly visible on the website, including your cancellation, return and refund policies.
Customers must be able to 'click to accept' your terms and conditions before payment is taken.
- Contact information
Full contact details should be available on your website and must include:
- Email address or contact form.
- Telephone number.
- Legal/trading address (PO Box addresses will not be sufficient).
- The full legal name of your business must be listed somewhere on the site.
- Card scheme logos
You should display the logos of the cards accepted by your business as well as the security formats they employ. Eg VISA, Mastercard, Verified by Visa etc.
The prospective account provider will also verify your website by conducting tests on the order journey and billing process.
The test includes:
- Placing goods in the shopping cart (they type of shopping cart integration you use will also be checked – refer to your web developer for clarification).
- Order summary details.
- Entering customer/delivery details.
- Verifying the order journey to the point of payment.
- If your site is under development, you'll need to provide log-in details to any trial site.
Why your application may fail
Some of the common reasons your application for an IMA could be declined.
Some business are considered high-risk and will have difficulty in obtaining IMAs (electronic-payments features specialist providers for these sectors).
High risk sectors include:
- Adult entertainment and products
- Holiday firms
- Gyms and clubs
Your domain name
There are risks associated with domain name ownership and any redirection that takes place during the payment process as this technique is also used by fraudulent website operators. Check with your payment service provider before submitting your application.
Transaction volume and chargeback
Your business may attract high numbers of chargebacks (when a customer is refunded). If this is the case you may be asked to put up a reserve of cash to off-set any potential risk to the IMA provider.
If the account provider is unable to contact you on numerous occasions then they will wonder why – if you are supposed to be in business. Be available, and if you are asked to provide further information make sure you do so within agreed timescales.
If you are declined, it needn't be terminal to your business. It could be due to the time you have been in business – so you'll be able to reapply once you have a longer trading history.
If you are turned down for and IMA for any reason, you will have to use a company that provides the service on your behalf. Going down this route will let you trade online quicker, but the charges for transactions will be higher and you may have to provide deposits.
Remember. You will NOT be able to access any online or electronic payments products until you have fulfilled the requirements of your IMA account provider – whether you deal direct or go through an all-in-one service.
For detailed information on setting up an eCommerce website, download our free guide