You have a good product or service, you have a small client or customer base, how do you take the next step and begin accepting money online?
The first step is to get your banking in order. This is the foundation of accepting money online as well as making it easy to do reporting, taxes, and a lot of other financial juggling. At minimum, you will eventually need to know your routing number and any restrictions your bank may place on Internet transactions (deposits), or any fees they might charge.
The next step is to choose a payment processor. This is typically where a lot of businesses stumble on their way to taking money online. A payment processor is the middle-man between your client and your bank. They are the ones who take the credit card information, the sales amount, make sure the card or payment method is good, authorize the transaction, and send your money on its way to your bank account. A common payment processor is PayPal, however there are many different payment processors available. Each payment processor will have different services, costs, and policies on how they will accept transactions. They will also have different ways that your website or online presence will need to interact with them to accept payments. Some banks have dedicated payment processing for business clients. All payment processors charge some type of fee for this service. The fee is usually a percentage of the sale, 2.9% or so for PayPal, as well as a per transaction fee, $.30 (thirty cents) or so per transaction for PayPal. Make sure you understand these fees and how they will affect your bottom line.
The final piece in the puzzle is the website or online presence. The first and most important part of a website which accepts payments is that no information is sent without SSL. SSL or Secure Socket Layer is usually shown in the browser by some sort of gold key or green icon or some identifier noting that the page is “secure”. What this means is that the data that the client is entering is encrypted as it is sent to the payment processor and can not be intercepted by someone who happens to be “sniffing” or listening in on that communication. Never enter payment or personal identification into a website which is not “secure” and never allow your customers to do so on your website.
Your website also has to allow for your client to select items or services and pay for them. This can be as easy as a link to pay, but usually comes in the form of a shopping cart. There are many different shopping carts available, some are free, some cost money. Each shopping cart will provide a way to connect to payment processors and allow you to enter your products or services and their costs. The shopping cart also handles the client experience of shopping on your website, adding items to their cart, and checking out. When a client finishes their purchase on your website, the information is passed to the payment processor. The payment processor then accepts or denies the transaction and transfers the money (in the case of an accepted transaction) to your bank account, usually in 3 days or so, depending on your processor.
With these readily available pieces, you can take your small business to the next level and begin taking payments online.