Payment Systems

It is important to put appropriate payment systems in place not only to facilitate the transaction but as a key element of the marketing process. While it cannot be proved, there is a broad consensus that if you cannot accept credit cards you may lose a large proportion of your potential sales (some say up to 80% - admittedly they may have ambitions to sell you a merchant account!

Two examples from personal experience. I visited a website which enables you to make free banner ads online. The banners are free but if you want to customise them a little more than the free version allows, you can pay a small amount by credit card ($9.95) to get immediate access for 30 days to a tool which allows you to do that customisation. The words I wanted to put on the banner wouldn't quite fit so I needed to use a smaller font. I impulse bought! I could have saved $9.95 by playing around with the wording until I succeeded in making the free model get my message across. But it didn't cost much, it offered an instant solution and they made it really easy to buy! Would this work for you?

Second example: Surfing for gifts, I visited a site maintained by a genuinely talented poet who offers to write an original poem for your wife's birthday, the birth of your baby, or any special occasion! You give him some details and he does the rest, beautifully. He gets it printed on quality vellum, mounted in a good frame, and ships it to you. There are some examples on the site - they're nice. A most original gift. I was ready to go for it. But! He lives in Louisiana, he does not accept credit cards - but you can mail him a cheque. Well you can if you like, but not me! He lost a $200 transaction with me, and who knows how many more? Is your business suffering because you don't accept credit cards?

It stands to reason that people who prefer to buy online very often prefer to pay online. Despite the fact that you will still hear stories about the reluctance of many people to put their credit card numbers on the web for fear of fraud, the excellent encryption and security systems continue to improve and most serious vendors are now offering secure connections. Ultimately there can be no guarantee of total security but given a choice between paying a reputable company via a secure connection on the web and giving my card to a waiter in a restaurant who takes it to some back room for a few minutes, I know which option I think is the more secure. Yet I never worry about the waiter, nor about phoning my card number through for theatre tickets and, (touch wood!), I've not had a problem in the 25 years I've had a credit card. While there are still a few incorrigible souls out there trying to develop special internet currencies and alternative payment systems, Artefact takes the view that the mainstream credit/charge cards will prevail and given a little more time the population in general will become progressively less worried about using cards to make online purchases.

Vendors have more reason to be worried than customers. Visa International recently revealed that the fastest growing area of credit card fraud they encounter is internet fraud and that it is primarily perpetrated by card holders (apparently many people have second thoughts and claim that they never made that impulsive purchase).

Do you have to be a major company with a great track record with the bank, buy expensive terminals and pay a fortune in order to be able to accept credit cards? Not at all. If your bank supports e-commerce and you choose to work through them that's fine. However there are a number of providers of services to merchants which enable you to accept the major credit cards. You need very little in the way of history, it costs a very modest amount per month and you don't need any machinery. The whole thing can be organised online and the service provider benefits primarily by taking a percentage of the amount paid into your credit card account by your customers. This percentage can vary considerably - from perhaps 4% up to about 10% or more, so be careful about who you deal with. Look at the alternatives before you choose. Some will also offer additional services such as 1-800 numbers. If you can get some references (but not supplied by the companies themselves!) from satisfied customers, that would be good. How do you do that? Easy, surf the web and find some sites that accept payment by credit card. E-mail them and ask who provides their card service, what fees they charge, what percentage they take and how professional they are in the service they provide. You'll always find a few people ready to be helpful and informative. There are also a few good newsgroups around (moderated newsgroups are best) where you will find people interested in marketing via their sites and happy to share information.