Business Tips: Credit cards and online businesses

Charge up your sales!

by Mark Lamendola

You may have read those lame articles about how you must have credit card sales on your site. And if you don't have a site, you need to get one and let people pay by credit card online. Well, those articles are right, even if they fall short of telling you why. Or how. We'll accomplish that here.

In this tutorial, we'll cover:

• Why you should offer online credit card sales
• Why your visitors want online creidt card sales
• Some traps in arranging for a credit card services supplier
• A recommendation, based on experience
• How to leverage credit card sales for greater profit

Why you should offer online credit card sales

When people visit Websites, they want two things. Speed and security. Obviously, a check in the mail isn't very fast. From a security standpoint, the visitor is not likely to be very comfortable with a firm so rinky-dink it can't even offer credit card sales. That is the perception of the visitor, like it or not. Sure, plenty of firms who aren't rinky dink do just fine without  a credit card. But not on the Internet. There is no face, no person to go after. With a credit card, the buyer has some assurances not existent via other methods of purchase.

From a sales standpoint, you don't want to give a person the chance to forget about the sale before concluding it. You want to strike while the iron is hot. Sure, if you are decent you give money-back guarantees, but that's not the same as losing a sale because you make someone go through all the hassle of mailing you a check later, when that same person could close the sale now with a credit card.

People look at their checkbook ledgers or at their cash before making a purchase, but it's almost unheard of to look at your credit card or charge card balance prior to making a purchase. Credit cards (and charge cards) increase impulse buying dramatically, and that is why you'll make far more online when you add the ability to make a credit card purchase.

Another big advantage to you as a merchant is credit card companies help you promote your business. They have a vested interest in doing so. Mindconnection has benefited from American Express's interest in us, as well as that of VISA and MasterCard. And, depending on what credit card service provides your interface between your online store and these credit card companies, you can get further benefits and promotion.

Why your visitors want online credit card sales

They want speed and security, as mentioned earlier. When someone mails you a check, that person is mailing you a contract between two parties. When someone gives you a credit card purchase, that person is giving you a contract between the credit card company and you. The credit card company has some clout. If you are a dishonest merchant, they can withold payment. They can do many things on behalf of the cardholder. And this gives cardholders a sense of security. Of course, the credit card companies also can intervene on behalf of the merchant, but it is the buyer who really keys into this.

Another advantage to the buyer is the ability to cancel a sale. Once the buyer logs off, s/he may decide to cancel the sale. In reality, this doesn't happen much, but the knowledge the buyer can do this lowers the resistance to buy. Otherwise, the buyer must go through gyrations to void a check-based sale. Thus, the credit card becomes the buying method of choice.

Some traps in using a credit card services supplier

These are some things that can kill your business. Make sure the company you select does not have these problems:

1. Their server is underpowered, and they don't allow a quick check and close of sale.
2. Their slow server makes it hard for you to get timely updates of sales.
3. They don't work well with major shopping carts.
4. They don't give you accurate reporting, or it takes forever to get a report.
5. The reports are in a format that makes them hard to work with.
6. They are a minor player in the market, thus are not as "in tune" with merchant needs as they should be. Nor are some of these in tune with "physical plant security."
7. You never hear from them once you sign up, except for the bills you get.

The number one problem with some credit card service firms is they don't have secure servers. Don't even consider such a firm.

Also, make sure their reports allow you to track income and expenses for tax reporting purposes. If you are a business in the U.S., you have to deal with the IRS and don't need to make that any more difficult than it already is.

How to leverage credit card sales for greater profit

Once you start using credit card sales on your Website, you'll see greater revenue. That's a given. What you may not know is the credit card companies have many merchant promotion services, and quite a few are free. For example, both VISA and MasterCard give you logos and information you can post to show how your site offers the buyer some protection simply not available through other purchasing methods.

American Express has some promos that take place offline, as well as online. Do you really want to be left behind, while your competition reaps the benefits?

You probably are thinking, "A credit card purchase feature on my site would allow me to sell more of my products." That's good thinking. But, you can take things a step further. Once you have your shopping cart mastered and your credit card system in place, you can sell other people's items on consignment. Why link back to their site, which may or may not have credit card sales? You can do the credit card sales from your site, send them an e-mail for order fulfillment, and cut them a check. The normal way is for someone else to have you drive traffic to their site, and they eventually send you a check. Which way sounds better for you--to be in charge of the situation or to be at someone else's mercy? Not really a tough choice.

You can also establish a separate shopping cart/storefront for discounts, coupons, promotional sales, etc., tied to the purchase of another item. The more you think about it, the more you can do. But, unless you offer credit card sales, you can't do any of it. Think about that!

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