Online credit card transactions can be a fabulous way of providing a 24/7 storefront -- both making it easier for your customers to purchase from you, as well as reducing your work for each purchase. Online credit card transactions can even be of benefit to non-retail businesses and organizations. You can allow clients to pay invoices online or members of your organization to register for events or make donations online.

There are four key things you need to know about accepting credit cards online.

Basics of Accepting Credit Cards

• Merchant Account
  This is an account that allows merchants to process credit cards. In order to accept credit card transactions online, you need to have a merchant account that is authorized to use Card Not Present transactions or Mail Order/Telephone Order (MOTO) transactions. Your web designer should be able to assist you in setting up a proper merchant account if you do not already have one. Many times if you have a merchant account for offline transactions already set up you can work with that provider to prepare your account for Card Not Present transactions.
  
  
• Internet Gateway
  This encrypts your customer's transactions from your website, submits them for authorization and settlement to your merchant account and holds the numbers securely.
  
  
• Shopping Cart
  Th is is software on your site that allows customers to put your products in a "cart" as they prepare to purchase it. Visitors can change the quantity of items they want to order, and when they are ready they can check out.
  
  
• Secure Server
  A secure server encrypts and decrypts data sent to and from the server to prevent a hacker from getting the credit card numbers. In order to do this, your website host or designer will need to set up your server to handle the secure transactions. You will also need to get an SSL (Secure Sockets Layer) certificate. This is a certificate that verifies that you are who you say you are -- that way people can trust that when they give you their credit card number you will not abuse it. You can see an example of a site that is secure and has a certificate at: https://www.brilliantweddingpages.com When you look at this page you will see a lock at the bottom right of your screen. If you double click on the lock you should be able to read info about the certificate. The server uses the secure mode when you enter https:// . Your web designer should only use this for pages that require it because it causes the browsing to be slower. For example, you can go to http://www.brilliantweddingpages.com (the only difference is that the "s" in the "https://" is missing) and it is the same site, but it is not in secure mode (it will load faster this way).

Costs of Accepting Credit Cards
Now that you understand the basic elements of online credit card transactions, how much will it cost you to set this up?

• Merchant Account
  There are many different costs associated with a merchant account. Usually there is an initial application / setup fee, which can range from $0 - $1000, although sometimes this is waived. Your monthly costs are dependent upon the following fees: customer service fee, discount rate, and transaction fee. A discount rate is the percentage of bank card sale amounts that you are charged for the transaction. A transaction fee is a set amount that you are charged for each transaction in addition to the discount rate. Often times there is a minimum monthly transaction fee that you will need to pay, even if you didn't have any credit card transactions that month. The monthly minimum transaction fee can range from $15 - $30 a month (calculated by your total discount rate plus transaction fees).
  
  
• Internet Gateway
  Gateways can range in price from $20 - $60 per month, depending upon the services provided by the gateway. In addition, gateways may have setup costs and you may need to pay your web developer to set up your server to work with your gateway.
  
  
• Shopping Cart
  Your web developer will determine the cost of this for you. A high quality shopping cart that keeps visitors on your site and is easy for your visitors to use can cost anywhere from $1000 - $10,000. Many businesses also have a developer integrate and customize the cart to make it easy to use for online customers. It is most beneficial for your web developer to use a system that allows you to list and update your products online, or a method for you to create online invoices that could be directly paid. There are many possibilities, but you will need to talk to your web developer regarding the costs.
  
  
• Secure Server
  There are 2 costs associated with a secure server. First, you have to purchase a SSL certificate. A SSL certificate currently costs $199 / year from Thawte or $349 - 995 / year from Verisign. Secondly, you have to set up the server your site is on to handle SSL transactions. The cost of this depends on your host.

The above method describes the best way to implement online credit card transactions. However, there are other methods that will cost less money, if you are not as concerned about a professional look or easy ordering, please see the article titled "Accepting Credit Cards Online - Part Two."