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How to Accept Payments Online
01-14-2013, 01:13 PM
Post: #1
How to Accept Payments Online
One of the most important decisions facing online sellers is how to collect payment for online purchases.

Companies come and go and there's a lot of competition for becoming the biggest online "bank" which, these days is presented as a financial facilitator rather than a bank in the traditional sense so that not all the same laws apply.

Here are some of the best known eCommerce payment systems:

Google Checkout
We all know Google, the Web's premiere search engine, but not everyone knows that Google provides payment facilitation services. It's mainly designed for facilitating product payments, but can also be used to pay for services and tax-exempt donations. Unlike PayPal, it's not designed for person-to-person money transfer (e.g., sending tuition money to a university student in another state) but that may change. Google Wallet is the component of Google Checkout that enables buyers to easily pay for their online purchases. There is now a tighter integration between Checkout and Wallet. Google Checkout is available in the U.S. and U.K. To sign up for a U.S. account, you need to provide SSN, at least one valid credit/debit card, and a federal tax ID number (which, for many people is the SSN, but will be different for incorporated businesses).

Google Wallet users can pay online with VISA, Mastercard, American Express, and Discover Card, as well as credit/debit cards. Credit card information is entered into the Wallet account and then is used when a buyer pays.

Propay is a privately held corporation, founded in 1997, with headquarters in Lehi, Utah. It provides a way for small merchants to accept payments made through merchant cards very similar to PayPal. Propay began as a data security company, so it was a natural step for them to develop payment facilitation services. Many people don't realize ProPay is an accepted payment method on eBay auctions.

Propay has two primary forms of accounts (custom arrangements are also possible). A Premium Plus accunt is $49.95 a year, Platinum is $69.95. The main difference is the transaction processing rate, which is approx. .3% lower for a Platinum account. Before you balk at the price and go with PayPal (which is free to open an account), work out how many payments you might do in a year and then compare the percentages per transaction. For some people annual rates and lower per-transaction fees might mean a savings overall. Propay has a page that explains the rates.

PayPal is one of the first payment facilitation services to really catch the public's attention, in the days when they were independent from eBay. It's not the only one, but it's now one of the best known, mainly due to the fact that it was acquired by eBay and then promoted as the main (and almost only) payment method on their popular auction site. This combination gave PayPal high visibility and fueled its growth.

The other reason PayPal has grown quickly is because there's no cost to sign up. In fact, in the earlier days, PayPal would deposit $5 in the accounts of new users. This was a strong incentive for people to try it.

There are a variety of accounts available on PayPal, personal accounts, business accounts, micropayment accounts. Each has a slightly different fee structure. In most cases, there is a base fee for a transaction and then a percentage fee, depending on whether the money is coming out of a PayPal account, bank account, or is processed through a merchant card.

PayPal also offers a way for merchants to add a PayPal payments button to their websites and recently has begun offering a mobile card reader device called PayPal Here that enables mobile devices to accept payments through PayPal's services.
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