Online Business - Selecting An Online Payment Method

When it comes to being paid via the internet there are a number of issues involved; the foremost being security. For a long time I avoided buying anything online and didnt sign up for online banking because there was a lot of hearsay about whether or not these sites were secure. However, with the internet rapidly expanding and an increasing number of big sites selling items online, there are obviously solutions for secure online trading:

Internet Merchant Account (IMA)
This option is ideal if your business already accepts debit and credit card payments for face-to-face transactions and you expect a fairly high number of online transactions, the majority of which will be simple and low risk. In this case you need a great amount of flexibility when operating your business, with cash flow being an important aspect. For such instances it is advisable to apply directly for an internet Merchant Account and discuss your requirements with the acquiring bank.

Payment Processing Company
If your business does not have a large number of online transactions and you do not currently accept credit or debit card transactions and therefore do not have an internet Merchant Account, you can go through a payment processing company. Those that have not been trading long and so cannot provide a well-documented operations history should consider the facilities that a payment processing company may have to offer, with the possibility of moving to a more cost effective option later on.

This option is suited for those of you who value the ability to attract online sales more highly than the ability to collect the sales income promptly. Payment processing companies may hold payments for a settlement period of anywhere between 30 and 60 days before the money reaches your account. Charges for this type of account are generally higher than that of an IMA, although it does relieve you of the administrative burden of having to manage all of your customers card details.

Online Shopping Mall
This would be best suited if your business is small, you do not offer credit or debit card sales and you have very limited computers skills. If your products are fairly standardised and easily understood, and your website doesnt need any unusual features, then it might be worth considering the facilities that an online shopping mall may have to offer. However, it is important to remember that this payment method will mean that you pay higher transaction and fixed costs just to establish a web presence. This method isnt ideal given the extra costs but if you dont have the IT knowhow and dont know anyone who does then it might be the best option for you.