Q: I want to start selling online but don’t know where to start. Can you help?
Mar 30 2009
Answered by: Ashley de Safrin Ask a question
Before starting to sell online there are some issues to consider. Trading over the internet creates a major change in customer communications. It becomes necessary to rethink the way that orders are placed, as the customer will not be able to talk face to face. So you will need to think about every aspect of how a transaction is handled, including order confirmation, invoicing and payment, and deliveries and returns.
To be able to accept online payments the first thing to do is set up an internet merchant account with either a bank or other processor offering such facilities (merchant acquirers or acquiring banks).
Because the card holder is not physically in front of the seller payments made in this way are known as ‘card not present’ or CNP transactions. This raises the chance of fraudulent activity so transactions have to be carried out in line with the tightly defined rules set down by the banks. If a fraudulent payment is received, the money will be reclaimed from the bank account, known as ‘chargeback’. Businesses need to be aware that a CNP transaction, even once authorised by the cardholder’s bank, this doesn't guarantee payment.
If the business already accepts payments using debit or credit cards for face to face transactions and they expect a reasonably high number of straightforward online transactions then applying for an internet merchant account from their existing acquiring bank is probably the best solution. It is normally simply a matter of asking the existing acquirer for an additional Internet merchant account ID for use exclusively with internet transactions. This process is normally quick, especially since the bank already holds much of the information detailed above.
If no card payment facilities are in place, and it is not anticipated that the level of on line transactions will be high, then the services of a payment-processing company could be the solution. This is especially attractive if the business has not been trading for very long so there is no track record in respect of operational controls.
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