With the increase in the number of customers that e-commerce sites like EBay and Amazon.com are experiencing, many alternative payment options have sprung up. One of the most popular remains PayPal, especially with users of EBay, as its appealing aspects include ease of use, security measures, and available insurance options. (Of course, it may be THE option in the EBay game simply because Ebay owns PayPal.).

However, as PayPal continues to attract merchants, particularly new business owners, there exists a myriad of choices among payment processing providers. Any merchant should evaluate the wide array of choices as PayPal has its inherent disadvantages.

One downside is that it only offers online services, which not everyone needs. Those who run offline businesses, such as retail establishments or mobile enterprises, cannot avail themselves to a PayPal account. Those who conduct dual Internet-based and offline businesses, may find it advantageous to opt for a full service merchant account provider – one that can provide credit card processing capability for both entities. To target this offline business demographic, there have been many PayPal alternatives that have arisen over the last couple of years, and not only do they offer a host of services that PayPal does not, they can actually save you money while doing it.

Among other “negative” aspects of using PayPal include:
· Having to wait between 5-7 business days to transfer funds from your PayPal account to your bank.
· Having to upgrade your account if the amount coming in is more than $600 per month.
· Even with an upgraded account, processing limits tend to be rather conservative. Business owners need a payment processing provider that encourages their business’ growth, even if expansion is quick.
· A higher frequency of chargeback-related frozen accounts. (Merchants may not have access to any of their money pending investigations relating to disputed claims, initiated by the customer.)
· The PayPal button and payment website setup may not look professional to discriminating eyes.

As well as the aforementioned points, there are three different types of PayPal accounts, yet the difference in them is minimal. This can often cause confusion, since it may not be completely clear what account might be best for you. So what are the options?

A Viable Alternative to PayPal
Although there are other e-commerce solutions to PayPal, including other third party processing providers, one of the best and most comprehensive is a merchant account. With a merchant account, not only are you completely in control of how your online business transactions are carried out, you have a lot more scope for extra business.

This is because using a merchant account as an alternative allows your customers to trade with you without having to open a PayPal account. Many companies will only use PayPal for their payments, and this deters a lot of potential sales from people who don’t want to have to open a specific account like PayPal just to buy a CD or ring. Instead, they’d rather just use a credit card, quickly and efficiently, which a merchant account allows.

In addition, the costs between a true merchant account vs. PayPal must be evaluated at each stage of your business. The general consensus among industry experts is that PayPal will be cheaper to set up and use than most (not all!) merchant accounts at the inception of a business. But as credit card transaction volume begins to increase, the associated costs of a merchant account will be cheaper than those incurred under the PayPal flag.

Yes, investigate PayPal as this company may satisfy your business’ payment processing needs. But you would be wise to also investigate PayPal alternatives!

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To learn more about our merchant account services, please visit us at http://www.intelli-collect.com.  

Attaining sustainable profitability in any online business takes a combination of many things: Having the right niche product, a strong understanding of Internet marketing techniques and a large target user base are just some of the prerequisites to start you on your road to success. Another one, though no less important, is having the right e-commerce shopping cart for your website.

After all, if your visitors don’t have an option to make buying from you a simple exercise, how can you expect them to turn from visitors into customers? But what is an e-commerce cart and how do you make sure you have the one that’s best suited to your needs?

What Is An E-commerce Shopping Cart?
Exactly as the name suggests, an e-commerce shopping cart works in a similar way to how a normal shopping cart at the supermarket does. When your website visitor decides to purchase something from your site, they can use the cart to collect numerous purchases at the same time, instead of just one or two, until they’re ready to “check-out”.

By offering this, you will stand a far better chance of quality sales numbers as opposed to just the odd purchase here and there. However, to truly benefit from the extra purchasing options an e-commerce shopping cart offers both you and your customers, you need to ensure that you have the best one available for you.

What Option Is Best For You?

In order to answer this question, you have to consider several factors, including your budget, available options, if any, from your hosting company, how serious your online business is, the degree of professionalism that you feel that you need to project, your intended payment gateway provider (the shopping cart must be compatible and work in concert with the gateway), and the necessity to include integrated solutions.

As so many new online business owners try to contain their expenses, a common exchange observed in many forums relates to the availability of free shopping carts. OS Commerce and Zen Cart are two of the most prominent free, open source carts and seem to meet the demands of a large segment of the online business community.

Such carts allow the user to categorize products, apply special discounts and coupons, include shipping and tax functionalities, offer a great variety of payment platforms, and are user-friendly. But on the other hand, these shopping carts do require a significant amount of customisation to be able to access and deploy some of the more professional features. Moreover, some business owners claim that these shopping carts are not particularly search engine friendly and may compromise optimal standing when ranked against competitive sites. The lack of consistent technical support may also prove problematic.


An alternative ecommerce shopping cart is one offered by PayPal which is touted for its ease of use. And with companies like eBay using it as standard, you can be pretty confident that most potential customers would feel comfortable using this cart on your site. In addition, the PayPal shopping cart entails a reasonable cost (a reasonably small percentage of each transaction).

But PayPal’s detractors site the “cheesy look” of the cart, the fact that it does not provide a seamless experience for the shopper (opening a new window and hiding your site), has a relatively high shopper abandonment rate where customers leave their purchases and do not actually order), and has inherent limitations (e.g., inventory management). Also consider whether it is really advisable for your business to employ the services of a third party processor instead of a true merchant account provider.

Beyond the world of free shopping carts and those offered by third party processors, such as PayPal, resides a cornucopia of shopping carts, all beseeching the would-be merchant to stake a claim. Those that offer advanced functions (e.g., suggesting other complementing purchases; autoresponder software to advise customers of new promotions; a loyalty scheme for repeat customers, where they might receive discounts automatically once they go above a certain purchase amount; and an affiliate module) seem to attract great interest.

As you compare and contrast ecommerce shopping carts, keeping one eye on budget and the other on features, the following are criteria that should be employed in your decision-making:

- The customer needs to be able to read further information on the product/service, ensuring that he/she is buying what is truly desired;
- Total cost and particularly subtotal cost should be consistently evident to the buyer. (I recently abandoned a shopping cart because I only discovered that my shipping cost was almost $50 for $200 worth of product right before I was ready to officially authorize the transaction!);
- The checkout button must be easily identifiable as well as the continue shopping button. The process to purchase should be as simple as possible!

Think outside the box, too, and consider carts that encourage sales. For example, on another of my online purchase experiences, I was using a cart that indicated that I only needed several more dollars to qualify for free shipping. The merchant enjoyed an extra sale simply because he/she had the foresight to implement a shopping cart that communicates important messages to the customer.

Once you decide which shopping cart to use, again, ensure that it is compatible with the merchant account provider’s payment gateway. (Authorize.net is a prominent gateway that is compatible with almost all shopping carts in use.) Your hosting company should also support the use of the intended shopping cart. Some hosting companies even supply their own shopping cart which may merit attention.

Use the aforementioned points as you go shopping for shopping carts.  By making the right purchase for your company, you can more readily "bring home the bacon."
 

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To learn more about our merchant account services, please visit us at http://www.intelli-collect.com.   

Can you imagine a hotel, inn, or lodge that accepts only cash payments from its customers in today’s marketplace? That is probably beyond the scope of anyone’s imagination, even if the establishment were located in the modern-day equivalent of Mayberry. As in almost all other industries today – perhaps even more than in many other industries – the hotel and lodging industry is expected to accept credit cards from customers. But, as many hotel and lodge owners will woefully attest, having a merchant account and accepting credit cards can be very expensive! Outrageous credit card processing costs and unwanted chargebacks can quickly get out of hand, cutting into hotel and lodge profits.

Fortunately, there are a few simple things that hotel and lodge owners can do to reduce the costs of maintaining and using their merchant accounts. This article explores some of the most common costs associated with accepting credit cards in the hotel and lodging industry, and provides some tips and techniques that hotel and lodge owners can use to keep these costs under control.

Three-Tier vs. Interchange Pricing

Most hotel and lodge owners are unaware that credit card processing costs are calculated in one of two ways. Almost all hotels/lodges unknowingly operate under the traditional, more expensive method, but about 5% have learned the tricks of the trade and enjoy the less expensive cost calculation method. Let’s take a look at how credit card processing companies calculate the rate charged to hotels and lodges.

The traditional method (sometimes referred to as three-tier pricing) comprises three types of rates and is applied to most hotels and lodges:
1. The qualified rate, which is the best rate available.
2. The mid-qualified rate, for transactions that are keyed in.
3. The non-qualified rate, for all other transactions.

The newer pricing scheme, which is less common but also significantly less expensive, is known as interchange pricing. With interchange pricing, each charge is made of (1) a mark-up of a certain rate category and (2) a set fee per transaction. At first glance, interchange pricing may seem more expensive, but it actually can result in significant cost savings. Why? Because the three-tier pricing most often resorts to the non-qualified or mid-qualified rates, which are more expensive than the qualified rates. Talk to your credit card processing company about the possibility of switching to interchange pricing. Once you start enjoying the lower credit card processing costs, you can choose to pass those savings onto your customers, having a more competitive room rate than your competitors who are being charged according to the older, more expensive pricing scheme.

Reward Programs

Many of the people who stay at hotels and lodges have credit cards that are tied to reward programs, also known as loyalty cards. From the customers’ perspective, these cards are excellent, because they allow the user to accumulate frequent flyer miles or redeemable points with every purchase. Unfortunately, these cards also carry many hidden additional costs to the hotel or lodge owner who accepts payment.

Under the older, three-tier pricing system, loyalty cards are automatically processed at the highest (most expensive) non-qualified rate. Given the increasing prevalence of loyalty cards, hotel and lodge owners cannot afford to let this happen. If, instead, they switch to a credit card processing company that uses the interchange pricing system, loyalty cards are charged at their real cost (plus the per-transaction fee), which is virtually always less than what would be charged under the three-tier pricing system.


Check Cards & ATM/Debit Cards

Many customers like the convenience of using check cards and ATM/debit cards. With a little advance planning, hotel and lodge owners can make these cards work for them, too. Under the three-tier pricing system, check cards often carry the highest rates. As described above, however, by switching to the interchange pricing system, hotel and lodge owners can save a significant amount of money, especially since these cards usually have lower rates than regular credit cards.

With ATM/debit cards, hotel and lodge owners can take these savings even further. These transactions cost much less than credit card or even check card transactions, usually around half a dollar. There is no percentage fee, so the merchant account is charged only a modest fee per transaction. To be able to take advantage of these cost savings, hotel and lodge owners need to invest in a PIN-pad, so that customers can easily and securely enter their four-digit PIN at the registration desk.

High Volume, Low Ticket Transactions

When a hotel or lodge has a small restaurant or café on-site, the owners can often save a great deal on credit card processing costs by establishing a separate merchant account. That way, if the majority of credit card transactions are generally under $15 (the figure is $25 if a contactless machine is employed) – so-called high volume, low ticket transactions – the credit card processing company will recognize them as small-ticket items and, accordingly, charge a lower percentage rate. With many such transactions each day, this can mean significant cost savings.

Also, having a small ticket program has additional benefits, such as obviating the need to obtain customers’ signatures for nominal payments. This may represent just a few seconds for each customer, but on a busy lunch line when employees are strapped for time, this can mean greater convenience for customers and employees alike.

Minimize Chargebacks

Another huge opportunity to reduce the costs associated with having a hotel merchant account is in the area of chargebacks. One of the most common causes of chargebacks is when a hotel or lodge charges a no-show customer for one night’s stay as a consequence of not calling to cancel the reservation. Unfortunately for the hotel and lodge owners, many of these no-show customers then deny the charges when they receive their credit card bill.

Charging no-show customers for unused rooms makes sense, but the hotel or lodge owners needs to take several steps to minimize chargebacks. First and foremost, the policy of charging for non-cancelled reservations needs to be displayed prominently on the website, in promotional materials, and at the registration desk. Whenever customers call to make a reservation, the cancellation policy must be explained in full. Also, whenever charging a no-show customer for an unused room, the charge should be accompanied with a mailed invoice advising the customer of the charge and citing the policy as justification. If the customer later denies the charge, the hotel or lodge owner can fight back by presenting the details of the customer’s unused reservation, a copy of the establishment’s cancellation policy, and a copy of the invoice. Presented with this evidence, the credit card company is less likely to present the chargeback to the hotel merchant account, instead either insisting that the customer pay or covering the cost on its own account.

By applying the tips in this article, virtually all hotel and lodge owners can significantly reduce the costs of maintaining their hotel or lodging merchant account.

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To learn more about our merchant account services, please visit us at http://www.intelli-collect.com.   

If you’re in any form of business – whether you own a retail establishment, have an online presence, or work as a mobile merchant – one of the most important things that you can possibly have is a merchant account. Regardless of whether it’s a sole proprietor type of business, or one that involves thousands of products for sale, without a merchant account you could very well be missing out on numerous extra sales. This is why it’s so important to not only have one, but also make sure that you’re using it to its full potential.

What Is A Merchant Account?

 
A merchant account is, quite simply, the ability to take credit card payments for any product or service that you offer. Instead of having to wait on checks or money orders to arrive and clear, having a merchant account allows your customers to make instantaneous purchases. Credit card processing capability can also enable your customers to patronize your enterprise even if they do not have ample cash at the time of sale.

Not only is this beneficial to your customer, since they don’t have to wait the extra delivery time while their check is clearing, it’s also extremely beneficial to you. According to the latest survey by the consumer industry, customers who pay by credit card are more likely to spend extra on their purchases. This can be as much as an average $40 per sale compared to cash customers who spend as little as $9 per transaction.

Yet it’s not just in the sale that you benefit – the administrative costs are less expensive for credit cards, with 2.7% being the average bank charge per sale, as opposed to 4.0% for checks and 4.7% for cash. If you sell a lot of products, you can see how that could soon add up.

Setting Up a Merchant Account