For entrepreneurs that are new to the internet, all-in-one ecommerce solutions can seem like the perfect solution. But many times, an all-in-one solution is a recipe for an all-in-one failure. This post will consist of 4 parts, involving setting up a website online. First will be an introduction, second will cover setting up a website, third will help you understand accepting payments online, and fourth will cover marketing and SEO. Each day will have relevant resources for that day’s topics.

The internet has millions of websites and of these, thousands of them are selling products online. Of these online businesses, thousands of them use pre built, all-in-one ecommerce solutions. The problem with a pre-made solution is that no matter which company is providing it, they almost always look the same. Completely independent companies have the same cookie cutter look as everyone else. These systems make it hard to distinguish yourself from everyone else.

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Often businesses run into the problem of being labeled as a high risk business for processing electronic payments and are forced into unconventional processing agreements. Many business owners have no idea that their industry falls into a high risk category.

Shades of Grey and Red:
High Risk businesses fall into either the gray area between a normal business and a definitive high risk business, or fall into the red zone for truly high risk businesses.

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Nearly every online business will run into a visitor that is trying to make fraudulent purchases on their website at some point. Hopefully the transaction or situation can be identified and corrected before it ever becomes a real problem.

Unfortunately, fraud has become synonymous with online business. There are so many ways that fraud can be committed through a website, with several desired outcomes for fraudsters. Not all fraudulent transactions are made to obtain merchandise. Card testing is another problem that some merchants face, where the transaction is not meant to obtain goods.

It is important for merchants to be able to identify fraudulent situations and purchases before there is ever a shipment of products. Voiding a transaction is far easier to do than obtaining merchandise lost to a fraudulent transaction.

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There are 2 options for a business when choosing to accept credit cards on the internet; a traditional merchant account, and 3rd party processing. 3rd party processors are companies like Paypal, 2Checkout.com, and Ikobo. Both, merchant service providers and 3rd party processors essentially provide the same service of enabling a business to accept credit cards.

The difference between the two business types is that third party processors process the transaction for your business under their own name, but with a merchant account, the transaction is processed under your businesses name. Visa and MasterCard both have strict policies against having another company process your transactions for you.

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These are some of the most popular credit card machines that are currently being sold and used in the US.

The main brands being used in the US are Verifone, Hypercom, and Lipman. All three companies have terminals that are well suited for just about any business. Lipman is by far the leader in wireless processing with three wireless terminals in circulation. While Verifone has been the most popular brand in the past, Lipman and Hypercom are quickly gaining market ground in the US.

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I wrote a lengthly truncation article about two years ago on my business website, and I think it is important enough to post an article about it here. Visa and MasterCard have slightly different policies regarding truncation so I will cover the most restrictive here.

Please refer to Credit Card Truncation if you would like information about a specific state’s policies.

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This weekend, I was shopping at a business here in Austin, TX and I noticed that the there was a minimum purchase to be able to pay with a credit card. I politely informed the business owner that this was a prohibited practice and I was rudely returned with a “if they’re going to charge me for taking a credit card, then I’m going to chose the ones and how I am going to take them”.

While this may not seem unusual to some, it is clearly against Visa and MasterCard regulations. Many businesses may not know that this is illegal, and others may just not care. Either way this post is a review of a few common practices that some merchants partake in, and they shouldn’t.

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I’m not going to pose this topic as a question, I’m just going to say it. Merchant Service Providers are better than banks for providing quality credit card processing services.

Merchant service providers provide the same type of service as banks, but do it with better customer service and support, with lower rates, and better prices on credit card processing equipment.

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The Credit Card Processing Industry has a very long list of reasons that a customer can charge back merchandise for. It is unfortunate that all credit card fraud and protection laws are written with the consumer in mind and not the business owner.

It’s ludicrous to imagine that a consumer has no accountability for loosing their credit card and having someone who finds make fraudulent purchases on it. But, at the same time, a business is completely accountable for accepting a stolen card.

This list includes most of the reasons that a customer could request a chargeback for.

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Hopefully you have never been presented with the situation of your business needing a reserve account for your credit card processing. Delta Airlines has just been threatened with a reserve account for their credit card processing that could cost their business over $750 million dollars in just 2 months.

A reserve account is basically a savings account that some merchants are required to have in the event of excessive chargebacks, a high risk business type, poor credit history, or some other factor that could jeopardize the businesses ability to pay their credit card processing bill.

There are 2 types of reserve accounts, rolling and fixed. A fixed reserve will require a business to maintain a certain monetary amount of money in the reserve account at all times. A rolling account will keep a certain percentage of the funds the businesses processes for a set period of time and then the funds will be released into the merchants bank account. Some rolling reserves span for only a few days while others are for months or even years.

A reserve account is designed to protect the processing bank in the event that the merchant can’t pay for the processing bill that they accumulated. If the merchant cant pay, then the processing company is stuck with the bill. This includes merchant account fees, chargebacks, merchandise returns, or any other fee the is any way connected to the accepting of credit cards.

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