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What you should know about payment gatewaysBy Staff Writer 6 September 2012 | Categories: news
Selling goods online is a fantastic way for small businesses to reach a bigger market. But, says PayGate MD Peter Harvey, would-be online businesses need to become familiar with very different ways of being paid.
Getting an online merchant account so that you can take credit card payments directly can be a very involved and expensive process and not everyone will qualify. Fortunately, you don’t need a merchant account to trade online. There are alternatives available like UKash, FNB Cell PayPoint, PaySum1, Mpesa, SID (Secure Internet Deposit) and more. But how do you know which one is right for your business?
A payment service provider (PSP) should be able to help business owners answer that question, says Harvey. “PSPs specialise in making online payments happen – they are the link between sellers, customers, their respective banks and card companies. One of the first things to look for in a PSP is whether they’re able and willing to guide you in making the right choices.”
Although you don’t want to leave your choice of PSP up to your web developer, you do want to make life as easy as possible for them. “Find a PSP that offers plugins for all the popular shopping cart applications your developer might want to use – you don’t want to have to develop anything from scratch,” says Harvey.
The relationship with the PSP needs to continue long past the web development stage however. “Look for a PSP you can build a long-term relationship with. The costs of changing payment providers are high, especially if your business can’t afford to be out of action for a few hours or days.”
Payment needs are likely to change as a business grows, notes Harvey. “Don’t get tied into a two-year contract with a high minimum monthly commitment – or any two-year contract, in fact. A 30-day notice period should be the standard.”
Online commerce can be scary for first-timers, says Harvey, but many people have built very solid businesses online. “If you’re supplying any kind of niche product or service, selling online might be the only way to build a sustainable customer base. The secret is to find the right partners to help you make it happen.”
For more info on visit www.paygate.co.za.
The article first appeared in TechSmart's SME Guide 2012 to read or download here.
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