These 3rd party payment processing solutions give the seller a link to a secure webpage where they can redirect their customers to, for completing the order. While the method has many benefits, it also has disadvantages.
Below I would like to make an introduction of the basic terms and concepts used by the standard payment processing services, to help sellers Understand better what they need to compare when choosing an payment processing service.
Payment Cycle- the time interval during which orders are taken for one payment. Can be monthly, bimonthly, weekly, etc. After each payment cycle ends, the payment should be sent to the seller.
Payment Hodling Time - unfortunattely every payment processing service deliberately holds the payment for an amount of time that varies between a few days up to several months. They do not send the payment immediately after the payment cycle has ended, but instead they hold the payment for the specified payment holding time. They say this is to protect them against fraud, chargebacks, and it also helps them with increasing their profit ( by holding the money in bank for an interest ). For example, for a monthly payment cycle and a payment holding time of 15 days, the money resulting from orders during October will be sent to you on or after 15th November. This is not a big issue if the payment holding time is not long, but some services have a payment holding time of 2 months or more, and you will receive your payment for October sales in January the next year.
Payment Processing Day - is the date of the month ( for montly payment cycles ) when the payment cycle should end, and the payment calculated. Usually this is the last day of the month, but some services let you specifically set it.
Signup Fee - the fee for signup. Some charge non-refundable fees, other application fees, other do not charge a fee at all.
Transaction Fee - the per transaction fee, usually a percentage with a minimum fixed value.
Chargeback Fee - when a chargeback occurs ( it happens in case of fraudulent orders or when the customer is not satisfied with the product ) not only that the payment processing service takes back the amount of the order, but it also charges you with a chargeback fee.
Increase Sales with Payment Solutions
Take a second and imagine your shopping on a website, find the product you ve been looking for, and as you go to the order form to purchase it, you find out that the company doesn t accept payment online. Instead, you must mail a check. If you were like me, you would probably click off the site and search for another company that offers the same products and *does* accept payment online, whether it is by credit card or online check. It doesn t take a super, intelligent person to realize that it is inconvenient, time consuming, and adds on lag time till you get your purchase when you must sit ..
Some payment processing services have additional fees, such as product download fee ( for virtual goods ), monthly fee, statement fee, refund fee, wire transfer fee, contract canceling fee. You need to ask them about all these fees, because most services do NOT clearly specify it on the website nor in easy to find documentation; and you might have unpleasant surprises later if you do not. Especially with the payment holding time, it's disappointing to expect to receive the first payment just to find out that it will be sent to you months later.
It is a good practice to read the TOS ( terms of services ) and the contract before signing up, as many payment processing services state they reserve the right to terminate or suspend their services to any customer, for any and no reason at all, without notice, and they also state that the last payment will be held 6 months, for chargeback protection.
You can learn more on http://www.ordersoft.net
ABOUT THE AUTHOR
What is a payment system? When the word system is used there is an almost reflex reaction and the word computer comes automatically to mind. So when we talk about a payment system there is usually a similar reaction. However a payment system is not only the technology. There is a whole lot more to it.
What is a payment system? I am reminded of lengthy debates around the office on just this question - and the heated and, at times, passionate discussion that ensued. My antagonist, who is also my partner, took one view and I took the other. The thrust and parry of the dialogue ebbed and flowed
long into t ..
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Marias AlexanadruAn quick guide in Payment Processing Services and Terms
