Online Merchants Create Seamless Transactions By Accepting Electronic Checks Or Credit Cards

Fraud Prevention Methods Ease Consumers' Fears

BY TERRI MCKENNA
Over 60 percent of U.S. households are online, and more than half of these households shop from home on a weekly basis. In fact, according to Ipsos-Reid, a leading research company, of the 100 million Americans who use the Internet, half of them will spend at least $500 shopping online this year. This means that if you're not selling online, you're missing a significant revenue opportunity. And with advances in technology, selling online has never been easier, safer or more cost-effective.

The most important part of selling online is accepting payments from your customers for a single transaction (i.e. the purchase of an item from your website) or for a series of transactions (i.e. the payment of membership fees or installment payments via your website). Online payment processing offers a customer the convenience of submitting their credit card or other form of payment on your website, and for you to actually receive the money from this transaction. Recurring payment processing allows you to set up regularly scheduled payments for your customers for a series of transactions. Fortunately, technology has simplified this process so that, with the right solution, payment processing is easy, secure and seamless for both you and your customers.

Steve Kay, Executive Vice President of AutoScribe Corporation, feels that online payment methods eliminate 25 percent of calls because customers can be routed to the Internet to process transactions that would normally require a human element. "It's a win/win for the consumer and the business owner," said Kay.

It's no mystery why credit cards are the most widely accepted form of payment on the Web -- they are secure, fast and convenient. But in addition to credit cards, online merchants can now offer their customers the option to pay with electronic transfers from their checking accounts. Both options are now available to buyers via the Internet.

Contrary to reports of rising fraud rates, credit card payments remain one of the safest payment methods available online. Sophisticated Internet solutions, such as the LinkPoint Secure Payment Gateway, process credit card payments in real time using Secure Sockets Layer (SSL) technology, which encrypts all confidential information during the transmission and authorization of transactions.

Other fraud-prevention tools, such as the Address Verification Service (AVS), make online credit card acceptance even safer. The service compares the numerical information in your customers' addresses with records stored by card-issuing banks. It then returns codes that indicate whether the numbers match. Although the information provided by the AVS does not affect the authorization of your transactions, it can help you make informed decisions about suspicious orders.

"Validation is the key," added Kay. "It's critical that a business makes sure the credit card address and zip code match."

Besides the AVS, you can protect yourself by using the card validation code 2 (CVC2) and the card verification value (CVV2) verification systems of MasterCard and Visa, respectively.

These verification services use the three-digit codes printed on all MasterCard and Visa cards to help you determine whether your customers possess legitimate cards.

For customers who don't have credit cards, online checks are a great payment alternative, particularly if you sell your products in an online auction environment, such as eBay. In fact, research shows that nearly one-third of all consumers would rather pay with checks. And for the millions of people in the U.S. who don't have a credit card (although most have a checking account), the door is closed when it comes to conducting business unless you offer an online check option. In a recent Master Card survey, over 25 million Americans cannot get credit because of troubled or nonexistent credit histories and according to a PSSA (Payment Systems Survey Association) survey, only one out of four checking account customers hold credit cards with available credit.

It's interesting to note that "traditional" checks are used for 11 percent of all online purchases. Since these online shoppers are willing to go through the trouble of mailing checks, offering this clientele the option of paying by online check is an instant profit booster, provided you have a special section on your site explaining how online check payments work and that buyers' personal information is secure. In addition to increased revenue, online check transaction costs are much lower then credit cards.

"Although our society relies heavily on credit card payment methods, many consumers would rather pay by check," said James Curley of Saratoga-based Mountain Media. "Merchants accepting online checks can realize a significant savings in reduced transaction fees and increase revenue by taking checks as well as credit cards."

Online checks (also called e-checks) are virtual checks that allow consumers to pay by check through the Internet. The buyer fills out a form (that looks like a check on the screen) with his or her banking information, the date and amount, and then clicks the "send" button. That information will then either go to your computer or to a transaction service.

Mountain Media's Web Payment Software (www.web-payment-software.com) makes electronic checks look just like paper checks except it's all done online. "Our online check processing system converts checking account information into an ACH-formatted transaction for an electronic funds transfer, debiting the consumer account and crediting the merchant account," said Curley. "Checks go through a fraud screening process prior to submission into the ACH check processing and clearing system."

Both payment options can help you turn browsers into buyers. Equally important, the speed and convenience of these services enable you to ship merchandise quickly, which helps ensure customer satisfaction.