One tenth of the World's ever growing internet population shops online, representing a staggering 627
million people. And when it comes to payments, online shoppers are clear: 59% of Internet consumers
surveyed use credit cards as their preferred payment method. Accepted virtually everywhere, credit
cards offer online shoppers the ultimate convenience.
If you want to do business online, accepting credit card and debit card payments is a necessity. But an
important decision needs to be made.
What you need to do to directly process payments
From fraud liability protection to complying with security requirements, directly processing credit card
and debit card payments isn’t always straightforward proposition. If you want to directly process card
payments on your site, you need to think about the following things:
• Getting a merchant ID – Before you can start directly processing credit
card and debit card payments, you will need to get a Merchant ID from
your bank or a third-party merchant bureau. A Merchant ID is essentially
a license to accept credit card and debit card payments and to get it you
will need to prove your financial stability and PCI security compliance.
• Security requirements – To get a Merchant ID, you need to be
compliant with the Payment Card Industry (PCI) Data Security Standard
(DSS). PCI DSS is a 12-point set of rules that covers all aspects of data
protection, including network security, data protection, data encryption
and security policy development
• PCI DSS – Compliance requires a significant initial investment in secure
servers, firewall protection and security software, as well as ongoing
maintenance and testing of security systems.
• Fraud risk – Unlike brick-and-mortar businesses, online retailers must
rely solely on “Card Not Present” (CNP) transactions. That is,
transactions where the consumer does not physically present you with
their credit card. These types of transactions are at most risk of credit
card fraud since transaction success only guarantees that the credit card
has not been reported as lost or stolen and that sufficient funds are
available.
• Financial losses – Retailers who don’t take measures to protect
themselves from CNP fraud risk financial losses due to disputed
transactions and chargebacks. Excessive chargebacks alone can result
in hefty fines from credit card companies and/or the loss of your
merchant account. Checks can include - age and address verification, security number check, contact
customer follow-up and identity verification.
DID YOU KNOW?
• 59% of internet shoppers use credit cards as their preferred method of payment
• UK shoppers will spend £100 billion a year online by 2018, doubling the web’s share of sales to 20%.
• Over 83% of consumers own a debit card