Merchant Accounts & Increasing Sales

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* Make Money with Your Website: Merchant Accounts & Increasing Sales
Posted Nov 02, 2003 - 07:54 AM
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Pillars of Internet Marketing

Home / Chapter 1 / Chapter 2 / Chapter 3 / Chapter 4 / Chapter 5Chapter 6Chapter 7Chapter 8Chapter 9Chapter 10Chapter 11Chapter 12 / Chapter 13 / Chapter 14 / Chapter 15 / Chapter 16

Chapter 8: Merchant Accounts
Making Ordering on your Site Convenient to Increase Sales.

Many websites make the critical mistake of not accepting credit card payments on line. Eighty-five percent of online orders will be made via credit cards and just by setting-up sites to be able to accept credit cards, you can increase sales up to two-hundred percent. If site visitors have to mail you a check or call you on the phone, many will decide not to buy after their purchase impulse has passed. Adding online credit card payment can increase your ratio of converting visitors into customers by two-hundred to three-hundred percent. The ability to set-up your website to handle and process credit card orders is accomplished through a Merchant Account. The merchant account is linked with a bank account, and once the online order is processed, funds are deposited into your account, automatically. Therefore, you can get a merchant account through your bank, but they are usually less friendly towards the virtual community and charge hefty set-up fees. Other merchant account brokers are available, but beware, many charge a set-up fee, high monthly fees, high percentages and might even require a security deposit. I personally have been very pleases with my merchant broker, Electronic Funds Transfer. They charge reasonable rates and percentages and have a very low set-up fee and are friendly towards even those with bad credit. Others that are decent are, Pay Pal, iBill, Right Connection, Link Point, Plug’n Play, Blue Pay, Echo, World Pay, Cybercash, E-commerce Exchange, eProcessing Network, Network 1 Financial, Payflo Pro, Intellipay, USA ePay, and Concord.

According to Corey Rudl, author of the Internet Marketing Course, “you can loose seventy-five to ninety-five percent of your sales because your ordering system isn’t user-friendly enough.” Beyond allowing customers to buy with credit card, there are other options that make your ordering system user-friendly, such as accepting payment by phone (toll free), charging the order to visitors phone bill, pay-pal, online check processing, credit card alternatives, and an order form customers can print out and fax or mail in. Also, be sure to accept as many credit card types as possible, such as Visa, MasterCard, American Express, and Discover. Not only is providing online, real-time ordering solutions convenient to your customers, it is convenient to you. You save time on staff time, processing orders, sending out statements or receipts, etc. . . 

Security: Online consumers were defrauded to the tune of over 700 million (USD) last year, reports Newsbytes. Online credit card fraud is nineteen times more prevalent than offline credit card fraud. Internet transactions generate fifty percent of credit card disputes and fraud transactions at Visa International. This is despite the fact that just two percent of the credit card company's overall business comes from Internet trade. Over 6 Million Internet consumers in the US have been the victims of credit-card fraud, according to a study by the National Consumers League (NCL). The study calculated that this represents approximately seven percent of online consumers in the US.

While consumers are protected against unauthorized charges of ore than fifty dollars, you may not realize that most credit card merchant account agreements leave the merchant one-hundred percent liable for fraud committed via online transactions. Furthermore, the merchant may be responsible for charge back fines, bank fees, increased discount rates and reconciliation and auditing costs. Online rates of credit card fraud range from two to forty percent, depending on the product offered and the amount of prevention and security in place. Here are some strategies to protect against online fraud:

  • Require users put in the CVS and CID numbers (the last few numbers on the back of a credit card, used to help ensure the customer is in possession of the credit card, not just using stolen numbers).
  • Require the full name, address, phone number, and email of the customer to process and order.
  • Use a shopping cart that is encrypted.
  • Use a shopping cart or ordering software that records the buyers IP address.
  • Verify the address of the cardholder (many shopping cart software, or merchant account systems, do this automatically through AVS (Address Verification System) and won’t process the order if there isn’t a match with the cardholder.
  • Use real-time, rather than offline, order processing so that AVS and proper credit card account information and balance are automatically verified.
  • Place a anti-fraud policy on your order pages to discourage fraud attempts.
  • If any order looks unusual or suspicious, take the time to call the customer or do further investigation.
  • Order the free report from Verisign™, What Every Merchant Should Know About Internet Fraud.

Up-selling: The convenience of offering your customers real-time ordering and credit card processing, also allows to capture impulse buys or post-sale buys.  To gain post-sales buys, allow your merchant account to work for you by using auto-responders and pop-up ads to up-sell your customers products or services. For instance, you can send an automatic email after a predetermined time to customers that order product x and say, “thank you so much for ordering product x. You’ll be happy to know, we just came out with product y, and product y compliments product x, and because you are an existing customer, we are offering you z percent off. Click here to find out more info and to order.” Also, you can have a pop-up ad come up right after they submit an order, confirming the order and suggesting another product. Corey Rudl, who suggests this tactic, says forty percent of his customers went ahead and bought the suggested item as well. If you use E-Commerce Builder™ the shopping cart is already programmed with an up-selling feature and allows you to automatically pre-program in up to three products to up-sell, per product (See Chapter 16, Putting it All Together). If you need a shopping cart or E-commerce site, I highly recommend E-Commerce Builder™, a unique, build-your-own E-commerce automated system with “web designer in a box” technology. The E-Commerce Builder™ software allows people to build websites easily and affordably, without sacrificing quality. Sites are built-in with affiliate tracking software, E-stores / Shopping Carts, E-mail List Managers, pop-up, flash, dynamic feedback and contact forms, real-time statistics, and more. The E-store included meet all the above criteria and allows users to get a $5,000 E-commerce site for $99. It really is incredible. .

Adding online, real-time ordering capability increases your potential for sales and automates much of your customer service and accounting. By offering a variety of real-time payment options, such as credit cards accepted, your increase the potential for sales even more. The only major drawback to offering online ordering capabilities is its vulnerability to fraud. However, using proactive techniques and proper software helps to make it an acceptable risk. Furthermore, research has shown that forty-three percent of all online credit card fraud occurs at online auction sites, so unless you are in the auction business, the potential for fraud is about half of what is reported. Finally, if you take the proactive steps listed in this chapter to prevent fraud, the true occurrence of fraud drops to a fourth of what has been reported. In the end, your business is likely suffering more in the way of lost sales, than would or could be lost to fraud. The internet is exploding, technology is exploding, 300,000 new people are getting online everyday and if you have a product that you sell in a virtual store and you don’t offer real-time, immediate gratification, credit card ordering you are going to be left in the dust and eaten for lunch by your competitors.

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