How Do I Get Paid?

By Laura Rush
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Diane H. asks: I'm on an extremely tight budget for my small business, and I wanted to know if there are any low-cost payment solution providers online?

Initially, accepting credit cards was the predominant method of getting paid in e-commerce, but new online transaction methods are continually being developed and refined — some having more success than others.

A peer-to-peer payment (P2P) solution is a system whereby a company acts as a middleman or intermediary between two parties — two individuals, an individual and a business, or two businesses — that are participating in a financial transaction. P2P systems seem to be gaining the most ground as an alternative to credit card transactions, at least in recent years.

PayPal is the most recognized P2P payment solution, having made groundbreaking success through its affiliation with eBay.

Using PayPal, you can accept payments directly from your customers' PayPal accounts, avoiding the risk of charge-back fees (commonly incurred by businesses that accept credit card payments), while also allowing your customers to keep their payment information private. PayPal makes money off the service by charging a small transaction fee for every purchase. The fees range between 2.2 to 2.9 percent for each transaction, plus $0.30.

There are many more P2P options that compete directly with PayPal — giving you many options from which to choose. We've gone ahead and listed a handful here, as a way for you to get started.

2CheckOut: With 2Checkout, you simply enter your products or services into 2Checkout's products database and then add the buttons that are automatically created for your site. 2CheckOut handles sales in a secure environment, and essentially contracts with you as the supplier to fulfill the sale. Once a sale is complete, 2Checkout deposits payment for the sale into your account. The transaction fees a little bit higher than PayPal: 2CheckOut collects a 5.5 percent commission on each sale plus a $0.45 charge per sale. There is also a one-time set up fee of $49 to open an account.

eCount: eCount develops custom solutions for businesses or merchants seeking to create a branded payment product that can be spent only at their location, or at a limited number of destinations. They also offer a P2P product that facilitates the instant electronic transfer of funds from one individual to another. Fees and pricing varies.

PayQuake: PayQuake is unique in that is offers three different cost structures or plans, depending on the size of your business. The types of PayQuake plans are Pay for Play, Select and Pro. The Pay for Play merchant account is ideal for small merchants on a tight budget who want the ability to accept credit cards, but process only a few credit card payments each month. There is an annual membership fee of $49, but there are no monthly fees — you only incur the discount rate and transaction fees as you have sales.

Ken L. asks: With people still reluctant to purchase from e-commerce sites they are unfamiliar with, how can a new e-commerce merchant get potential customers to trust his or her site?

Acquiring new customers has always been seen as a costly problem for online retailers, especially those businesses that lack multiple channels of distribution or the aid of a physical presence to help promote the Web-based business. It doesn't help that online fraud is the top concern for most online consumers, making suspicion and doubt rampant across the e-commerce world.

However, there are several things you can do to assuage the fears of new customers without breaking the bank:

  • Keep It Simple, Yet Informative. The simpler your site is to use and the more complete the information offered, the more readily people will trust you. Unnecessary complexity confuses and irritates consumers. People shop online for convenience; don't make them work harder than they should to find a product or service.

  • Use Endorsements and Testimonials. If your business isn't well -known, use the power of customer testimonials to prove the trust others place in your business. You can never have too many endorsements — people read and respect them, providing they're honest and credible. Also, visible seals from a third-party certification scheme such as VeriSign or the Better Business Bureau attest to your Web site's security, privacy and sound business practices, and let consumers know they can trust that their personal and transactional information will be kept private, secure, and confidential.

  • Be Visible. Reveal the people and personalities behind your business. Include pictures of yourself or the owners, the staff at their jobs, and press clippings about the business. People trust other people more than Web sites. Also, clearly display your contact details (address, phone, e-mail, etc.), as well as your business registration number so customers can contact you directly.

  • Be Present. Open your doors to visitors. If a potential customer asks a question, satisfy every query within 24 hours. If a customer places an order, confirm it immediately, and continue to keep customers in touch with their transaction's progress. Once the customer has received the product and had a chance to use it, follow up.

  • Offer Guarantees. Customers will be more comfortable buying from you if you can ensure your products are authentic. Offer money-back guarantees if they are unsatisfied with their purchase.

  • Privacy. Respect your customers' privacy, and let them know this by prominently displaying links to your privacy policy on every page of your site. If you do collect personally identifying information from your customers, tell them what information specifically is being collected and how it will be used.
Readers: Need a no-nonsense answer to your question or problem about setting up and running an online business? Ask us! Just send an e-mail to us with "Question for the Experts" in the subject line, an explanation of your problem or question in the body, and we'll do the rest. Then, check back with us to see when your e-commerce questions are answered. You never know what you might learn.

Adapted from ECommerce-Guide.com.
This article was originally published on December 09, 2003

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