Having a business online today almost certainly requires performing credit card transactions. There are many merchant service companies who cater specifically to online credit card vendors. The exchange rates will be higher because the card is not present for the transaction but the company can make up for these extra expenses due to the absence of a brick and mortar location and all the expenses that go with an actual store front. Those expenses are why vendors are turning to online processing of orders. They have the ability to present their products in such a way to the consumer that they can also keep a relatively low level of inventory at their base site but have access to an array of products to direct ship from their vendors.
The only problem with an online business is the risk of the card not being present because transactions come with a higher rate of online credit card fraud. When someone processes and online credit card,there are security measures in place for identity verification but they are not fail proof by any means. The merchant must build in a cushion for fraud and loss by theft of credit in order to be able to maintain the business and stay afloat.
Another factor to consider when talking about these types of credit card transactions is that you don’t capture a physical signature from the customer. Anytime you do not obtain a signature,there is going to be room for a chargeback looming. Approximately 1 in 50 persons completing an online transaction will initiate a chargeback even if the charge is valid. It is easier for the merchant to refund the money than it is to argue with a customer,unless it is a substantial amount of money the vendor is facing losing. However,if a vendor ends up with too many charge backs they can lose the ability to accept future online credit card transactions. To ensure that you keep your charge backs and challenges to a minimum,talk with your credit card processing vendor about ways to avoid those situations and what you need to do.
There are also storefronts available to the merchant whereby the merchant doesn’t even house the products but they collect the funds through online using the credit card gateway. They in turn pay their suppliers to ship the products listed on their storefront and it’s a win/win situation for everybody. However you choose to set up your business,whether it is online or a brick and mortar,it is likely that you will accept online payments at some juncture so your customer base will be expanded.