Normal bank merchant accounts
When a shop owner (a "merchant") wishes to accept credit card payments for the things they sell from their "real" (not online) shop, they must first apply to their bank for an eftpos merchant account. The banks usually charge a fee to set up that service and they also take a percentage of each sale.
Internet payment gateways
If that same shop owner then sets up a web site and wants to be able to sell their products or services online, they need a secure way to accept credit card payments from their web site. Typically, this is done via what is called an Internet Payment Gateway. The Payment Gateway is a special web site that essentially does what an eftpos machine does - verifies the credit card, makes sure there are enough funds for the sale and then deposits the sale into the merchant's bank account. The Payment Gateway is connected to the merchant's web site so when the customer clicks the "Check out" or "Buy now" button the Payment Gateway swings into action. This is a service that the shop owner must pay for in addition to the normal eftpos merchant account.
Almost all banks offer various forms of payment gateway. Additionally, there are 3rd party providers. Either way, you need a merchant account with your bank to connect the payment gateway to your bank account so the money from your sales ends up in your bank account.
PayPal
Another way to sell things online is to use a company like PayPal. PayPal allows people to take credit card payments online without the need to set up a merchant account with their bank. PayPal process the credit card and holds the money for you. You then transfer the funds from PayPal to your bank account. Many people use PayPal to sell things from their own web site. Indeed, anyone selling things on eBay uses PayPal. See below for more details.
Emailed credit card sales
If you have a normal merchant eftpos account with your bank you can take credit card details over the phone, fax or post. The details are then entered into your eftpos terminal and if the transaction is successful you ship the goods. In the days before the internet mail-order businesses accepted payments that way. With the emergence of the internet a number of merchants simply extended that idea and added an order form to their web site that allowed customers to enter their credit card details into the form. The details were then emailed to the merchant who then processed the order as if it were a fax.
On the surface this seems like a good idea because there is no need to set up a payment gateway and it saves all the bank fees associated with that. On it's own however, this is normally not a secure process. The connection between the customer's browser and the web site can be secured using an SSL connection. This is just a normal way to use a web browser. So far, so good. However, the email from the web site to the merchant is not secure so anyone intercepting it can read the details and potentially use the card. This is not much different from someone stealing the details from a mail-order except that online theives have the possibility to open a lot more email orders than posted (snail-mail) orders.
Encrypted email credit card sales
At Ticketbook we have developed a way that merchants can accept emailed orders with the credit card details encrypted so even if the email is intercepted it can't be read. See Encrypted Email for more details on this.
No merchant account or payment gateway? Use PayPal.
If you do NOT have an eftpos merchant account and you do not want to set one up, use PayPal. PayPal is free to setup and maintain - you can do it yourself in about 15 minutes. PayPal charge a percentage of the sales you make. The PayPal percentage is currently between 1.1% and 2.4% of the total sale price plus 30 cents per transaction. Most Ticketbook customers could expect to pay the 2.4% rate based on the expected volume of sales. Click here to see the current PayPal charges for Australia. Click here for our detailed instructions on setting up a PayPal account.
Already have a payment gateway?
Connect it to your Ticketbook. Click here for a list of the supported gateways.
Already have an eftpos merchant account?