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Canadian Internet Payment Processing
Easily one of the most complicated aspects of opening a new ebusiness in Canada is the entire payment processing aspect. Starting a successful ebusiness will depend on many different factors however the ability to create a safe, secure and easy way to accept payment from your customers may be the single most important individual component.

The Stigma Of Security - How Secure Is Online Processing?

One of the major hurdles of selling online is creating a shopping experience that your clients will be confident with. Submitting credit card information over the internet can cause apprehension in many shoppers. You must overcome this apprehension by providing a payment experience that is smooth and swift and easy for your customer to navigate.

In fact selling online, and more specifically transmitting credit card information over the internet, is incredibly secure. Online transactions and "card not present - signature not present" payment processing utilizes cutting edge security technology in combination with strict merchant processing policies to create a transaction that is not only safe - but statistically safer than in person credit card payments.

How To Process Secure Credit Card Transactions Online

In order to process credit card payments you will need to either secure a merchant account and payment gateway solution, or locate a third party payment processing service that will process payments on your behalf such as PayPal. Both of these solutions will require you to integrate your website to the payment software to create a fluid payment process.

The advantage of third party payment processing systems is the simplicity of the initial application. Third party processors have the easiest overall integration requiring little to no technical knowledge from the end user to set up a new account. The payoff for this simplicity is the loss of control over this specific aspect for your ability to run an ebusiness.

A third party solution for payment processing is great for starting up your business as the costs are minimal, application is inexpensive and integration requires little technical skill. The ongoing costs associated with this type of solution are generally higher than a traditional merchant account solution on a per transaction basis. Payment processors charge a percentage fee on the individual transaction value that goes through your account. While the setup costs are low, the percentage of sales volume will be much higher than a professional merchant account solution.

Bank Direct & True Merchant Account Solutions

A true merchant account is a bank account dedicated for the processing of funds. For Canadians finding a merchant account solution can be very confusing and frustrating due to the prohibitive nature of the application process. Applying for a merchant account for your Canadian ebusiness will require an extensive application process consisting of a security check, financial balance sheet of your company and an in depth product or service analysis to determine the risk associated with the product you are selling.

A merchant account operates like a revolving line of credit where you are able to accept money from someone and then the money becomes available to you after a short holding period. Since a credit card purchase can be reversed any time up to three months following the transaction, the merchant account bank will assume some level of risk for your account.

Most importantly professional merchant account solutions for online companies in Canada can be difficult to be approved for since so many products and services are considered to be too high risk for internet purchases. This concept of high risk goes beyond obvious products or services which are unsavoury or illegal, and extends deeply into mainstream products and services that you might not immediately associate risk with.

Continue to the second page of this Canadian ebusiness article to read Third Party Payment Processors vs. Internet Merchant Accounts which covers payment processing, software and integration issues and the biggest catch 22 for Canadians online.
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