As an Australian business, accepting credit card payments online is to ensure you are meeting customer needs and maximising sales opportunities. However, with a range of payment gateways available, it can be difficult to decide which is the cheapest option for your business.
The Basics of Accepting Credit Card Payments Online
Before you can discuss the cheapest way to accept credit card payments online, it is important to understand the basics of the process. A payment gateway is a secure link between your website and the bank or financial institution that processes the cardholder’s credit or debit card details. This connection is encrypted, so customers can rest assured their information is safe.
How do credit card payments work? When a customer purchases from your website, the payment gateway collects their card details. This information is then sent to the relevant bank or financial institution for verification. When the payment is approved, the funds are transferred to your business’s bank account.
The Cheapest Way to Accept Credit Card Payments Online
The cheapest way to accept credit card payments online depends on a few factors, such as the size of your business and how often you process card payments. For smaller businesses, flat-rate payment gateways are usually the most cost-effective choice. Stripe and PayPal are two of the most popular flat-rate payment gateways. They charge a flat fee per transaction, which can range from 2.9%-3.5%, plus a fixed fee of around 30 cents. This means you don’t have to worry about additional costs such as setup, annual or monthly fees, or acquiring costs. They also provide a secure payment platform and reduce the risk of fraud.
For businesses processing higher volumes of card payments, interchange plus pricing may be a more cost-effective option. This type of payment gateway charges you a percentage rate for each transaction and an additional fee. Interchange plus pricing can be more cost-effective than flat rate solutions as the percentage applied to each transaction decreases with higher volumes. It is important to note that this type of payment gateway does have a more complex pricing structure and requires some knowledge of interchange rates and fees.
Businesses also need to factor in the costs of setting up a merchant account. While there may be no additional cost when using certain third-party gateways, some payment processors will charge a setup fee or require you to use their merchant services. This means that there will be additional costs associated with setting up and maintaining the account that must be taken into consideration.
For businesses looking for a simple, cost-effective way to accept credit card payments online, they may want to consider using a third-party gateway such as PayPal, Stripe, or Square. These payment gateways are easy to set up and use, and they generally offer the cheapest rate for processing payments online.
These days, with many solutions available, it’s best to shop around to find the best deal. While payment processing fees vary from provider to provider, most providers offer discounts for larger transaction amounts. Small- and medium-sized businesses can also benefit from working with a processor that offers lower rates on smaller transactions.
With the right solution, businesses can also enjoy features such as fraud protection and customer support. It’s important to find a payment processor that offers the best combination of features for your needs!