Financial Middleman for Small Business

Written by Pavel Lenshin


FINANCIAL MIDDLEMAN FOR SMALL BUSINESS

------------------------------------------------------------ copyright (c) Pavel Lenshin ------------------------------------------------------------

Small online businesses are mostly represented by home-based entrepreneurs. In this regard any payment scheme or system should meet at least two criterions:

First. It should be relatively cheap. Individuals are usually not enjoying huge investment potential in contrast with legal entities. Second. It should lead to complete automation of financial transactions as a result of lack of time or inability forrepparttar majority of entrepreneurs to hire support stuff to serve these transactions.

In short, it all comes down torepparttar 108892 shortage of money and time. For these simple reasons, sophisticated e-commerce systems based on merchant accounts are expensive, hard to establish and support for an average entrepreneur. That is why third party payment processors that will handle all online orders on your behalf became widely popular among small businesses. They require very little effort to establish and even less effort to support. In most cases they will provide you with completely automated as well as quick and reliable for your customer way of payment.

This will allow you to accept payments 24/7 focusing your business to work on other tasks and activity.

In practice once set up,repparttar 108893 whole customer paying and product delivering process becomes fully automated and consists ofrepparttar 108894 following steps:

1. Customer fills outrepparttar 108895 order form and clicks onrepparttar 108896 submit button to passrepparttar 108897 order torepparttar 108898 payment gateway; 2. Automatic payment gateway routes credit card (e-check etc.) data and purchase amount torepparttar 108899 payment processor ofrepparttar 108900 merchant (seller) acquiring bank; 3. Acquiring bank sends authorization request torepparttar 108901 payment processor ofrepparttar 108902 customer's issuing bank; 4. Issuing bank validates customer's account, credit limit and authorizerepparttar 108903 transaction, freezingrepparttar 108904 specified amount onrepparttar 108905 customer's account; 5. Issuing bank routes authorization code (or "transaction declined" message) torepparttar 108906 acquiring bank's payment processor; 6. Acquiring bank routes payment approval (declined) message torepparttar 108907 payment gateway; 7. Payment gateway notifiesrepparttar 108908 merchant (seller) about approved (denied) transaction; 8. Provides customer withrepparttar 108909 product s/he ordered,repparttar 108910 details of shipping etc. or notifies about payment problems; 9. Banks' clearing settlerepparttar 108911 mutual transfer of funds, creditingrepparttar 108912 respective merchant (seller) account withrepparttar 108913 specified amount of purchase.

All these steps due to complete automation process, if we don't speak about phone or mail orders etc., will take somewhat between several seconds to several minutes, still usually faster than when you are billed atrepparttar 108914 store's pay desk and much faster consideringrepparttar 108915 speed of going for online shopping instead ofrepparttar 108916 "offline".

This publication intended to analyze existent picture of third party processing companies and represent yourepparttar 108917 comparative facts that would help you to determine your preferences based on business needs and capacities.

The table below will provide you with basic features ofrepparttar 108918 most "visible" today's online payment processing players. Please note, thatrepparttar 108919 online financial market evolves extremely fast, sorepparttar 108920 table data is accurate as onrepparttar 108921 February 2003 what I cannot guarantee in a month, allrepparttar 108922 more in a year, so my advice here is to choose 3-5 most acceptable and affordable financial intermediaries (even if some important for you feature is missing) and recheck their services and fees once more at their web-sites before making any final decision.

------------------------------------------------------------ Company Name in alphabetical order: 1) Setup fees 2) Monthly fees 3) Commission structure*

2CheckOut: 1) $49 2) no 3) $0.45 + 5.5%;

CCNow: 1) no ($11.95 for Int.) 2) $9.95 3) $0-$100 - 0%, $100+- 9% (11% for Int.);

ClickBank: 1) $49.95 2) no 3) $1 + 7.5%;

IBill: 1) no 2) no 3) $0-$9,999 - 15%, $10,000-$24,999 - 14% etc.;

MultiCards: 1) $15 or $150 2) no 3) 11.9% or 9.9%;

PayPal: 1) no 2) no 3) $.30 + 2.9%;

PaySystems: 1) $49.00 2) no 3) $1.00 + 3.95% or $0.45 + 5.5%;

ProBilling: 1) no 2) no 3) $0-4,999 - 13.5%, $5,000-12,499 - 12% etc.;

ProPay : 1) $35.00 (yearly) 2) no 3) $.30 + 2.9%;

How to Save Money with PayPal

Written by Albin Dittli


PayPal offers two types of accounts. The first isrepparttar “Personal Account” andrepparttar 108891 second isrepparttar 108892 “Premier/Business Account”. With both types of accounts you can do certain things for free. These free activities are open an account, send money, withdraw funds to U.S. Banks, and add funds.

With both types there are fees for withdrawing funds for non U.S. banks and rate conversion fees.

The big difference is with receiving funds. PayPal charges Premier and Business accounts to receive payments. Personal accounts are free, but may not receive credit card payments.

The business account fees to receive funds can be as high as 2.9% ofrepparttar 108893 transaction plus an additional $.30 per transactions. This can be very expensive, especially on smaller amounts.

The main reason you would set up a business account is so that you can accept credit cards. You are probably only accepting credit cards if you are running some type of business.

However, with a business account you are charged fees when you receive money, even when it is just a transfer from another U.S. PayPal account. This type of transfer would be free in a personal account.

If you run a business you have little choice but to have a business account. However, there is nothing to prevent you from also having a personal account.

If you run a business and also belong to a program where you will be receiving commissions then you should open two PayPal accounts. Open a business account for your business. Open a free personal account for all ofrepparttar 108894 affiliate and network marketing programs that you are in.

Cont'd on page 2 ==>
 
ImproveHomeLife.com © 2005
Terms of Use