Electronic Payments

Deciding To Use An Electronic Payment System

Before implementing an electronic payment system, there are various issues you need to consider.

Will electronic payments increase your profits?

• What about the added expense of accepting payments online? Many smaller businesses simply download online orders in batches, process them offline and dispatch the goods. It may still be possible to keep data in an electronic format throughout the purchasing cycle, either by linking the website's back-end system to the back office ordering system or by having both systems linked to a database. For more information see Integrating back office systems.

• When considering costs, the volume of online business you do will determine how good a deal you get with regard to bank processing and credit card authorisation charges.

• Do your sums: will any investment in hardware, software and training, or the charges you need to pay per transaction for outsourced processing, be offset by an increase in profit? Will you need to set a minimum price for credit card transactions to safeguard your revenues? Many online shopping sites pass on these charges to the cost of product or delivery charges, but if you do this, will your goods remain competitively priced?

Are you ready to handle electronic payments?

• Estimate how many transactions may be channelled through your website. What percentage of sales come via your website and will this increase by offering electronic payments? Will you be able to fulfill the additional orders?

• Is your website ready for electronic payment processing? Links may need to be made from your shopping cart software to a third party transaction processor or a Payment Service Provider (PSP) which, assuming that you have a professionally designed website, typically requires only simple programming. Get advice from a Business Link adviser (or the equivalent in Scotland, Wales or Northern Ireland) on whether your website is ready for handling electronic payments.

• Even the data from automated, outsourced systems needs to be analysed and checked over. Do you have the staff and expertise to oversee the system?

• Your customers will hold you responsible for the security of their data. Are you ready for that responsibility?