Tag Archive | "Payment Processor"

How Mobile Payment Solutions Work: Part 2

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How Mobile Payment Solutions Work: Part 2

You’ve now learned a lot more about how mobile payment solutions work online and what they’re good for. But before you implement them as a method of payment on your site, there are a few final considerations that you would need to keep in mind. This will let you know what you can expect if you want to use mobile billing with your online business.

Everyone Gets a Share of the Action

Getting the funds from the customer’s mobile account into your hands may seem simple in theory, but the reality is far more complex than that. There are thousands of mobile carriers around the world. In order for a payment processor to be able to collect money from them, they need to go through some rather complex networks of financial agreements and clearinghouses. Of course, this means that they will discount a fee for each transaction made. So you can’t really expect to get the full $5 if a customer makes a $5 purchase on your site. Due to the fact that billing to a mobile is far more complex than billing to a credit card, the fees charged to merchants are usually very high. For each transaction, you can expect to receive only 40 to 70% maximum of the total amount that was actually paid for by the customer. Now there is a possibility that the system will change in the future and more efficient networks will be set up to deal with collecting the payments and forwarding them to the merchants, but for now, high transaction fees are simply part of the game and it will probably stay that way for a few years at least.

Getting Paid is Slow

Don’t expect to get the money in your bank the next day, or even next week. In fact, settlement for all transactions can take anywhere from 30 to 90 days after they were made. This is because the payment processor needs to collect the funds from each mobile phone carrier before they’re able to pay you as a merchant.

On the Bright Side, Fraud and Chargebacks are Low

When a customer disputes a mobile billing transaction with their carrier, due to the low amounts involved, most simply have a policy of crediting the customer the amount they’re disputing and giving them information on how to cancel the subscription. This happens quite often when a teenager buys a few dozen songs or items for an online game and then claims not to know anything about it when his parents get the mobile bill. Therefore, unless there is evidence that a merchant attempted to mislead customers about the cost of the transactions or otherwise deliberately engaged in malicious business practices, chargebacks, although theoretically possible, are very rare.

With all the information presented here, you should have a clearer picture of what accepting mobile payment entails to you as a merchant and can now make a better decision as to whether or not you will want to accept them on your website.

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Are Mobile Payment Solutions Really the Way of the Future for E-Commerce?

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Are Mobile Payment Solutions Really the Way of the Future for E-Commerce?

You may have seen a few pieces of online news about mobile payment solutions and wondered whether you should implement them on your website. Some articles even go as far as claiming that mobile payments are the way of the future and will revolutionize the online commerce industry. But is there any truth to these claims, or is it just marketing hype to get yet another “start up” run by a 19 year old entrepreneur from his basement off the ground?

When talking about mobile payment solutions, we first need to clear up one thing in order to avoid any potential confusion. There are actually two kinds of mobile payment options currently available in the online world. The first one is simply a type of mobile wallet that is linked to the customers credit card. The buyer can easily make transactions from their mobile phone without revealing their card information, but the purchase is still charged to their credit card as usual. The second kind involves charging the amount of the transaction to the buyer’s mobile phone bill or deducting it from their prepaid balance on their mobile account. The second one is the type that we will be addressing in this post.

First, let’s understand how the system works. The client wants to make a purchase online. They then enter their cell phone number into a secure form on an e-commerce site. They then receive a text message with information about the transaction (such as the cost) and will need to confirm they accept the charges, either by replying to the message or more commonly, by entering a code that is sent with the message onto the merchant’s website. They then have access to the product or service that they’ve ordered and the merchant will get paid by the payment processor later on, just like with a credit card transaction.

Sounds easy, right? The system is designed to allow for easy and smooth transactions with minimum risk to both the merchant and the customer. Using such a payment system has many advantages for both parties. It is good for buyers who don’t have a credit card or are reluctant to use theirs on an online commerce site, as it provides them with an alternative payment solution. It’s also a very good way to pay online for small purchases that are delivered directly to the buyer’s computer or for online services that don’t require any physical items to be shipped.

But should you run and implement this method of payment on your website immediately? The answer will depend on a few factors. As convenient as mobile payments may be, they are still far from being a perfect solution in all cases and it’s also important that merchants understand their potential disadvantages and not only look at the plus side. Tomorrow we will go into more details on the inner workings of mobile payments, which will be very helpful if you just started an e-commerce site and want to provide buyers with as many choices for payment as possible.

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Online Business Security Tips: Part 1

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Online Business Security Tips: Part 1

Previously, we’ve seen some advice on how you can maintain a good amount of privacy when doing business online. There are many ways that you can avoid sharing unnecessary personal information with the companies that you do business with by using ways such as registering a business name, using a private mail box and using a separate phone number for your online business activities. But there are also some other things that you need to be aware of when you do business online: how to keep your online business safe from threats such as hacking and fraud. Here are some methods that you can include in your regular activities that will make doing business online safer for you:

  • Research your business partners (companies and individuals) carefully

Whether it’s joining a new affiliate network, signing up for a payment processor so you can make sales online, or hiring someone to develop a website or Facebook app for you, doing your due diligence can go a long way. Do some research on the person or company that you’re going to be dealing with. This can be as simple as doing a Google search to see if you can uncover anything about them online that would be negative, such as past disputes. When dealing with businesses, be careful of start ups and new companies. While they may grow and become a valuable business partner for you in the future, they could also go out of business unexpectedly. There are numerous complaints in webmaster and online marketing forums about affiliate programs that have shut down and left hundreds of people without any payment. This is why you should give priority to partners that have already built up a solid reputation online and who have shown they’re doing well for at least a few months.

  • Don’t re-use the same log in information for every online account that you use

When you do business online, chances are you will have a few dozen logins to keep track of, such as email services, hosting services, affiliate network accounts, payment processor accounts, etc. The smart thing to do is to avoid using the same user name and password for every single account that you use at different websites. The reason behind this is quite simple. Let’s say the database of an affiliate network is hacked and all the log in information is posted on public websites by the hackers. If you used the same log in information everywhere, there is a much bigger chance that hackers could access your other accounts and cause more damage. Therefore, your login credentials should be unique for every site that you use, even if this means that your password on each site is only slightly different by a few characters from those that you use on other websites. You should also avoid writing down passwords or even worse, creating a text file on your computer with all the user names, passwords and site names written in plain text.

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Why People Leave Sites Without Buying

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Why People Leave Sites Without Buying

We all know about how to bring in quality traffic to an online shopping website is important, as well as having good site layout and content that is supposed to make your visitors convert into buyers. We’ve seen many things about the reasons why so many people shop online and buy products from good online retailers. But what about those that leave a site without buying anything? There has been a few online surveys and studies on this topic and here are some of the most common responses given by online shoppers. Also, you will see ways to prevent this from happening to your visitors as well.

Site was slow/not working properly/not loading

This is actually one of the most common reasons as to why people abandon a website and move onto the next one. Having a site that is loading slowly, or is giving database errors all the time, or using a payment processor that’s giving customers trouble when checking out are all reasons as to why some leave a site without buying anything. Obviously, there are ways to prevent this from happening. Use a reliable hosting solution and an appropriate hosting type for your website. If you get thousands of visitors to your site a day, using a shared hosting account may not be the best. Make sure that all elements of your website work and use diagnostic tools that scour your website to make sure everything is in order.

Deceptive advertising/unclear promotion terms

When you advertise something that’s on your site, try to make the advertisement as clear as possible to prevent confusion. For example, putting “50% Off” prominently in an add and then omitting the fact that it’s only for orders of $200 or more is likely to make some visitors turn away, feeling that you lied to them. All this does is wasting bandwidth as many of these people who clicked on your ad would not have seen your site otherwise if they knew the promotion was only for orders of “$200 or more”. So make sure that your ads don’t mislead people into visiting your site. Doing so only generates bad traffic anyways.

Prices too high

This is a popular reason given by people especially those who are more conscious of their shopping budgets. To prevent this from happening, there are some simple steps that you can take. Look around the web and check out your competitors websites. See what products they have and what their prices are. This is a tactic used by many retail establishments as well as online commerce sites as well. If you see that a competitor offers better value, see if there’s something that you can do to beat what they’re offering.

Unclear product descriptions

If you’re selling physical items such as clothes, make sure you include high resolution, detailed pictures on your site. Also, for any product you sell, give all the details that are relevant, like sizes, technical specifications, uses and advantages of the product, etc. Visitors are more likely to buy a product if they have some information about it.

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Selling on eBay: Choosing a Good Drop Shipper: Part 3

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Selling on eBay: Choosing a Good Drop Shipper: Part 3

Now that we have explored some ways to find dropshippers, let’s take a closer look at how you can evaluate a particular supplier to see whether they are legit or not. Here are some of the things to watch out for when you are looking at a dropshipper. These are not conclusive proof that the supplier is just another scammer, but should be seen as red flags telling you to proceed with extreme caution.


  • A recent join date and low amount of feedback from clients


Many dropshipping sites and some online marketing forums have a feedback system that will allow people to leave feedback for each other after completing a transaction. You will also be able to see exactly when somebody became a member of the site.


One thing to watch out for is a member who has recently joined and has no or little feedback on the site. Scammers frequently create new accounts after they begin receiving negatives from clients that they scammed or get banned from the site. Also, don’t let the fact that they’ve completed a few transactions fool you into thinking they must be legit. Some will complete a few transactions successfully at the beginning to build up their “reputation” on the site and then when they see people are starting to trust them, they will simply turn to scamming.


  • Insisting on paying using methods such as Western Union or bank wire


It is true that in some countries where suppliers are based it is not possible or practical to use a payment processor such as PayPal or Moneybookers. However you should be careful about using one that insists on being paid with a method that is not reversible such as by Western Union or Money Gram. Even bank wires are not really safe, as banks in foreign countries will seldom want to help you in the event that you’ve wired a few hundred dollars to a scammer. If possible, make use of escrow facilities that will sometimes be advertised on dropshipping sites. However, here again check to see if the escrow service is legitimate too, as some fake ones have been spotted.


  • Offering items at prices that seem too low


Well if it looks too good to be true, then it probably is. If you see that a supplier is offering merchandise at prices that are far below what others charge for the same item in the same quantity, then you need to ask yourself some serious questions about them. Most probably, the deal is not legitimate and even if they do send something, it may be merchandise that was stolen or is counterfeit.


  • Not providing contact details


If you are going to do some high volume business with a dropshipper, then you should at least have their phone number in case you need to call them if there is a problem with one of your orders. A supplier that doesn’t want to provide one should look instantly suspicious to you.

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Work At Home Offers – Know Which Ones ARE NOT Legit – Part 2

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Work At Home Offers – Know Which Ones ARE NOT Legit – Part 2

Here are some more “scammy” earning opportunities that you will find online. Learn how to recognize and avoid them.

Payment processor / Money transfer agent.

This is actually a very big scam that can cause you to lose a lot of money and also get into trouble with authorities. It works like this: you are contacted by someone claiming to have a company in a foreign country where it is difficult for them to accept payments from customers in America or Europe. They offer you a job where you will receive payments from their clients in the form or checks or money transfers. You will then deduct your commission and forward the rest of the payment to the company that hired you via a money transfer service such as Western Union.

The problem is: there are no “clients”. The checks they send you are either stolen or forgeries. The electronic money transfers you receive come from accounts that were hacked. What will happen is that all the transactions you processed for the “company” (which doesn’t exist) will be reversed, leaving you out of your money. You will probably also have to explain to the authorities as to why you were receiving fraudulent funds.

Shipping agent.

Same scam than above, but with a twist. You will be receiving merchandise for a “company” and then forwarding it to some third world country. Items ordered are often electronics, jewelry, or industrial equipment, basically high value items that can be resold easily. They say they will pay you for each item that you ship to them. Problem is, all of that merchandise was paid for with fraudulent funds. You are quite likely to get in trouble with authorities here again. This scam is often run by the same people who run the payment processor scam as well.

Cash gifting.

The exact way this scheme operates varies. However, in general it works this way: you are told that you can make plenty of money by sending cash “gifts” to people. It all comes down to this: it’s basically a pyramid scheme. For example, you are told that you can make $500 by having 5 people send you $100 each. Then, these people get 5 people each to send them $100 and so on and so forth. Eventually, the scheme collapses as there will come a time where there won’t be enough people in the world left to sign up. The only people that will have made money are those who started the scheme and are at the top, while pretty much everyone below them will lose. This form of “business” is also banned in most jurisdictions, no matter what the promoters say that it is completely “legal and legitimate”. It’s simply not.

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Ecommerce Security Risks And How To Deal With Them – Part 1

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Ecommerce Security Risks And How To Deal With Them – Part 1

As a business owner you may have heard all about the advantages of getting an online presence to help your business acquire new customers and better serve existing ones. But you may have some reservations about the whole thing. One of the main concerns that business owners bring forward today is security. These concerns are certainly valid. After all, it is rare that we see a week go buy without a mention in the media of some high profile security breach. But this should not dissuade you from taking full advantage of what the online world has to offer for your business. Here are some of the most common security threats facing small businesses transacting online and how they can be mitigated:

Payment fraud.

This is the most common security risk that you will face and it can consist of either: a fraudster making a purchase with a stolen credit card or sending a forged check, or a “real” customer making an order, paying with a legitimate credit card and then charging back on the transaction claiming that they never placed this order, never got their merchandise or that it was damaged when they got it.

Fraudulent payments are, unfortunately, a part of the e-commerce world and there is no sure-fire way to stop them. However, there are certain things you can do to bring the amount of fraud close to zero.

First, use a payment processor that uses security measures such as verifying that the address on the credit card and the shipping address match. Especially when it comes to high value orders, do not ship to an address other than the billing address. Most payment processors have automated tools that evaluate each order and can help determine the chances of it being legitimate.

Verify the customer’s information yourself before shipping the item. Call them on the phone number provided to ensure that it is valid.

While doing business internationally is great, be very careful about shipping to certain countries where internet fraud is rampant such as Nigeria, Russia, Indonesia, etc. A common story used by scammers is that of a wealthy businessman based in the USA ordering a high priced item as a “gift” to a relative who just happens to be working in a third world country known for credit card fraud.

If a customer sends you payment by certified check, call the issuing bank to ensure that the payment instrument is legitimate. Just because a check has cleared your bank account does not mean that it is genuine. Stolen or forged checks are sometimes used by scammers when ordering high priced items like jewelry, industrial equipment or electronics.

Use a courier service that gives you the ability to trace shipments and requires a signature on delivery. Any item over a hundred dollars should be sent insured for its full value. This will prevent dishonest customers from claiming they “never got the package.”

And most importantly, use common sense when processing orders and always err on the side of caution.

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Becoming A Merchant – The Other Side Of CPA – Part 3

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Becoming A Merchant – The Other Side Of CPA – Part 3

If you want to be the owner of your own CPA rebill/trial offer, there is one more thing that you need: a payment processor which will bill the customers. Obviously, anyone who runs any type of e-commerce site needs one. However, the business model behind a rebill offer will require that you put in a lot of effort into selecting a good payment processor. Let me explain:

Most (probably all) payment processing companies and financial institutions in the United States will not want to touch you with a ten yard stick if you run this kind of site. So you can pretty much forget about going to your local bank and asking for a merchant account. They won’t approve you. Or if they do, you will get shut down way before you even get your first check from them. Why is that? After all, what your site is selling is perfectly legal, right? And so is running a membership site that automatically bills the customer after the trial period is done.

Even with that, you will get plenty of fraudulent transactions and chargebacks. Wondering why the fraud rates for these sites are so high? After all, it’s not like you are selling high end electronics or jewelry…

The reality is that free trial sites are often used by fraudsters. But not for the product, which they don’t care about anyways. They use these sites to test if a stolen card is valid and can be used online. Problem is, they of course won’t bother to cancel the trial, since after all, it’s not their card. You then bill the card the regular rate. When the cardholder receives their bill, they then realize that something fishy is going on and report the fraud.

Chargebacks will be another major concern to you. Even though you must put clearly readable text on your site which states that the user will be charged (and the amount) after the (7 day/14 day/etc) trial period and the user should have paid attention to it, you will still get people who don’t cancel and then get surprised when they get billed. Either they weren’t paying attention when they were ordering, or forgot to cancel and now don’t want to pay. What they do next is contact their financial institution and claim that they never authorized the charge coming from your site, resulting in a chargeback.

Due to all these reasons, you need to have what is called a “high risk merchant account.” These are the same types of merchant accounts often used by various online businesses such as adult sites and gambling sites. The merchant accounts are issued by an offshore bank, usually based in a European or Latin American country. You can find plenty of high risk merchant account providers simply by doing a quick Google search. You can also ask for advice on various forums dedicated to online business, or more specifically to payment processing, in order to determine which payment processor is the best to deal with. It is also a great idea to have a backup account issued by a different processor should there be an issue with your main one.

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