Create an online Card

April 2, 2016

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This is part 4 of a 5 part series on how to create a profitable online store. Your online store is worthless unless you can accept payments from your end customers.

There are many different ways to accept payment. For example, you can accept payments through Paypal, or even check/money orders. But despite the many payment choices available, the most important one is the ability to accept credit cards online.

Looking at the payment statistics for our online wedding linens store, 97% of our customers use a credit card to checkout and the other 2.9% use Paypal.

Less than .1% use check or money order. For an online store, paying by credit card is an absolute requirement. In this article, we will discuss the different options on how to process credit cards online.

Processing Credit Cards

Virtual Terminal
First off, there are 3 main ways to take credit cards online. The first way to accept payments is to sign up for what is called a virtual terminal.

Basically how this works is that when orders come in via phone or web, you then manually enter in the credit card information on a secure terminal.

However, since the focus of this series is on building a fully automated online store, this is not a viable option in the long run.

Process Credit Cards On A Third Party Website
The second solution is to have a link from your online store during checkout that takes the customer away from your site to the website of your payment vendor.

The customer then enters in their credit card number on your vendor’s website where the payment is processed. Once the transaction is complete, the customer is then redirected back to your online store. The standard Paypal account for example allows you do this for free.

The main disadvantage of this free solution is that processing credit cards is roundabout and confuses customers. Why should a customer be taken away from your website to another site that looks different only to be redirected back once again when the payment is made?

While processing credit cards this way offers the easiest setup, it can have severe consequences on your conversion rate. For example, the conversion rate for our online store was almost 50% less when we accepted credit cards in this fashion through Paypal Standard.

In fact, accepting credit cards this way was probably one of the main reasons business was extremely slow when we first opened our online store.

Process Credit Cards Directly On Your Store
The best way to process credit cards is to have a merchant account with a gateway and process credit cards directly from your online store.


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