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This is an urgent Net Watch article.  There have been some real changes in the way that Visa and Master Card expect web vendors to accept credit cards.  In an effort to curb on-line fraud they now require all web orders to be processed in real time.

It used to be easy to simply have your orders e-mailed to you for you to process with your in-house merchant account.  Well no more.  If Visa or Maser Card find that you are processing orders in this manner, they will no longer allow you to process cards.

The solution is to move to real time processing.  We have been working with a merchant account company to bring our clients the easiest possible road to compliance with the new rules.  I wish that I could say things have gone totally smooth, but there have been some bumps in the road.  We were hoping to have everything up and going by the release of this article, but there are a few bugs we are still working out.  Once we are done, we will be able to transition any of our current clients directly to this new system.

Here is the basic breakdown of how most people used to do things.  They had a web site that sold products.  When someone would order products, they would receive an email and then process the information through their in-house terminal and ship out the products. This new system works differently in that the process is handled all automatically, in real time.  The customer selects the products, chooses checkout from the shopping cart screen and after filling out all the necessary contact and credit card fields, the information is passed directly to a “gateway.” The “gateway” connects directly to the merchant account processor, verifies the charges, and completes the sale. 

Of course there are charges for the gateway services, about $30 to $50 per month as well as a one time setup fee of around $300 to $500 depending on the provider. There is a benefit however.  Most transactions that are not swiped at the register are considered “phone orders” and the vendor is charged a much higher rate, as much as 3.25% or more.  By setting up a real time system a vendor can get the rate down to 2.5% (with approval from the processor).  This change can mean big savings for a high volume site.

The bottom line is that web sites that want to take credit card orders will have to comply to the new rules or risk being banned from taking credit cards.  Our hope is to make the process as inexpensive and pain free as possible.  Once we have all the bugs worked out, and all the numbers together, we will issue a special notice with all the details.  You can always give us a call if you have any specific questions.

There is a “free” way to take credit cards in real time.  Many have heard of PayPal, a very popular on-line service used primarily by EBay users.  They will give you a free account, and provide a secure gateway, but you will have to pay 3% per transaction.  Your customers will also have to fill out forms twice.  Once on your page and once on there page as verification.  If you are just starting out, or your site sells a single item, this may be the best answer for you.  Please visit http://www.teklowe.com/Balusters_Mediterranean.htm as an example of how this works for a single item. This bypasses a shopping cart and goes directly to a page where your customers picks the quantity and fills out the necessary information to complete the sale. If you currently have a shopping cart please visit http://www.carolinesandlin.com for an example of an integrated shopping cart connected to PayPal.  Currently we can transition any of our merchant sites to PayPal for real-time processing.