Hi Aquamarine,

There is indeed a cost for transacting via a credit card company. If you are a start-up and want to go with a transaction agent like Worldpay, it will cost circa 4% on each transaction.

There could be a host of other reasons though but this might be why.

Phil

Originally posted by: aquamarina1

Hi there

Can you tell me why some companies do not accept credit card payments on their websites? Like many gambling sites do not. Is there an additional cost to be made to a payment provider or to a bank? Or maybe there is an increase risk (fraud etc)? 

We are about to start up a small venture and cannot really decide why some of our competitors do not accept credit cards on their websites... Any help will be appreciated. 

Hi aquamarina1,

You are quite correct, transaction cost and the possibility of fraud are the two main reasons. In some instances, a business may not be able to get merchant facilities, because they are offering a particularly risky product.

Transaction costs vary depending on who you use for your merchant account and on your volume of transactions. You can expect to pay anything from 3% to 5%.
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P.S. We are thinking of doing our online payments with Nochex, and as far as we understand it is the same charge for credit cards as there hsve for debit cards. Can anyone using Nochex confirm that? If that's true, there I guess that's one less reason to have of why not to accept credit cards on our website.

Also, does anyone know the following - is it possible to restrict the cards that we use on our website? In other words, can we tell Nochex that we want to use only debit cards? Is that common practice?

Thanks once again for anyone who can reply.

The problem with peer-to-peer payment solutions such as Nochex and PayPal is that they require your buyer to sign up for an account. This makes the whole process much more clunky, as well as looking quite unprofessional.

You can get away with this in some situations (e.g. it's ideal for Ebay sales, or perhaps if you're selling small, low value items), but for most businesses selling online via their own site it is not a good option from a customer trust point of view.

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PayPal no longer requires customers to have an account, either.

Many customers actually prefer to go through the PayPal site to make payment - it's familiar, and they are assured of it's safety. It also allows them purchase using multiple funds - e.g. existing balance from Ebay sales, credit card or bank transfer. Compared to paying on adodgywebsite.com, it can be an attractive option.

Some retailers find they actually get fewer chargebacks when customers pay via PayPal. It used to be seen as an unprofessional solution, but even blue chips are starting to accept it as a payment system.
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Dave - clickedon.co.uk

I Use Paypal and have been very happy with them. It is very secure and most people recognise them.

However, On one of my other site I use www.2checkout.com and also they are very good and the customer service is Excellent. I recommend them highly. Go and checkout their website.

Regards
Para
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I noticed that Paypal are now offering a Virtual Terminal for Offline transactions.  There is currently no sign up fee.

@aquamarina1

you answered your question, that is right... things that companies look at is the cost of the transaction which can be relatively high and yes the risk of fraud and tapping into the account involved....
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if a gambling website doesn't accept credit cards, how else would they charge their customers?
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I know, without accepting credit cards, what other options are there, besides specific payment processors?
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i feel it is beneficial to offer a selection i.e. paypal and credit card.

There are many card companies to help such as protex, nochex and streamline and yes they do require a surcharge for each payment that goes through.

Most people will prefer paypal as it is safer over cards, generally speaking.

What I have done is offer three payment provider solutions and, within them, the paying customer can choose his option.

1. I use Paypal, which allows the customer to either use his/her Paypal account or a simple Credit Card transaction (using the Paypal service to process the payment, but the customer does not even have to be with Paypal). Paypal also allows higher amounts than NoChex (until some trading history is built up with NoChex) and allows non-Sterling transactions.

2. I use Nochex. A straightforward Payment Service Provider. At the start-up level, is Sterling only. Gets around anyone "scared of" Paypal.

3. I use Google Checkout. The customer inputs his Google Checkout details, not his Credit Card details and the money arrives from Google. Google, in turn take the customer's money from the Customer's pre-registered Credit Card.

Each service gets its transaction fees taken out of the advertised price - you need to pay careful attention to these, especially if you are selling low-value items, where an x% plus 20p could make it very expensive - if that 20p is a high percentage of the price.

With these three options, no trading history is required. And you don't need a Merchant Bank Sponsor.

i would never have a credit card - if you cant afford it your not ment to have it