How to Take Your Customer's Money

author/source: Miles Galliford

The best and most profitable specialist content websites are like a traditional trade magazine. They generate multiple revenue streams from advertising, affiliate deals, sales of products and merchandise, subscriptions and organizing events.

For a publisher to be able to achieve the goal of multiple revenue streams, it will have to integrate payment processing into its site. This will enable the site to sell products and services (such as downloadable reports and software, branded merchandise, software, etc), charge subscription fees for access to premium content and promote and sell events (seminars, webinars, courses, etc.).
This can be a torturous process unless you know what you are doing.

This is a quick guide to getting started, based on my experience of launching sites all over the world, including the U.S. and the U.K.

Ways of Taking Money

The first task you will need to undertake is setting up the means to process the payments. There are essentially three ways to do this:

• An online payment provider such as PayPal or Google Checkout
• A payment service provider (PSP) such as WorldPay, Patrasys or NetBanx
• A combination of a payment gateway and a merchant service account

I will quickly go through the pros and cons of all three.

Online Payment Provider

PayPal is the world’s biggest online payment provider. Most people on the Internet have either used PayPal or are familiar with the service it offers. PayPal enables an individual to receive a payment from a customer by credit card. PayPal manages the transaction from the time a credit card number is entered into a website to the time the money is deposited in your bank account.


• Simple and cheap to set up
• High acceptance rate of new clients
• Global
• Improving all the time; customers without a PayPal account can still pay you through PayPal


• A nasty habit of freezing clients’ accounts, and it can be tricky to get them reactivated
• Very poor customer service
• Perception that PayPal is a service associated with ‘cheap’ websites; this is changing as PayPal launches new services and has started to appear on bigger e-commerce websites

Google Checkout is an alternative, but it is years behind PayPal. It is worth keeping an eye on.

Payment Service Providers

PSPs are similar to PayPal. They manage the whole transaction from the credit card being inputted into a site to the funds being deposited in your bank account. The biggest PSP is WorldPay ( Others include SecPay (, Netbanx ( and Patrasys (


• Single provider takes care of the end-to-end transaction process
• High acceptance rate of new clients
• Generally good customer service


• Very expensive set-up and transaction fees
• Difficult set-up and integration
• Often hold funds for up to 60 days, which can kill cash flow for a small business

Payment Gateway with Merchant Service Account

All major banks have a merchant service division which is responsible for enabling clients to process credit cards. These are called merchant service providers. If you go to your bank and say that you want to start accepting credit cards on your website, they will point you in the right direction. Once you have a merchant service account, you need to have a payment gateway. This is a service that enables the transaction to take place on your site. It checks that the credit card is valid, checks for fraud and verifies all the personal details. Most banks try to sell website owners both their merchant service account and their gateway product. In my experience, bank-provided gateways are clunky, hard to integrate and very expensive. There are far better services in the market. In the U.K., I use Protx ( and in the U.S., (


• Cheapest transaction rates
• Rapid transfer of funds into your account
• Good customer support from most banks


• It can be very hard for new businesses with no trading record to get a merchant account.
• There can be problems getting a gateway and merchant service account to work together.
• Banks can be reluctant to allow annual subscriptions.


My Recommendation

If you are starting a new business with no trading record, my recommendation is to use PayPal to get started. Once you have a trading record, go to your bank and apply for a merchant services account. If you get one, then switch to processing payments through this account and a cheap gateway service.


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