What High-risk Merchants Need To Know About Magento Authorize.net Credit Card Processing
Are you a new online merchant that may fall into the classification "unqualified" to accept credit cards for payment? What do I mean? Perhaps you fall into a long list of industries that are subjected to unreasonable rates and high reserves because you are perceived to be more "risky" than more common ecommerce organizations. In some cases you may not even be considered for a merchant account by some credit card processors.
Due to the large amounts of information that you may have been provided about how to accept credit cards online, you may find the information to be quite complex and confusing. Generally, most new online merchants who have elected to use Magento for an online shopping cart have questions they need answers to.
1. What is Magento?
Magento is an open source (freely available and popular) online shopping cart. In order for merchants to accept credit card payments online, they generally need to apply for a merchant account from their bank along with a payment gateway account. Magento offers flexibility and control over how your e-Commerce store looks and functions online.
Depending on the size of your business, there are three Magento solutions that you can choose from. For small business owners just starting out, there is Magento Go, a hosted eCommerce solution for those of you that have great expectations of what you want to accomplish. With features like premium hosting, flexible design, powerful marketing tools, and Magento Connect "App" Store, it's easy to see why more than 150,000 merchants put their trust in this eCommerce platform.
Magento Go puts you in the driver's seat for designing your store to support your brand, products and customers. You can upload your logo and choose from many different templates that have already been custom designed for you so you can launch your store quickly, without any design knowledge required. For more advanced individuals that know web design or work with a web designer, the possibilities for your very own look, feel and customization is endless.
Magento Go has a wide assortment of features that are made available to you with all the tools and functionality you need to design and operate your business the way you want. As your business grows, you can upgrade to the Magento Enterprise Edition for mid-sized businesses or even to Magento Enterprise Premium Edition for large, complex businesses.
2. What is Authorize.net
Authorize.net is a payment gateway that combines with Magento and sends the transaction to your merchant account or your processor -- quickly, efficiently and inexpensively. Authorize.net is only one of several payment gateways and manages the routing of transactions similar to a credit card swipe machine you might find in your favorite local walk-in retail store. The major difference, however, is that this payment gateway uses the Internet as opposed to a phone line. With the many features and options available from combining Magento and Authorize.net, there are a wide variety of customization options available to high-risk merchants.
3. What is the Difference between Authorize.net and a Merchant Account?
Basically, Authorize.net is intricate software that works with Magento or other online shopping carts or software systems by sending and receiving data back and forth to your merchant account. Authorize.Net manages the complex routing of the data on behalf of the merchant (in this case you). Let me take you through some basic steps:
• Your customer purchases something online through your shopping cart.
• Authorize.net does all the legwork by first passing the secure transaction information via a secure connection to the processor. The bank processor for where you have your merchant account submits the transaction to the major credit card network. That credit card network then routes that transaction to the customer's bank.
• The issuing bank approves or declines the transaction and sends the information back to the processor who then sends it on to Authorize.net.
• Authorize.Net stores the transaction results and sends them to your website for the customer and merchant to see.
• The issuing bank sends the appropriate funds for the transaction to the credit card network, which passes the funds to your merchant account.
• The bank then deposits the funds into your bank account.
• Authorize.net does all the legwork by first passing the secure transaction information via a secure connection to the processor. The bank processor for where you have your merchant account submits the transaction to the major credit card network. That credit card network then routes that transaction to the customer's bank.
• The issuing bank approves or declines the transaction and sends the information back to the processor who then sends it on to Authorize.net.
• Authorize.Net stores the transaction results and sends them to your website for the customer and merchant to see.
• The issuing bank sends the appropriate funds for the transaction to the credit card network, which passes the funds to your merchant account.
• The bank then deposits the funds into your bank account.
A merchant account is a special kind of banking relationship that you apply for. Its purpose is to transfer funds captured from credit and debit card sales and transfer them from the purchaser's credit or debit account to the merchant's existing business checking account.
Credit card processing and accepting credit cards online can be a little overwhelming at first. High-risk merchants oftentimes find themselves at a loss due to wanting to limit any high reserves and high fees they might be charged. That's why it's so important for high-risk merchants to get the answers they need pertaining to Magento and Authorize.net credit card processing. If you are one of those people, do your research and make sure that you understand thoroughly the information that is provided to you when first starting out. Then get out there and become the success you have always wanted to be!