online payment options

If you plan to sell things over the Internet, you'll also need to plan out how people will pay for them.

Collecting money online:

  • Credit card. The most basic payment method requires a merchant account and a secure server to process the transaction.

  • Online cash. Online cash services, such as PayPal and Yahoo! PayDirect, let you exchange money between two online accounts set up for this purpose.

  • Micropayments. Micropayment services will someday allow you to pay for services in tiny increments a few pennies or less.

  • Cash, check, or money order. These are sent by mail.

credit card Credit cards may be the most familiar method of collecting online, but they aren't the cheapest or the easiest. If you have an existing business, you already know about merchant accounts. If you don't, you're about to learn. In order to receive credit-card payments online, you have to first establish a merchant account with an FDIC-insured merchant bank.

Be warned: This is a bureaucratic process, and a costly one. Between account set-up fees, processing fees, and transaction fees, you'll pay quite a bit for the privilege of accepting credit cards. So smaller merchants sometimes use cash-payment services like PayPal.

online cash Online cash isn't exactly cash. These services like PayPal and Yahoo! PayDirect play the middleman, letting you transfer money directly from one person to another, while ensuring that it actually gets where it's going (and taking a cut for themselves, of course).

"You'll be happy to know I just invested in a company which is developing technology which will allow me to wirelessly beam e-dollars to you, but to answer your question: Sorry dude, no change."

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PayPal is the best known e-cash service, commonly used on auction sites like eBay, where individuals are selling to each other. It's a simple system. Users set up a PayPal account by transferring money from a bank account, charging it to their credit card, or sending a personal check. They can then buy online using this account. When someone buys from you, the amount is transferred from their account to yours (with roughly a 3% commission).

micropayments Micropayments allow users to pay tiny amounts of money a few pennies, say, or less for a service they use online. This approach would be perfect for content sites of all sizes: The tiny payments would mean little to any individual consumer Why not pay a penny for an article, so long as it's easy to do so? but it could add up to significant revenues for the site.

The trick, then, is making it easy. And that's the missing piece in this puzzle. Although several early players attempted to put such a system in place, none gained critical mass and they all died trying. File this idea lovely as it is under "someday."

"There was a time when a fool and his money were soon parted, but now it happens to everybody."

Adlai Stevenson

action section: how will you make money?

It's a million-dollar question if ever there were one: How will you make money online?

How will you make money?

(Check all that apply)

Generating leads for an existing business

Product sales

Advertising

User fees and subscriptions

Match-making

If you're selling products, what kind?

A few unique products

Gifts or specialty items

Commodities

Considered purchases

Big-ticket items

Specifically, what will you sell?

How many items will you have?

If you're selling advertising, what kind?

Banners

Buttons

Text-based links

Pop-up ads

Sponsorship

Who will advertise on your site?

If you're selling subscriptions or user fees, how will you charge?

Subscription-only service

Tiered service

Pay-as-you-go service

What service will you be selling?

If you're match-making, how will you charge?

Subscription-only service

Tiered service

Pay-as-you-go service

Who or what will you be matching?

How will you collect money?

Credit Card

E-cash service like PayPal

Micro-payments

Check or money order, in the mail

I won't collect money online




The Unusually Useful Web Book
The Unusually Useful Web Book
ISBN: 0735712069
EAN: 2147483647
Year: 2006
Pages: 195
Authors: June Cohen

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