Paypal Website Payments Standard

This is the most common and cheapest. To use this method you need a business account with Paypal and to link your regular bank account to it (all of which is free). Then when a customer confirms their order in your online shop they automatically get redirected to the Paypal site to put in their credit card details and complete the payment. This method is cheap because Paypal only charge you a small percentage (~2%) of the total transaction and it is one of the most secure because Paypay is the largest credit card processor of this type and so have the highest security standards. When the customer completes the payment at the Paypal site they are automatically redirected back to your site for a "Order Complete" message. The only downside to this method is that the purchasing experience can appear a bit disjointed to the customer because they are redirected from your site to the Paypal site and then again back to your site. But it's the best way to start off with while you're building up your store and adding your products to your site (because there are no large upfront setup fees required to start using it).

Using Your Existing Facilities

If you have credit card processing facilities, like at your shop or business, that you already use for day to day transactions then you can use these with your online shop. With this method your customer puts in their credit card details right there on your site and they are encryted and stored in your site's database. Only you can get at them through the admin area of your site and because they are stored encrypted, if anyone were to "hack" into your database all they would see is gibberish (instead of credit card numbers). The customer's encrypted credit card details stored in your database are also set to automatically delete after a certain period of time. You would have this auto-delete period set long enough for you to get the details and process the payment. Although this method is much more secure for the customer than other credit card payments commonly done (like over the phone), your bank may frown on this method, simply because you're storing the details in your database for a period of time.

To accept payments in this way you would require an SSL certificate on your site. This is the little padlock that appears in your browser when you are on "secure sites." This also encrypts data. It encrypts data on-route or as it is being sent over the cable or phone line that your customer's computer is connected to. So if anyone were to tap into the physical phone line or cable (like a rogue Telco company employee) and intercept the data being send, again all they would get is gibberish rather than credit card numbers. The SSL certificate required for this costs approximately $100 per year.

Third Party Processors

These work like the Paypal method above, it is another company that processes the credit card for you and puts the money in your account. In the U.S. there are dozens of these, all very cheap to use, but in Australia there are only a few, all rather expensive. Your bank won't frown on this method because you're not storing details. And the customer stays right there on your site to complete the transaction, unlike the first Paypal method above. You also need the SSL certificate explained above for this method.

This is what happens: The customer puts in their credit card details on your site to pay for their order. The details are transmitted to the 3rd Party processor who processes the transaction in real time (right then) and if it is successful, the "Order Complete" message is displayed to the customer. The customer doesn't see this communication with the 3rd party processor. And they stay right there on your site. In this way it's better than the first Paypal method because the customer isn't being redirected to Paypal and then redirected back to your site.

Eway is an Australian company that offers this service and at this time seems to be the cheapest. And Paypal offers this service too, but it's not free like their other service above. Eway charge around $400 a year plus nominal transaction fees. And PayPal "Website Payments Pro" around $1000 a year plus nominal transaction fees.

There are other ways to accept credit card payments online, and they are not necessarily better or worse. But the above are the ways that are compatible with this particular software.