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Enter the middleman: alternative online payment options take the pain out of e-merchant accounts.

These days, a good online company embraces the latest technology. E-merchants have long taken advantage of the efficiency of services such as PayPal to help them turn casual surfers into shoppers. But by adding more than one online payment option to their Websites, companies can convert one-time visitors into repeat customers. This means doing a little bit of homework to get the right combination of payment methods that suit your business needs.

"If you're willing to do the research, finding online payment options isn't a technical task anymore," says Joe Thompson, 28, a computer software specialist. Thompson launched his online payment services company, Thompson Merchant Services Inc. ( in December 2002 after a short stint as an applications engineer at GO Software, (a company now owned by electronic payment technology giant VeriFone).

By offering merchants an array of payment processing services, Thompson serves as a middleman between online retailers and their customers. For $16.95 a month and a 2.27% transaction fee, Thompson offers online merchants several software solutions for online payment as well as customized consulting services. In addition, the company provides the NexCommerce Payment service, an adaptable merchant account solution that comes with 24-hour technical customer support via phone and e-mail.

As his company grew, Thompson realized that he could attract more clients by broadening the range of online payment alternatives. Business really boomed in 2004 when he added the Touch Tone Payment Processing option to his service roster. The move, which allowed merchants to accept payment from any phone line, almost immediately bumped his clientele base from 600 to almost 1,400 clients. "I signed close to 700 merchants just by adding one new service," he says. "The more products we were able to offer, the more clients we were able to get," says Thompson.

For merchants interested in setting up an e-commerce Website, Thompson recommends creating an online merchant account and payment gateway, one of the services his company offers. A merchant account allows customers to purchase products via credit or debit card. (For additional research, check Websites such as,, and "One very important thing that merchants need to know is that having an actual merchant account is similar to credit in that it builds merchant history," says Thompson. "If you open a real e-commerce merchant account backed by an association bank you'll have an easier time opening other merchant accounts because a provider will be able to see that you have a reliable processing history."

Using a third party account provider means having to consider a few key points that could become critical to your company's survival online. For example, "In a dispute over an online purchase," says Dave Walton who runs the Web-based business directory, "a third party account provider can make a decision on the merchant's behalf as to whether or not funds are going to be returned."

So if a dispute between a consumer and the merchant comes up, it's the merchant who forfeits the opportunity to handle the dispute and consequently loses the sale. And since third party account providers normally charge a transaction fee, Walton emphasizes that merchants consider the volume of their business before relying on an account provider.

In addition to, which has a database of roughly 50,000 African American businesses nationwide, the 43 year-old Walton works with a consortium of companies to publish a printed version of The Black Pages, an African American yellow pages. Walton also says that once a business owner understands the three basic methods of paying for products online (i.e. credit card, debit card, electronic checks), the next step should be setting up a flexible virtual terminal--or online cash register that works on your behalf. "If someone is surfing the Web at 2 a.m. and purchases your product," he says, "that terminal can be there to receive your payment."
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Author:Calypso, Anthony
Publication:Black Enterprise
Geographic Code:1USA
Date:Jun 1, 2006
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