Friday, September 30, 2011

Getting Paid for Your Resume Services Online: Secure Online Payment Systems


Earlier this year, I closed the credit card merchant account I'd had for the first 14 years of my resume writing business. It was a tough decision, because I liked having the ability to process credit card payments offline. (I had clients fill out a Work Authorization form and fax, mail, or email me their credit card information and I'd charge the initial deposit to their card. When the project was finished, I'd bill the card for the balance.) The system worked pretty well, but the fees and compliance requirements were ultimately what led me to close the account.

It wasn't the transaction fees that were driving me crazy -- it was the monthly minimums and fees associated with processing the transactions. $.15 here, $1 there ... and if I didn't process a certain amount of transactions each month, I'd be billed for a $25 minimum anyway. Ugh. The last straw was when I spent an hour working my way through a labyrinth of questions with PCI compliance. I agree that card data security is important, but it shouldn't take an hour of my time and two calls to the support hotline to meet the compliance requirement.

The majority of all resume writers accept credit card payment for their services. If you haven't needed it yet, there is a very good chance that at some point in time you will need a mechanism to accept online payment from your customers. But for many resume writing businesses, the costs of setting up their own merchant credit card accounts, and satisfying all of the security and recordkeeping requirements that apply to such accounts, are too high.



Ultimately, after conducting research into the issue, I decided to process all client payments using PayPal's standard service online. It's not perfect (they're notoriously bad about advocating for the merchant in cardholder disputes, but I only had two disputes in 14 years in business, so I didn't worry too much about that), and I've had a few clients who didn't want to use PayPal to process their credit card. (I gave them the option to send a check, but told them it would delay their project starting and completion, as it takes time for the check to clear.) Also, if you don't link a social security number to the account, they will often impose monthly limits on how much money you can transfer out of the account into your bank account. (But a good way to avoid this is to link a PayPal debit card to the account and use that to make purchases.)

PayPal is the well-known heavyweight in online payment systems, and their credit card processing services are likely to be of most interest to businesses. PayPal's two primary business products are "Website Payments Standard" and "Website Payments Pro." Website Payments Standard is a great low-cost solution for businesses that want to accept credit card payments. There are no monthly fees associated with this service, so a business only pays a small flat fee plus a small percentage of the transaction value when someone buys something from them.

Website Payments Pro requires the business to pay a monthly fee, but in return the business gets to handle the entire payment transaction on their own site. With Website Payments Standard, the customer is sent to the PayPal.com website to actually enter credit card information and complete the transaction, before being sent back to the merchant's website. The fee for Website Payments Pro is currently $30 per month, and some businesses find that being able to keep their customers on their website for the entire transaction is worth the extra fee. (You also have to "apply" to be accepted into the Website Payments Pro system, but the majority of applicants are accepted.)

Other online payment systems have met with differing degrees of success. WebMoney is a secure service for online transfers, though it is less popular in the United States than it is in Russia and some Far East countries. Similarly, CashU is popular in the Middle East and North Africa, but has limited value in the United States.

The issue for these other services is something of a "chicken and egg" problem -- without many domestic merchants accepting the payment system, fewer people in the U.S. sign up for it. But with fewer U.S. residents having accounts on those systems, there is little reason for businesses to start accepting payment through that system.

In addition, some early adopters may have had bad experiences with other systems. E-gold was a popular a digital currency system in the early 2000s, but the legal problems of the company and its management led to accounts being blocked for a period of time. It therefore remains to be seen whether nascent online payment systems such as Bitcoin will continue gaining strength. I also considered Square, but didn't yet have my iPhone.

Because an increasing amount of online commerce is occurring on mobile devices such as smart phones, it is also worth highlighting a few secure mobile payment systems. Mobile payments are not quite as mature as the online payment space, but there are a few different services that are likely to become bigger players in the future. Google Wallet is currently a leader in the secure mobile payment space for android device users. Visa is also pushing its own product (called Visa Wallet) in the mobile space.

Regardless of what happens with services mentioned above, it's likely that the secure online payment mechanism will become increasingly popular in the future.

6 comments:

  1. Great topic and overview of payment processing options! I too use Paypal and love the flexibility of creating customized invoices and the reports I can run out of their system.

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  5. I truly like to reading your post. Thank you so much for taking the time to share such a nice information.
    Resume Resource

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