How can I take online credit card payments without using a third party payment service provider?

February 8, 2006 8:51 AM

How can I take online credit card payments without using a third party payment service provider?

Our ecommerce website (which uses a home made shopping cart) currently processes credit card payments via a third party company.

At the moment, using a third party costs us around £1500 a year in monthly and per transaction payments to them.

In the near future we'll be rebuilding our site; one thing we want to include is user accounts to store shipping and billing addresses, order and credit card information etc. What do we need to do to process and store credit cards ourselves, rather than use a third party? What are the costs and pros and cons?

We have our own dedicated server plus a internet merchant account.

posted by Hartster to computers & internet (7 comments total)

If you're willing to use an open source cart system like eCommerce or ZenCart and your clearing house is supported by them, that's it. 1500 pounds a month is just nuts. That's above and beyond your discount rate of 2.x%?
posted by phearlez at 9:07 AM on February 8, 2006

You have a merchant account - that's a start.

You still need a 3rd party involved for the "gateway" (the internet equivalent of a credit card swiper at a store).

If you write the code (or, per phearlez's remark, use prewritten code like OSCommerce) that sends the card info through the gateway, you're set. Really, though, the processing/charging/economic stuff is being done by the gateway. I take it your gateway is too expensive?

What gateway do you use right now? I would recommend Authorize.net as the most well known/trustworthy one out there, and it is reasonably priced..
posted by twiggy at 9:10 AM on February 8, 2006

A similar question.
posted by zsazsa at 9:18 AM on February 8, 2006

Our gateway (Secpay) currently charges 20 pounds a month plus 20 pence per transaction with on average 500 transactions a month.

I could use their API to do it from our site (I think) but the costs will be the same.

Basically, am just wondering whether I need to use a third party or whether we can handle it ourselves. (am guessing that Amazon etc don't need to use one)
posted by Hartster at 9:37 AM on February 8, 2006

Storing credit cards introduces a fair amount of liability, and I think that the credit card providers will require some pretty serious levels of security to allow you do do that. I would be leary of trying to do something like that yourself. A better option as suggested above might be to shop arround for more favorable rates from a different merchant bank and/or payment gateway.

What is the volume of your transactions each month?
posted by willnot at 10:18 AM on February 8, 2006

willnot: read his comment, he says 500 transactions a month. :)

Personally, hartster, I think you'd be taking on WAY more liability than you want by a) storing the credit card numbers and b) processing this yourself. There's a reason that companys like Secpay and Authorize.net exist - it is a PAIN IN THE BUTT to process these things yourself, and dealing with insurance for processing the numbers yourself would probably cost you more than 1500/year anyway.
posted by antifuse at 1:36 AM on February 9, 2006

Thinking about it and having a bit of a googlehunt around for information on storing CCs, the advice to "avoid it" seems pretty spot on. I think we'll end up with a compromise system like http://www.cdwow.com whereby we'll store all other information (order history, billing and shipping addys) but the customer will have to input their CC each time. We're not going to lose any sales this way and the % of turnover that we have to pay to Secpay, now I crunch the figures, is actually ridiculously small. Plus I won't have nightmares about getting our site/server hacked. (Happened once a couple of years ago (third party software security hole in a site running on the server) and I had sleepless nights even then, and that was without having to inform a 1000 people we've given their CC numbers to the Bulgarian mafia)

Anyway; have marked willnot and antifuse's answers as the best as there'll be the ones I'll be basing my answers to sales, marketing and accounts on. Cheers AskMe!
posted by Hartster at 4:26 AM on February 9, 2006