Guide to Setting Up eCommerce Payments

Research undertaken by Streamline last year saw that nine out of ten SMEs see the internet a profitable place to do business, and almost half found the set up costs to be lower than they anticipated.

With millions of active internet shoppers increasing their online spend year-on-year in spite of the recession , the potential benefits of selling online have never been greater.

We have asked Jayadeep Nair, VP, Small Business & New Markets at Streamline to tell us the key things that SMEs who are considering setting up online need to know to set up eCommerce payments, and how to protect themselves from fraud or legal issues.

Website Construction
The important first step to setting up online is to create a website which clearly displays your goods and services. Making a decision about your domain name and hosting site can be overwhelming, but off the shelf, all-in-one e-business packages are available. These are often a very simple and cost-effective way to create your online presence.

Banking Essentials
You will need to open a Merchant Account – a bank account specifically designed to process online credit and debit card charges, and to transfer the funds before you set up online. Although these services are readily available from several banks and financial institutions, their specifics can vary so it is worth doing some research before you sign up. It is important to ensure that your provider accepts all payment methods, including multiple currencies, and offers fraud screening services so that you have peace of mind and don’t have to work with multiple suppliers.

Legal Regulations
E-business trading brings with it a few extra regulations that you must comply with, such as Distance Selling Legislation, HM Revenue & Customs, Health & Safety and the Data Protection Act 1998. These include terms and conditions that your customers can print off, displaying information such as your business name, address and contact details plus clear prices and logos for the cards that you accept. It’s crucial that you adhere to these.

Fight Fraud
The most important step is to establish a fraud policy setting out what should be done if fraud is suspected and ensure that all members of your staff are trained to act. When an order looks too good to be true, it probably is. Frequent, late night, high quantity or high value orders where a shopper orders an unusually large amount of an item without preference for the size, colour, make or model should be investigated. Identifying fraud can be done in two ways – manually and automatically. A combination of both is the ideal scenario.

Make the most of industry tools like Cardholder Authentication, Card Security Code and Address Verification Service checks. Use these along with fraud screening measures that include technology to filter card transactions, UK third-party name and address checking techniques and methods of validating cardholder data. Screen your transactions and consider applying risk scoring and alerts to flag suspect activity that merits further checks. You may be able to design your own in-house system or ask your payment service provider.

Manual checks include comparing new shopper information to data you already hold, and keeping records of previous fraud attempts. Look for patterns such as similarities between transactions and repeat use of the same shopper name, e-mail address or IP address. Test their contact details to see if they work – send an e-mail and call the telephone number. You may also ask for copies of utility bills, card statements, passport or driving licence (with any sensitive details obscured). Investigate further anything that you consider suspicious.

We also recommend that you regularly search the Internet for websites using similar names to your own. These may have been set up to impersonate your company illegally.

Offering online shopping to your customers can greatly increase your revenue, and setting up online is relatively easy. Just make sure you following legal and banking codes to set up, and that you are careful to screen transactions.