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Collecting event registration fees with online credit card
transactions.
What you need to
do an consider
Once you decide that you want to allow your event
participants to pay online with their credit cards, you need
to decide if you will apply for your own merchant and
gateway company accounts or find an online registration
provider that will process transactions on your behalf using
their accounts.
Both routes have pros and cons and you will have to look at
your individual situation to determine the best option.
Using an online registration provider�s accounts can get you
ready to process transactions in less than a day and will
allow you to avoid all of the set up and monthly fees from
the credit card and gateway companies.
On the other hand, if you are processing a significant
volume of high dollar transactions throughout most of the
year, you may want to consider opening your own merchant
account.
Before deciding, run some numbers and consider these points.
Please feel free to
contact us if
you have any questions or
comments about this article.
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The event participant fills out the online from, enters
his/her credit card details and clicks submit.
The credit card details are sent to the gateway company
for processing.
The gateway company sends the transaction details to the
credit card company that issued the card.
The credit card company approves or declines the
transactions and reports back to the gateway company.
The gateway company passes this information back to the
online registration system and the event participant. If
the transaction is approved the event participant will see
a webpage confirming the transaction and will receive a
receipt via email. If it is declined the event participant
can try again.
The online registration system is updated with the
information from the gateway company.
Funds are transferred to a merchant account and the then
to the designated bank account.
What is the cost of application fees with the credit card
companies and gateway company?
What is the cost of monthly fees with the credit card and
gateway companies?
What kind of discount rate do you qualify for with the
credit card companies?
How much will your online registration company charge to
process transactions using their merchant account versus
using your own account?
How much does it cost to have your online registration
company work with the gateway company you choose?
How long will it take to get set up with your own
accounts?
How often do you need to process online transactions?
Consider the monthly costs of having your merchant and
gateway accounts while not using them.
Do you have qualified staff with time to handle the
accounting related to your own merchant accounts?
Online credit card transactions are becoming much more
common as consumers grow comfortable making online
purchases. This change in thinking puts pressure on event
planners to allow event participants to pay registration
fees online using their credit cards. In the end, both event
planners and participants win in terms of convenience,
accuracy and security.In this article we will define several common
credit card
processing terms you need to know, outline a simplified
sequence of events that takes place to process a transaction
and highlight several points for you to consider before
getting started with online credit card processing.Common Terms
Merchant Account
An account set up with a credit card company to allow you to
process credit cards. Funds from the merchant account are
automatically transferred to a regular bank account.Online Merchant Account
Same as above, but this account has been approved for online
transactions. To get this type of account the credit card
companies will want to see that you have proper software and
security in place.Discount Rate
This is a percentage that the credit card company keeps in
exchange for processing a transaction. If your transaction
is for $100, and your discount rate is 3% you would pay
three dollars to the credit card company and end up with
$97. The discount rate charged depends on your volume of
transactions, your processing history, the type of goods or
service you are selling etc. Online merchant accounts often
have a higher discount rates than standard merchant
accounts.Real Time Processing
This is an online purchase where the credit card is verified
and processed within a few seconds of submitting the order.
The person making the purchase will see an approved or a
declined screen and receive a receipt via email.Manual Processing
This is where credit card information is collected but not
immediately processed. If this is the case, transactions are
processed manually at a later date using a merchant account
not set up for online transactions.Gateway Company
Gateway companies facilitate the transactions between a
website and the credit card company and handle the transfer
of funds into your merchant account.Sequence of events
Here is a simplified sequence of events that take place to
process an online real time credit card transaction for an
event registration.
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