How To Receive Payment Online

October 4, 2008 by User Image

Hi, if you're new here, you may want to subscribe to my RSS feed. That way you will not miss any update. Thanks for visiting!

Are you a newbie online Entrepreneur having no clue how to get payments for your online business activities? If you are getting confused with terms such as Merchant Account, Payment Gateway, Third Party Payment Processor and wondering what that has to do with collection of payment for goods and services you render, this post is meant to help you. For well established online entrepreneur, you may find some useful tips in addition to what you already know.

I often receive emails from my readers (especially those from Nigeria) asking for help on how to open a PayPal account or a US bank account. Reading through some of the requests, it is obvious that those asking for help do not even fully understand what their needs are and as such often ask for solution that does not fit their need. So, I will start with a little explanation on what an online entrepreneur requires to collect payment online and then make suggestions on how even a Nigerian Entrepreneur can collect payment online.

Collecting Payment Online
Once you offer products or service for sale online, it is important that you have in place an easy way that your would be customer can pay you for such product or service. However, the system of receiving payment online will largely depend on the kind of customers you deal with and the kind of product/service you offer. Let’s look at some practical examples.

My web hosting company NAIRAHOST is owned by a Nigerian and I pay for their services with local currency (Nigerian Naira), by using the banking facility provided in Nigeria. It is smooth and convenient for me. However, their customers outside Nigeria pay with dollars using Credit Cards or PayPal.
Of recent, I bought a Toshiba Laptop from BestBuy. The payment was made using a US bank issued Credit Card (this was done on my behalf by a friend).
Last week, I paid for a heavy industrial equipment worth several thousands of dollars. Even though the company is online, payment was made via secure Bank Telex Transfer because the amount involved was huge.

From this simple examples, you can see that one payment option may not fit all situations. The nature of your business activities plays a major role in determining what Payment Option your customer will consider suitable. So the first question to ask is; How do my customers want to pay? While there are several payment options such as:

Paper Cheque - A paper cheque is written and mailed to you. Not the most convenient or timely option.
Wire Transfer (Bank Telex Transfer) - Most suitable for huge amount of money. e.g local bank to a foreign correspondent bank.
Credit Cards - Most suitable for any amount of money. eg. MasterCard, VisaCard
E-Payments - Highly convenient for small amount of money. eg. E-Gold

I only listed the various options, but time will only permit us to look at just one. So, I will focus on the most common option, being credit card payment.

Credit Card Payments
Statistics have it that 90% of all online sales get settled through credit cards. So if the customers want to pay with their credit cards, you must put in place a facility for accepting credit card. It is a fact that for you to do business with consumers in the developed countries, your online business must be able to accept credit cards as a form of payment. To accept Credit Card payments, you will need to obtain either a personal merchant account or use the service of a third party processor.

What is a merchant account?
This is a special account provided by a bank or financial institution that enables an entrepreneur accept customer Credit Cards and other electronic payments via an e-commerce website. Simply put, it is a special kind of bank account. The process of getting a merchant account can be simple or rigorous depending on the kind of business activity the entrepreneur is carrying out online.

Third Party Credit Card Processors
If your business is small and your monthly turnover is less than five thousand, you may not need to bother about getting a personal merchant account. You can actually start collecting payment online by using the service of a third party Credit Card Processor. When the business turnover grows, you can then obtain your own merchant account. Let look at examples of affordable Third Party Credit Card Processors you can use.

PayPal
This is the most famous of them all. PayPal is a simple and affordable payment solution for new online entrepreneurs. It safes you the high cost and stress often associated with getting a merchant account. Also, PayPal offers different solutions to Online Entrepreneurs. We will take a look at three of them.

PayPal Website Payments Standard: Your customers are afforded the option of payment with Credit Cards or Paypal. The transaction is processed on PayPal secure server.
PayPal Website Payments Pro: Almost the same with above, but the customer does not leave your website at any time. It is quite similar to having your own merchant account.
PayPal Email Payments: This is the most common one. You simply open an account with PayPal and request your customers to pay you using your PayPal account details. This is sufficient for small online businesses who receives payments that are less than a thousand dollars per transaction. However, it is advisable and financially wise to upgrade to either of the two options mentioned earlier as soon as possible.

Advantages of using PayPal: PayPal is about the most popular payment options available online today. It is easy to open an account and the processing of transactions is quite fast. Also, a great number of consumers from the developed nations use PayPal.

Disadvantages of using PayPal: PayPal is not available to entrepreneurs residing in some countries, for example Nigerian Entrepreneurs residing in Nigeria are not allowed to open a PayPal account from Nigeria. Beside this, many former users of PayPal claim that your account can get frozen for a number of reasons and you stand to loose whatever amount of money you have in the account. This can be scary for an entrepreneur. Before choosing PayPal it is advisable that you read reviews on websites such as www.PayPalSucks.com

Note: I am neither promoting nor discrediting PayPal. I use it but cautiously. Also note that the account I use was NOT opened from Nigeria (don’t fall prey to scammers who promise to open PayPal for you in Nigeria. A quick trip to PayPal.com will show you that Nigerians are not accepted for now. If you use a dubious way to open as a Nigerian Entrepreneur who is residing in Nigeria, you stand a higher risk of getting your account frozen).

AlertPay
AlertPay is an online payment service similar to PayPal. It provides individuals and businesses the ability to send and receive payments online without exposing their personal or financial information. The service is being provided by a Canadian privately owned and managed company founded in 2004. It is a rapidly growing leader in online payments. AlertPay offers several options:

AlertPay Personal Accounts

Personal Pro Account: If you want to sell something online and you need to get paid in a hurry the Personal Pro Account is the way to go. It gives you the flexibility to send and receive payments and do business using your name. You can open a free account in less than 5minutes by clicking here.
Personal Starter Account: If you are skeptical or not sure of where to start, use this option. The Personal Starter account is the ideal account to shop online safely without exposing your financial or personal information. It affords you the opportunity to get cash from your friends and family or send payments online for FREE.

Advantages of opening an AlertPay Personal Account:
1. No cost to send or receive payments
2. Accept numerous payments options.
3. Access to AlertPay Business Tools
4. Free for shoppers
5. Shop online without exposing your financial details.
6. Highly Secure.

AlertPay Business Account
If you own a business and you operate it using a unique business name different from your personal name, then an AlertPay Business account will be a good choice. It is tailored to meet all the needs of your online business. You will have access to numerous online business tools that will help your business grow online.
Advantages of opening an AlertPay Business Account:
• Conduct business under your company name
• Low transaction fees per transaction
• Accept Credit Card payments
• Sub accounts: Manage multiple online businesses with one account
• Website Payments: Buy Now Buttons, Subscriptions and Recurring Payments
• Business Tools: Integrate AlertPay into 3rd party applications
• Mass Pay: Send out payments to groups of people

Naturally, I love AlertPay because they allow online entrepreneurs from all over the world to open an account, Nigerians inclusive.
Note: I maintain an account with AlertPay and participate in their referral program.

There are other third party payment processors like 2Checkout.com, moneybooker.com, ikobo.com etc. But time and space will not permit that I talk about them now. Maybe I will discuss some of them in future post. Wishing you success in your online ventures. See you at the top. Cheers.

Rate this:

3.6 (2 people)

Share and Enjoy:

No Related Post

Tags:

Comments

18 Comments on How To Receive Payment Online

Bola Oluyemi on Tue, 7th Oct 2008 3:50 pm

Great post,this post tell it all as it is.Alertpay any day.Check payment is also good if you don’t have any other source of getting out your payment.

How have you been?You’ve not been very much around, hope no problem.

Bola Oluyemis last blog post..Can love impel humans to show outstanding courage?

naijagal on Tue, 7th Oct 2008 6:28 pm

how do you pay by egold or 2checkout in naija?can you pay for hosting that way?

NaijaEcash on Fri, 10th Oct 2008 8:03 am

@Bola
There is no problem. I’ve been having some good challenges offline. Increase in responsibility in my place of work. I am enjoying it anyway. Thanks for checking on my. You make me feel cared for. Shalom.

@naijagal
I think http://www.NairaHost.com accepts e-gold. I will check it out and revert back to you. Thanks for visiting.

naijacampusforum on Tue, 14th Oct 2008 6:57 pm

Thankyou for your post.it an eye opening article.Paypal is the best online payment proccessor but they are not accepting Nigerians.I have heard of this Alertpay and their credibilty.Maybe,I will jion them soon.moneybookers are the most wicked,they accuse Nigeria of terrorism-I hates them.Weldone Man.

naijacampusforums last blog post..Greenwhitesoft Is Now Live!

Ayo on Thu, 16th Oct 2008 4:42 pm

I got info about alertpay.some guys wanted to dupe me.they wanted to open paypal for me for 50,000.after i heard it’s no longer open for nigeria.everyone should beware.i will register with alertpay.thanks that was a nice post.

seun on Wed, 22nd Oct 2008 5:28 pm

Hello Ayo I saw ur msg.I want u to help me out cos i aslo want to open my alertpay account but i dont know how to help myself out. Thanks

holla on Thu, 23rd Oct 2008 12:42 pm

got ur info about paypal and alert.Hw can I access alert

Emmanuel Ahagbuje on Thu, 23rd Oct 2008 3:39 pm

Thanx 4 dis article.it really was an eye opener 4 me.I
had tried to use Paypal but realised they weren’t accepting nigerians.God bless you for your efforts good job.

admin on Thu, 23rd Oct 2008 5:26 pm

@Seun and holla
Simply click on the Alertpay Banner or link. It will take you to the site. Registration is quite straight forward.

@Emmanuel
Thanks for the compliment. Cheers.

Oyin on Thu, 13th Nov 2008 3:33 pm

i want to secure an online job an before i can do that i need a means in which i could be paid my cash and i guessed the best way for me in Nigeria is to get a secured online credit card and i do not know how to go it for free ofcourse because of fradstars and if i eventually open how do i get my cash. thanks and God bless you

oyindasade on Thu, 13th Nov 2008 3:58 pm

i applyed for a job online and for me to get paid is difficult i am a Nigerian student and i want to get a secured online credit card i do not know how to get it for free because i do not even have money to pay in the first place e-gold accont is tempoarly suspended and i need to know how i wll get my money if i open the account eventually. thanks and God bless you

NaijaEcash on Thu, 13th Nov 2008 4:49 pm

@Oyin
I already sent you an email detailing the steps you should take. Basically, Alertpay will help.

@Oyindasade
Ask the employer if they can pay to ALERTPAY. If they agree to do that, then you can simply open an free ALERTPAY account and start receiving your payment.
You can transfer money from your ALERTPAY account to any domiciliary bank account in Nigeria. Hope this clarifies the issue. Cheers

brandneu on Wed, 19th Nov 2008 4:44 pm

hi,

if alertpay can be opened by nigerians, does this mean that nigerians with dom accounts or mastercaeds can then make payments online?

I amased outside nija and looking at starting an online business in nija, cant afford webpay right now but also want to give my clients alternatives to going to the bankto pay for my products dat would mst likely be stated inusd or naira. pls advice by mailing me thanks

Starting An Online Business | Nigerian Entrepreneur on Thu, 20th Nov 2008 5:37 pm

[...] online. Paypal is the most famous, but there are alternatives. You can get more details on how to receive payment online from my previous post on the topic, click the link How to receive payment [...]

raph on Fri, 5th Dec 2008 2:47 pm

I live in Nigeria and I just opened an Alertpay account. Please tell me the details of how I can transfer money from my ALERTPAY account to my domiciliary bank account in Nigeria. Thanks.

NaijaEcash on Fri, 5th Dec 2008 4:00 pm

@raph
I already answered your question in a comment above.

You can transfer money from your AlertPay account to a domiciliary account here in Nigeria. I guess I will do a post to give details. Thanks for visiting.

How To Withraw Fund From Your AlertPay Account | Nigerian Entrepreneur on Mon, 8th Dec 2008 1:56 pm

[...] wrote about AlertPay sometime ago in a post titled How to receive Payment Online. AlertPay, which is a Canadian Online Payment Processing Company, is a competitor to the widely [...]

Yemi on Sat, 3rd Jan 2009 5:14 pm

Hello, pls i live at Nigeria, i opened an alertpay account sometime last year but i was told to get it verified,before i can start using it.Pls can u tell me the quickest way to get my alertpay account verified? Thanks.

Tell me what you're thinking...
and oh, if you want a pic to show with your comment, go get a gravatar!