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Credit Cards, Online payment, E-commerce - Canadian small businesses need to know how to collect money online

By Paul Lima |

E-commerce. It's more than a buzzword. Increasingly, it's how business is conducted--with the click of a button.

To process credit cards online, companies require merchant accounts, have to make hefty bank security deposits and need to set up secure e-commerce enabled Web sites--a complex and costly endeavour.

There are alternatives. Third party e-commerce companies reduce Web site development costs and eliminate the need for merchant accounts and security deposits. But businesses must still pay set up and/or per transaction fees.

InternetSecure Inc. ( offers secure, real-time credit card processing. From one Canadian merchant in 1996, the company has added merchants in over 84 countries around the world selling goods and services to consumers and businesses in over 175 countries.

InternetSecure assumes responsibility for transactional security and can also reject transactions in real-time based on duplicate entries, keying errors and mischievous or potentially fraudulent activity.

Consumers receive order confirmation online--usually in 10 to 15 seconds and InternetSecure notifies merchants of approved orders so they can ship goods. The merchant never sees the customer's credit card number.

InternetSecure also issues authorization codes to consumers buying electronic products (such as software or music files) so they can download products from a merchant's Web site immediately after credit card processing.

PSiGate ( also provides secure e-commerce solutions, including credit card processing, merchant accounts and fraud screening. The company's transaction services include automated tax and shipping calculations and financial account reporting.

PSiGate can help companies acquire merchant accounts and process electronic transactions--even if they do not have a merchant account. As with InternetSecure, the merchant never sees customer credit card numbers.

Businesses pay set-up fees, monthly administration fees and per transaction fees for third party credit card processing, so the solutions are not ideal for low-margin or low-volume sales.

"The problem with the third party payment processing industry ...  is that there aren't enough players as of yet. Once businesses realize the opportunities that e-commerce can bring, then you'll see more third party processing companies," says Aaron Wolski, president, Martek Business Solutions Inc. (, a Markham, Ontario-based Web site and CD-ROM developer.

If it seems overwhelming, businesses can turn to a company like BIS Inc. ( Based in Hamilton, Ontario, BIS Inc. creates and hosts Internet stores--complete with shopping baskets, order forms and product databases with tax, shipping and handling charge calculations.

Stores can be integrated with secure credit card transaction processing services from companies like InternetSecure and PSiGate, says Ted Buck, BIS president.


There are a number of other third-party credit card payment processing companies. And there are alternatives for consumers who do not want to use credit cards online.

PayPal (, an Internet-based payment network, allows merchants to accept credit card payment and allows consumers and businesses to transfer money online from bank accounts or PayPal accounts.

Payment is instant, so the merchant can ship goods the same day an order is placed. And the merchant does not get to see the customer's credit card or bank account number.

HyperWallet ( is another alternative to credit card processing. The Canadian company, based in Vancouver, B.C., allows consumers to spend cash from their own bank account on the Internet. They support payments in both Canadian and U.S. dollars.

To use HyperWallet, subscribers have to open an e-wallet account and transfer money into the e-wallet from a bank account. Once consumers have their Wallet IDs and cash in their e-wallets, they can spend funds at online stores or send money to anyone with an e-mail address.

HyperWallet uses a bank reconciliation system, which guarantees that merchant funds are fully available. Fraudulent transactions are cancelled before the merchant ships goods or incurs other costs.

As with any new venture, businesses have to weigh the costs and benefits of e-commerce, but online transaction options make it possible for more small and medium enterprises (SMEs) to reach a global market in cyberspace.

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