E-Commerce solutions for small business in Canada
Quick links to merchant account alternatives operating with Canadian currency:
Opening an online business in Canada maybe slightly more difficult than in the United States. But Canadians prefer shopping in Canada to avoid broker charges at the border!
Online businesses are geared towards making sales directly to customers through their websites. Most likely, purchases require customers to pay prior to goods or services being delivered. Since mailing payment creates a delay and shipping C.O.D. is an additional expense, online electronic payment is preferred. Although online institutions exist that offer electronic forms of currency, the most commonly accepted solution is credit card processing. Traditionally, you would need to contact your bank and obtain a credit card merchant account. The bank would evaluate your risk, and may ask for a large deposit. Since you plan to conduct business online then you pose a higher risk. Once you have a merchant account, then there are many online merchant gateways to choose from. The whole process is complicated and difficult enough for many small businesses to give up thier dreams.
There is an alternative though…
Institutions exist who are willing to process payments without requiring you to have a merchant account. You can avoid large initial start up costs and monthly overhead that could otherwise hurt your cash flow.
Back to the original statement: opening an online business in Canada maybe slightly more difficult than in the United States BECAUSE most of these economical alternatives for small business are only available in the United States and/or only in U.S. currency. On the bright side, we have found three insitutions that offer services to Canadians in Canadian dollars without requiring you to have a merchant account. Please let us know if you know of others.
Some considerations when evaluating these merchants are:
- What percent do they charge on transactions?
- What is the processing charge per transaction?
- What initial set up and monthly fees are there?
- How easy is the customer experience?
- How good is customer support?
- What customization of payment options do they offer?
PayPals popularity comes from close association with eBay online auctions, being the preferred method of payment. PayPal offers low rates, no setup charge, no monthly charges and is therefore the most economical option. However, in recent years there have been many dissatisfied merchants who have experienced their accounts being frozen for six months due to PayPal considering their content inappropriate. PayPal was initially trying to prevent illegal activity, but later went further making themselves moral judge of what was appropriate. If you search, you will find merchants who have shared thier experiences online. The result was many merchants sought alternatives to PayPal.
Another concern about PayPal is their requirement for customers to establish an account with PayPal prior to making purchases. These extra steps can confuse customers and ultimately lead to lost sales. If you can accept PayPals quirks, then they are by far the most economical choice for a small online business.
Click to learn more about PayPal
Many PayPal clients chose to switch to 2CheckOut. The fees are higher on transactions, and there is an initial set up fee. Some of the payment options are more restrictive than PayPal, such as not accepting variable amounts; all prices must be entered as products. Also, re-occurring payments do not allow a trial period. Hopefully, by the time you read this 2CheckOut will have expanded thier service offering.
Despite the higher fees, 2CheckOut is still a very economical choice compared to other options out there. However, the big advantage of 2CheckOut versus PayPal is the simplicity of the customer not requiring an account. The customer experience is simple, requiring only the payment information and optionally shipping information. Some merchants who offer both PayPal and 2CheckOut say that more customers pay via 2CheckOut.
Click to learn more about 2CheckOut
For more serious merchants, we recommend checking out WorldPay. Their rates are better than 2CheckOut when you have larger volume. Their system is much more flexible with more control, which avoids having to be creative with your website programming. The set up charge is larger and there is a monthly fee, but you may easily justify the price difference due to the lower rate charged on transactions. One very attractive feature for merchants who require re-occurring payments on subscriptions is the ability to change the amount charged without the customer having to sign up again.
Click to learn more about WorldPay
GoCom Canada Inc is here to help
We hope these links help you get started. If you need further help creating an e-commerce solution, please contact GoCom Canada Inc sales department.