This guide is for New Zealand small and medium-sized businesses looking to sell products or services online. It provides an introduction to credit card payment models and methods.
Disclaimer: Links to external websites are not an endorsement of any one organisation, product or service.
There are two main models for processing credit card payment from an online store, real-time payment and deferred payment.
With real-time payment processing, funds are transferred to your account when the customer confirms their order.
With deferred payment, you process the credit card transaction ‘manually’ (typically via a web-based terminal), once the order has been filled.
To receive payment by credit card, you need to have a merchant account. Typically this can be arranged through your bank.
Factors to consider when setting up a merchant accounts include:
As a guide, merchant account transaction fees for New Zealand banks range from 2.5% to 4.5% per transaction.
The percentage is typically set on a sliding scale, relative to sales volume: the higher the turnover, the lower the percentage charged.
Updated May 2007
Merchant service fees vary from bank-to-bank and can include:
Banks typically require information about your business to process a merchant account application, including: business credit history, product/service description, and market.
Most New Zealand banks enable payment by Visa and Mastercard.
If you’re selling a product with potential for international sales, then you should also identify the credit card(s) likely to be used by your target market. Your bank may then be able to provide an appropriate processing facility.
The following links are to the websites of New Zealand banks and associated organisation that provide merchant accounts.
There are also companies that provide a combined merchant account and payment gateway service (see below), and that are independent of a New Zealand bank.
A payment gateway is a service (provided by a third-party) that authorises credit card payments made from your website to your merchant account.
Indicative payment gateway fees for New Zealand-based service providers:
Updated May 2007
Factors to consider when evaluating payment gateway services include:
New Zealand payment gateway service providers include: