How to open an e-learning merchant account?
Monetizing online content is a bottom line to any e-learning business success. To start receiving payments from selling courses, merchants need to select a payment gateway. In this article, we lay out how to choose the right payment gateway and how to open a merchant account for the e-learning business.
E-learning in 2019
E-learning is a system based on formalized teaching with the help of electronic resources. Nowadays, it offers the ability to share educational materials in all kinds of formats — for example, videos, slideshows, word documents, webinars, and PDFs. According to the Global Market Insights research, the e-learning market is to surpass $300B by 2025. The time is ripe for both large and small businesses. Check up the examples of the most successful e-learning platforms in 2019:
- LinkedIn Learning;
What is a payment gateway and why do you need one to sell courses online
A payment gateway is a software that allows merchants to accept payments from their clients online. To get a payment gateway, one contacts a PSP and applies for a merchant account. When the application is approved, the businessman gets a payment gateway and starts accepting payments online.
Key points to consider when choosing a payment gateway:
There are some essential points one should take a good note of when choosing a payment gateway for e-commerce business:
1. The wide range of payment methods.
Bear in mind the acceptance policy when researching potential payment gateways. The more payment methods PSP has, the more likely you are to succeed. To choose your perfect payment package, answer the next questions:
- What countries are you targeting?
- Would you like to accept payments by e-wallets or just credit cards?
- What additional payment methods besides Visa and MasterCards are you willing to add?
2. Fee structure.
From 1.2% to 4.4% per transaction, all the PSPs have a different fee structure. Take a look at this precise comparison of popular PSPs’ fees to see what fits your business needs best.
- PayPal. A fee of 2.9% + $0.30 for the U.S. online payments and a fee of 4.4% + a fixed fee based on the currency for the international online payments.
- Ikajo International. Fees starting at 1.2%
- Stripe. A fee of 2.9% + $0.30 for the U.S. online payments and a fee of 1% +2.9% + a fixed fee based on currency for the international online payments.
- Braintree. A fee of 1,9% + $0.30.
- Authorize.net. A fee of 2.9%+$0.30.
As you can see from the data above, Ikajo International offers the most affordable services, whereas PayPal is the most expensive solution. See the article on the top 5 payment providers comparison to learn more.
3. Affordable recurring billing.
Recurring billing is a so-called subscription billing model. Offering one is a must for those who opt to sell e-learning. Once the cardholder agrees on price and conditions, the payment will be charged monthly without a second agreement. At Ikajo, we offer a free recurring billing, whereas an average price ranges from $15 to $90 per month.
The North America eLearning market accounted for around 40% of the industry share and is snowballing due to fast-technological adoption. That means you don’t want to miss the U.S. clients. The most popular payment methods in the U.S. are Visa, MasterCard, Discover, American Express.
What is a merchant account and why do you need one to sell e-learning
Merchant account (M.A.) is a functional account that enables the client’s business to obtain different kinds of payments such as credit/ debit cards as well as electronic payments. See the article on What is the difference between a payment gateway, payment processor, and a merchant account. Once you apply for a merchant account and your application is being approved, you start selling courses online.
List of documents needed to open an e-learning merchant account:
- Certificate of Incorporation;
- Local documents as per company jurisdiction which displays company directors and owners;
- Utility bill/Bank statement/Rental agreement under corporate names proving company location;
- Valid ID copies for all company directors and owners.
All in all, payment processing for the e-learning business is not as hard as it seems. Find the right payment gateway and apply for a merchant account. Once you collect all the documents, nothing prevents you from business success.