A Quick Way To Compare Merchant Card Processing Accounts

Accepting credit cards online is vital to any website that wants to actively sell products and services on the web. Back in the early days of the Internet it was thought that relying on credit cards was not a good idea, because it was trying to apply a dirt-world technology to the Internet. New companies launched micro payment systems such as “flooz”, but they didn’t achieve critical mass. Here we are, roughly a decade on from the launch of businesses online, still getting our plastic out of our wallets to buy on the web and so accepting credit cards when selling products online is still hugely important.

There are basically two ways to accept credit cards online. Let’s compare merchant accounts. A business can either sign up for a merchant account, which allows them to process credit cards in their own business name, or they can sign up with a third party processor, who processed the credit card charges for the business selling the products. Obtaining a full merchant account costs more initially, but has smaller per item costs. Using a third party processor costs less upfront, but has higher per sale costs.

Making the decision as to whether or not to get a full merchant card processing account or use a third party payment service is simply a question of running the numbers. Consider these different business types and compare merchant account benefits…

Usually, merchants who are already trading locally and simply want to expand online will most likely be more suited to getting a merchant card processing account. Most likely, It’s most likely that they will already have an offline merchant account and will tailor that account to add the ability to do “MOTO”, which is “Mail Order Telephone Order” credit card orders and simply means that the credit card holder isn’t there at the time of purchase.

For one-person businesses starting to sell products online, it’s think about testing their sales using a third party payment service. The advantage is that there’s next to no upfront cost which means they can test their market easily and cheaply. If sales boom, they can eventually look to reducing the per-item fees by obtaining their own merchant card processing account. If the market isn’t profitable, they can at least leave the marketplace without having expended much capital to get their own credit card processing account.