Merchant Accounts
If you want your online business to be capable of accepting credit card payments, you must have some type of merchant account. A merchant account allows you to take credit cards as forms of payment in a safe and secure manner.
You apply for a merchant account by filling out an application and signing a fee agreement. Unfortunately, navigating the merchant account maze can be difficult if you do not have financial experience. There are many different companies out there, and they all have a deal to offer. But before you sign up for anything, read the fine print.
The three main fees you need to look for are the set-up fees, the percentage you will pay for each transaction, and the monthly fees. All of these fees need to be taken into consideration. One company may advertise low set up fees, but they may take a higher percentage of the sale or the monthly fees may be considerably higher.
There are two types of merchant accounts, your own personal merchant account or a third party merchant account. A bank will open your own account and although they may have higher initial opening costs, these accounts generally have a lower transaction fee (what you pay them for each transaction).
Deciding which of these two types will work best for you is a personal decision, but if your business is established and thriving, the bank-based merchant account will probably work best.
Third Party Merchant Account Providers
There are a large number of providers out there, all offering what is sure to be the best deal ever. Let's evaluate some of the top providers and see what it is they really offer.
2CheckOut (2CO) offers instant acceptance for new merchants and has a $49 setup fee, no monthly fees, and an average transaction fee. The account offers a built-in shopping cart and accepts one-time or recurring payments. They accept both physical and digital goods merchants.
ClickBank offers a one-time setup fee along with a transaction fee of $1.00 plus 7.5% of the sale price. There is no monthly fee. They will also handle tracking and paying your affiliates automatically. They only accept merchants selling digital goods.
PayPal has no setup fee and a sliding transaction fee, all of them very low, based upon sales volume. They accept both physical and digital goods merchants and have various methods for you to tightly integrate their interface with your site. Subscriptions and one-time payments can be processed.
This is just a general overview of some of your payment options. Before you decide, do some in depth research and find the account that will work best with your company's needs.
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