Comparing Merchant Accounts - A Quick Guide To Compare Credit Card Processing Accounts | Natural SEO

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Comparing Merchant Accounts - A Quick Guide To Compare Credit Card Processing Accounts

Tuesday, September 23rd, 2008 Subscribe To Our Feed

Taking credit card orders is massively important to any website that wants to actively sell goods and services on the web. Back in the early days of the Internet it was understood that relying on credit cards was not a good idea, because it was forcing a dirt-world technology to the Internet. Startup companies trialled digital currencies such as “flooz”, but none of the e-currencies took off. The truth is, roughly a decade on from the commercial birth of the Internet, still getting our plastic out of our wallets to buy on the web and therefore accepting credit cards as payment for things online is still as important as ever.

There are basically two ways to accept credit cards online. Let’s compare merchant accounts. Businesses can either sign up for a merchant account, which allows them to process credit cards directly, or they can elect to use the services of a third party service provider, who processed the credit card charges on behalf of the merchant. Obtaining a full merchant account has higher upfront costs, but has smaller per sale charges. Using the services of a third party solution costs less upfront, but has more expensive per sale costs.

Deciding whether or not to go for a full merchant account or use a third party processor is only a question of doing the math. Let’s look at two different business types and compare merchant account benefits…

In the main, merchants who are actively trading offline and simply want to expand online will be suited to getting a credit card processing account. Most likely, Usually they will already have an offline credit card processing account and will expand the remit of that account to also do “MOTO”, which is “Mail Order Telephone Order” processing and simply means that the credit card holder is not there at the time of purchase.

For small businesses starting starting to sell on the Internet, it’s strongly suggested that they begin by testing their sales using a third party payment service. The advantage is that there’s hardly any initial cost so they can test their market quickly and easily. If sales boom, they can think about decrease the per-item costs by getting their own merchant card processing account. If the market isn’t profitable, they can quickly leave the marketplace without having paid significant upfront costs to get their own merchant card processing account.

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