The great majority of business conducted online is processed with a credit card. Also, credit card sales tend to be four times larger than a sale completed any other way. Knowing that most people decide to use a credit card and spend more when doing so, it only makes sense to be able to accept credit card payments.
The first step to being able to accept credit card payments is getting a merchant account. A merchant account is a special type of bank account that is able to receive payments from credit card purchases. Along with your account you will also need a hardware or software solution to actually process the payments, but this doesn't have to be supplied by the company providing your merchant account.
For online credit card processing there is one extra step, you also need a payment gateway. A payment gateway is a company that provides real time authorization of online transactions. When looking at gateways make sure that they are compatible with your site's software and your financial institution. You may wish to research your gateway and financial institution options before signing up for any services.
When researching your merchant account providers you may be surprised at the number of options available to you. While there are a lot of options, selecting the best provider for you is easy to do by knowing a little about what each company offers and how much they charge for their services.
The first step should always be to seek a mentor. Do you know someone who currently is conducting a similar business? If so ask them who provides their merchant account and what their thoughts are on that provider as well as others that they may have tried. After asking around search the Internet for people's opinions on merchant accounts. While opinions are not a good reason to base a decision, their accounting of the service they received and the ease of company to work with are valuable information to know.
After determining which companies will be the easiest to work with you can begin to narrow down your options by examining the services offered and history. A good merchant account provider should have extensive experience working with growing businesses. This experience will allow your merchant account provider to be able to set up your account faster, will ensure that they can expand their services as your company grows and requires more options and most importantly, has the experience required to actively combat fraud and charge backs.
Of course nothing is free, and your merchant account is no exception. The amount that you must pay will vary from company to company but the basics of your bill should be the same. If the company you are considering is charging more you may wish to seek another merchant account provider.
Choosing An Internet Merchant Account
Surf to Google and perform a search on Internet Merchant Account . The results are staggering (472,000 results!) If you have created a web based business and need to accept credit card payments, your choices are limitless. Before you partner with a provider, take time to understand the different components of internet credit card processing, and know what to look for in a merchant provider.
How It Works
Accepting credit card payments through your web site actually requires multiple components. Between a paying customer and your bank account, three layers exist:
Payment Gateway - Thi ..
The biggest single cost is the set up costs. Your set up costs include your application fees, equipment costs and deposits. These fees tend to average about $275 but vary depending upon the options you have selected. For example, your start up costs will be much higher if you have decided to purchase your credit card processing equipment instead of leasing it. This may be an economically viable solution after adding up the amount of the deposit that will be required if you lease the equipment and the leasing fees for a year.
Another thing to keep in mind is the amount that your merchant account provider will be charging for each completed transaction. On average you will be charged 2.5% of the sale and there may be a few more annual fees. Be sure to very closely examine that amount you will be paying and what additional fees you may have to pay as each company will be different and the difference may save you a lot of money each year.
Starting and having a business grow is a very exciting time for any business owner. As you expand into new markets, such as online sales, you will find a plethora of new options and opportunities. After deciding to expand be sure to carefully consider your options in order to make your next step as smooth and cost effective as possible.
ABOUT THE AUTHOR
Merchant Account BasicsAccording to merchantseek, companies who accept credit card payments for goods and services tend to generate higher revenues than those who only accept cash. According to industry statistics, the average credit card sale is $40 versus just $9 for the average cash sale. If that isn t temptating enough, consider the disadvantage you may face if competitors offer credit card payment options and you do not. These days, the credit card payment option is a must, whether you have a physical retail outlet, take telephone orders or sell products over the Internet. Besides the potential revenue boost, c ..
Jakob Jelling is the founder of http://www.cashbazar.com. Visit his website for the latest on personal finance, debt elimination, budgeting, credit cards and real estate.
