Merchant Account Comparison - A Simple Guide To Compare Credit Card Processing Accounts

Being able to take credit cards is very important to any website that wants to successfully sell goods and services online. Back in the early days of the Internet it was thought that relying on credit cards was not ideal, because it was forcing a dirt-world system to the Internet. Startup companies tried to offer digital currencies for example "beenz", but none of the e-currencies took off. Therefore, 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 accepting credit cards when selling goods online is still vital.

Basically, there are two ways to accept credit cards online. Let's compare merchant accounts. Businesses can either apply for their own merchant account, which allows the business to process credit cards directly, or they can sign up with a third party service provider, who does the actual credit card processing on behalf of the merchant. Getting a merchant account costs more initially, but has lower per item charges. Using a third-party service provider costs less initially, but has more expensive per sale charges.

The decision as to whether or not to go for a full merchant account or use a third party payment service is only a question of crunching the numbers. Let's look at two different business types and compare merchant account benefits...

In most cases, established businesses who are actively trading offline and want to expand online will be suited to obtaining a credit card processing account. Most likely, It's most likely that they will already have a real world merchant card processing account and will expand the remit of that account to add the ability to do "MOTO", which is "Mail Order Telephone Order" credit card orders and only means that the cardholder is not there at the time of purchase.

For micro businesses starting starting to sell on the Internet, it's think about testing their marketing using a third-party payment service. The advantage is that there's hardly any upfront cost which means they can test their business model quickly and easily. If sales boom, they can eventually look to decrease the per-sale costs by getting their own merchant account. If sales are poor, they can quickly leave the market without having expended much capital to get a credit card processing account.