Due to the increase of e-commerce sites over the last ten years, credit card accounts are now very simple to set up on your own site.
The bank views it as a credit line that is extended to you personally. You need to apply for this, as you would a loan.
A good spot to start your search is your own bank Most problem credit cards, and if you have a long-term relationship with the association, that’s a big plus. Attempt a couple of other local banks and even offer to move all your accounts there or set up a company account. You only may be rewarded with retailer status.
You will also likely want a payment gateway account, which is a web-based credit card processor or trade handler that is capable of hooking into credit card accounts belonging to your web merchant account and the online shopper. Verification and transfer requests are handled by the payment gateway.
Credit cards are not processed cheaply, at least not for a startup. Some suppliers also charge startup fees, but shop around– if you ask in many situations the startup fee will be waived.
PayPal has become a world leader in online payment solutions. You’ll find two major PayPal offerings for retailers.
1. Website Payments Standard. This is a straightforward way to begin accepting credit cards online. A simple integration into your shopping cart enables customers to pay securely and easily. (PayPal seamlessly integrates with hundreds of compatible shopping carts or custom built storefronts.) If you don’t have a shopping cart, the free PayPal Shopping Cart can be set up fast and easily too.
You will have the capacity to take all major credit cards, debit cards and bank transfers –which takes just a couple of minutes– after creating the system on your website, just like online bingo sites that accept Paypal Website Payments Standard is safe, and you don’t need another merchant account or gateway. Your customers don’t want a PayPal account. Transaction fees are low.
2. There’s a $30 fee per month but no setup fee. Trade fees are recorded under PayPal Website Payments Pro on the PayPal website.
With this service, customers that pay by card remain on your site for the entire trade; PayPal is not visible. Website Payments Pro is integrated into the shopping carts of many popular websites, or it can be easily added to some custom built shopping cart.
Website Payments Pro comprises a virtual terminal, which lets you process payments for mail, fax and phone orders.
Both retailer and third party accounts (aka gateway accounts) have their benefits and drawbacks. The principal advantages of having a merchant account include:
Protection. The FDIC protects banks and merchant accounts commonly have fraud protection.
Since the transaction is directly between the customer and your merchant account, you keep control. There is no intermediary getting managing the client’s cash.
Typically you’ll receive payments quicker than if you use a third-party payment service.
Price. Entrepreneurs pay for collecting debit and credit and debit cards.
You must handle disputes. If you might have your own merchant account, you’ll result in any conformity, fraud or security problems that could appear, chargebacks and disputes.
Hidden fees. You’ll be able to get hit with them, so read your contract.
The advantages of a merchant account provided by a third party
There is no need to be approved for merchant services by a bank. You can sidestep the acceptance process if you’ve got no credit or low credit ratings.
You have a business on your own side when disputes arise. They could play work and middleman for your business.
PayPal, if you select to use it, is a well-known and trustworthy service for transactions.
Disadvantages of third-party retailers:
Potentially higher fees.
Their name is on the purchase and possibly links to their websites or those of other companies.
Standing. Not all third party merchants are PayPal, and others are known for working mainly with adult sites while many have outstanding reputations. Still others happen to be cited for fraud. You need to pick carefully.