Comparing Merchant Accounts – A Quick Way To Compare Credit Card Processing Accounts
October 27th, 2008 at 01:28pm Under General
Taking credit card orders is vital to any business that wants to actively sell their own products on the Net. At the dawn of online business it was understood that accepting plastic was not a good idea, because it applying a dirt-world system to the digital world. Lots of businesses launched online payment currencies such as “flooz”, but the web-based currencies didn’t flourish. And so, 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 so accepting credit cards when trying to sell goods online is still vital.
There are basically two ways to accept credit cards online. Let’s compare merchant accounts. Businesses can either go for a full merchant account, which allows them to process credit cards directly, or they can sign up with a third party payment service, who actually processed the credit card orders for the business selling the products. Getting a merchant account costs more initially, but has lower per item fees. Using the services of a third party service provider costs less initially, but has more expensive per sale costs.
The decision as to whether or not to get a full credit card processing account or use a third party service provider is simply a question of working out which would cost more money. Let’s look at two different business types and compare merchant account benefits…
In the main, established businesses who are already trading locally and simply want to expand online will be more suited to obtaining a merchant card processing account. Most likely, It’s most likely that they will already have an offline credit card processing account and will tailor that account to add the ability to do “MOTO”, which is “Mail Order Telephone Order” credit card orders and simply means that the card holder is not there at the time of purchase.
For one-person businesses starting out online selling new software or a new ebook, it’s important that they consider testing their sales using a third party payment service. The advantage to the new business is that there’s hardly any upfront cost which means they can test their business model quickly and easily. If the market is profitable, they can eventually look to reducing the per-item fees by applying for their own merchant card processing account. If sales are poor, they can quickly exit the marketplace without having expended much capital to get their own credit card processing account.
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