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

Taking credit card orders is vital to any website wanting to successfully sell anything online. At the dawn of online business it was thought that accepting plastic was not a good idea, because it was forcing a dirt-world technology to the Web. Various companies launched “micro payment” currencies for example “beenz”, but the web-based currencies didn’t flourish. The truth is, roughly a decade on from the people starting to sell on the web, still typing in credit card numbers to buy online and therefore accepting credit cards as payment for products online is still vital.

There are basically two different ways to accept credit cards online. Let’s compare merchant accounts. A business can either apply for their own merchant account, which allows them to process credit cards in their own business name, or the business can elect to use the services of a third party payment service, who actually processed the credit card orders for the company. Getting a merchant account has higher upfront costs, but has lower per transaction charges. Using the services of a third party processor 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 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 most cases, established businesses who are actively trading offline and simply want to start selling on the Internet will most likely be more suited to getting a credit card processing account. Most likely, Usually they will already have a real world merchant account and will expand the remit of that account to also 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 one-person businesses starting starting to sell on the Internet, it’s strongly suggested that they begin by testing their marketing using a third party payment service. The advantage is that there’s next to no initial cost which means they can test their business model easily and cheaply. If sales boom, they can consider decrease the per-transaction costs by applying for their own merchant card processing account. If the market isn’t profitable, they can at least exit the market without having paid significant upfront costs to get a merchant account.