Credit Card Merchant Account Basics

Knowing which credit card merchant account to get can be very confusing. There are thousands and thousands of banks, merchant account providers and third party sales teams that can offer you all kinds of incentives. Billions of dollars are transacted online every year and you want your share. Where do you turn? What do you look for? Read on to find out...

Third party payment processors

The easiest way to accept credit cards online is through a third party payment processor. Companies like Paypal and 2Checkout.com allow you to offer your customers the option of paying by credit card while not having to go through rigorous credit checks or putting down big deposits. Both of these companies include the option of putting a short business name alongside their name of your customers' credit card bill.

Out of the two, Paypal has no up front setup fee while 2Checkout asks for a one-time $49 USD setup fee. Paypal is also cheaper per transaction. 2Checkout works differently than Paypal does when processing orders.

2Checkout is considered to have purchased your product or service and is simply reselling it to your customer at a profit to them. They will handle the initial customer concerns with regards to the transaction but will refer the product or service specific questions back to you.

Paypal on the other hand, simply processes the initial transaction in their name once you've upgraded your account to a Premium or Business account. Your customer doesn't have to register for a Paypal account if you live in certain countries like the US and Canada so it is very simple to use.

Invoicing your customer

Paypal allows invoicing but doesn't allow you to send a money request to someone without requiring your customer to open a Paypal account. On top of that, most new Paypal accounts are subject to a send limit restricting the amount of money you send. Now in most markets that Paypal operates in this send limit is up to $1000 but it is still a limit.

Because 2Checkout is purchasing the product or service from you, they don't have an account creation requirement that they impose on your customer. They have an invoicing function and as long as you have shown to 2Checkout that you process reliable transactions through their system, the process is hassle free for your customers.

Which is right for you?

I use both processors. I tend to process initial transactions through Paypal and regular invoicing through 2Checkout. Either way though, you can't go wrong with either option if you choose to have only one credit card merchant account.

Joe Duchesne is the webmaster for TurboMerchant.com a website dedicated to helping people with their credit card merchant account needs. Reprint freely as long as you keep this resource box intact and provide a keyword rich link back to Turbomerchant.com

More Ecommerce Articles

Building eCommerce Websites That Work - Part 1
You want to succeed at eCommerce? Welcome to a very big family. Right off, let?s be clear - there are lots of ways to do business on the internet.

Internet Merchant Accounts For Innocents Abroad
If you want to sell on the internet, your need to accept credit cards. To accept credit cards, you need a merchant account, or access to one.

Using Credit Cards Securely Online
Nowadays, shopping online is a very common thing. Making your purchases without leaving your house is an attractive option for many of us.

The Ecommerce Business Plan
Simply put, business plans can make or break your business. Starting a Drop Ship business online is no different from starting a traditional non-online business.

Creating The Perfect Ecommerce Website
If you?re thinking of jumping on the bandwagon and going into business with your own ecommerce website, you?d do well to look at a few examples before you start. Finding out what a good ecommerce website looks like will help you know what to include - and what to avoid - when you start to set up one of your own.

Why Arent People Buying From Your Ecommerce Website?
Your stock is tempting, your prices right - your ecommerce website is good to go, but somehow the customers just aren?t buying. So where are you going wrong?Make sure people can find your ecommerce website.

Select a Niche Market for Ecommerce
Choosing a carefully pinpointed niche market should be one of the first steps that an internet business owner has to take. A very common way of describing a niche market is ?a targeted group of individuals with very specific and similar needs or interests.

Online Credit Card Processing - How to Accept Credit Cards - Ecommerce 101
Back in 1998 (through 2000 or so), I worked for a small company (called PaymentNet / then Signio) that handled online transactions. Verisign later purchased this company, and the product team I led integrated the "client" - the portion that took the credit card information and sent it to our servers for processing.

Using Drop Shipping for E-commerce
Thanks to the ubiquity of the internet, online virtual businesses have become very popular business opportunities. Online retail stores are gradually playing a more important role in our lives than the traditional ?brick-and-mortar? retail shops.

5 Tips for Online Shopping
Shopping online has become more and more popular in America as we are all looking to save a little time and money. E-commerce sales are growing at astronomical numbers ranging from 20-25% per year.