Only few e-commerce initiatives can exist without a means to process payment immediately after purchase. In order to succeed online, 99.99% of the people who read this are going to need to find an online payment processing option that takes traditional credit cards as payment. TIP Anyone who buys online has heard the online horror stories and already comes to you with a built-in hesitance to buy online. If the payment processing element of your e-commerce system was obviously integrated to save money or put in place because you are "not sure yet," this will come through loud and clear to your customer and result in lost sales. Although it is the most popular avenue for most e-commerce efforts, this does not immediately mean a traditional merchant account. There are other options for taking payment online as unique as the Internet, and we'll examine a number of them here. TIP One of the biggest mistakes I ever made online was not doing my homework when I signed up with my initial merchant account provider. When you sign up with someone to handle your financial transactions, do you homework, check references, and always read the fine print. Merchant AccountsThe most popular form of online sales is e-commerce by credit card sales. Merchant accounts are accounts with banking establishments that enable you to take credit cards at your place of business. We list a few options in the following sections. NOTE Most legitimate merchant accounts charge a different percentage rate based on the type of sale you are making. A face to face transaction in a store where you can check signatures, and so on will always be less than an online transaction. Wells FargoWells Fargo provides merchant account services to many U.S. based businesses and has quickly positioned itself as a leader in this industry. Its online toolset is considerable, but the capability to deal with people face to face by walking into a local branch is also powerful. More information can be found at http://wellsfargo.frontpagelink.com. Internet Marketing CenterThe Internet Marketing Center has provided Webmasters with numerous Internet related tools and services for years. It has helped many Webmasters get merchant accounts through their connections online. More information on its recommendations for merchant account services can be found at http://imcmerchantaccounts.frontpagelink.com. PayPalAs mentioned previously, PayPal provides an option for traditional credit card sales, but also allows for users to take credit cards through their Premier and Business Accounts. As a result, many business users utilize their PayPal relationship as a merchant account alternative.
ClickbankClickbank has quickly positioned itself on the Internet as a service that provides Webmasters with the ability to take credit cards (and echecks) at their Web sites without the costs and hassles associated with a traditional merchant account. Clickbank's service is limited only to electronic goods and services, but it provides a solid alternative for people in that market. In addition to this alternative merchant account solution, Clickbank also integrates an automatic affiliate program into its sales process. More information can be found online at http://clickbank.frontpagelink.com. Payment GatewaysA merchant account is merely an account with a bank that enables you to take credit cards. In a brick and mortar store, you connect to your bank to take credit cards through a terminal. Online, this is done through a payment gateway service. The most common of these gateways is Authorize.net. Your merchant account provider will tell you which payment gateways it works with. Payment gateways almost always carry an additional service charge. More information about Authorize.net can be found at http://an.frontpagelink.com. Alternatives to Merchant AccountsMerchant accounts can be costly. Signup and monthly fees can quickly add up in price. In addition, many merchant accounts contracts require term lengths of a year or more. For those wanting to only do a small amount of sales online, there are companies and services that provide alternatives to traditional merchant account contracts and stipulations. TIP If you do more than just a few sales online, the merchant account "alternatives" are seldom cheaper than a traditional merchant account. These companies make their revenue stream from the per-transaction charges, and when they stack up, you seldom benefit. These companies usually charge a single sign-up fee and then a per transaction fee usually higher than a traditional credit card discount fee, but without merchant account requirements. Two options are examined in the following sections, but be aware that there are others. As always, do your homework and run the numbers when investigating these options.
2CheckOut2CheckOut provides a way to take credit cards online without any long term contracts or monthly fees. It also provides a free basic shopping cart program. More information about 2Checkout can be found at http://2checkout.frontpagelink.com. At the time of publication, 2Checkout requires a $49 setup fee and charges 45 cents and 5.5% of transaction per sale. PayPalAs mentioned previously, PayPal provides a way to accept credit cards with no up-front fees at all. Its process is a bit cumbersome, but you can't beat its availability and startup prices. |