Reason

So you want to go into business on the Web, or you’re an established company who wants to sell products and services on the internet. While searching around your favorite web sites, you come across a plethora of adverts which grab your attention. “Take Credit Cards Now”, is states, “0% Commission!”.

Fighting your way through the large number of e-commerce hype can be difficult, but we want to make it simple for you. You need a merchant account? You want to sell on-line? Let us help you find some answers to those nagging questions.

Accepting Credit Cards?

Your customers are all using credit cards to make purchases on the Web already, so don’t ignore what consumers already have and are using!

Retailers refusing to enter the e-commerce arena are probably digging themselves an early grave. You know you want to make money using the Internet, especially if you already have an existing site promoting your business. Take it a step further, and actually sell your products online.

You’re worried about the cost? It’s significantly cheaper than opening a new shop!

What is a Merchant Account?

A Merchant Account involves a special type of arrangement with a bank or clearing house that allows you to accept credit card payments into a special bank account (your “Merchant Account”). The results of any credit card transactions passed through your online authorization company are then, hopefully, credited to your account if the transaction is approved.  In any business, to be able to accept credit cards, you need a merchant account.  The only difference is that this one is online and not at the store.  The technical term ofr brick and mortar is P.O.S or Point of Sale.

Why do I need a Merchant Account?

Having a Merchant Account is the most efficient, quickest and effective way of accepting payment online by using a credit card. It’s not the only option. Basically, put simply, once you have a merchant account (and a company who will authorize the payments online), you will be able to accept credit card numbers on your site, and then receive any payments due to you. It’s as simple as that.

How Do Merchant Accounts Work?

Receiving payment from your customers credit card  involves several phases. The first being, the approving the sale and taking the customer’s credit card details on your Web site. Next, the card must be verified and approved, to check that it’s not been stolen, or has expired as there are bad orders that come in. Reducing the amount of chargebacks is always good and builds credibility as a stable online business.  Sometimes your Merchant Account company may provide this service, or you may choose to use a third party company to handle this for you.  usually it is software based and is installed on the account of your computer that houses your website. It’s wise not being too cheap with companies who provide authorization services, since accepting invalid credit card transactions could cost you dearly.

Once the card has passed rigorous security checks, your merchant account provider then passes the details to their credit card processor (gateway) who debit the customer’s credit card and deposit the money into your merchant account. This chain of events takes between 1 and 2 days with most merchant account providers, although the features that your chosen provider offers may turn out to be different.

Another Method

While some Merchant Account Providers offer an ‘all-in-one’ solution where they, supposedly, handle your merchant account and the processing of the credit card orders, you may prefer to let separate companies handle each section. For example, you may let one company provide the online authorization service, and get a merchant account yourself with your chosen bank.  Sometiems dealing with banks are a little different as with an online company specializing in this.  Both are secure as they must meet strict standards in order to BE in operations.

If one company handles the accepting of credit cards, fraud and debiting and depositing to your bank account, usually this  means a larger commission is taken out of your transactions, whereas the latter method may just cost you a larger startup fee.  This second method splits it into 2 services; one being the software that connects to the merchant account and the actual moving of money (usually by the bank from which the merchant account is from).