Comparing Merchant Accounts - A Simple Guide To Compare Merchant Card Processing Accounts

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Being able to take credit cards is massively important to any company that wants to actively sell their own products on the web. Back in the early days of the Internet it was accepted that using credit cards for Internet purchases was not ideal, because it was trying to apply a dirt-world solution to the Web. Lots of businesses offered “micro payment” currencies for example “beenz”, but none of the e-currencies took off. And so, roughly a decade on from the launch of businesses online, still getting our plastic out of our wallets to buy on the web and accepting credit cards when trying to sell things online is still as important as ever.

Basically, there are two 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 directly, or they can go with a third party service provider, who processed the credit card charges on behalf of the merchant. Getting a merchant account costs more initially, but has lower per sale charges. Using the services of a third party payment service costs less initially, but has higher per transaction charges.

Making the decision as to whether or not to get a full credit card processing account or use a third party payment service is just a question of running the numbers. Consider these different business types and compare merchant account benefits…

In most cases, merchants who are actively trading offline and simply want to start selling on the Internet will be more suited to getting a credit card processing account. Most likely, It’s most likely that they will already have an offline merchant account and will expand the remit of that account to also do “MOTO”, which is “Mail Order Telephone Order” credit card orders and simply means that the card holder isn’t there at the time of purchase.

For micro businesses starting starting to sell on the Internet, it is think about testing their sales using a third-party solution. The advantage to the new business is that there’s hardly any initial cost which means they can test their market easily and cheaply. If sales boom, they can eventually look to decrease the per-transaction fees by getting their own merchant card processing account. If the market isn’t profitable, they can quickly leave the marketplace without having paid significant upfront costs to get their own merchant card processing account.

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