The two main ways to accept credit card payments online are:
- A merchant account
- A third-party merchant or aggregator account
A merchant account is set up via a bank or ISO, and is essentially an account controlled by the business, which enables it to process credit card payments. A third-party merchant takes credit card payments on behalf of the business, usually in exchange for certain fees or a percentage of the profits.
Choosing a Merchant Account or a Third-Party
Merchant accounts are subject to requirements that vary between countries and between banks and between ISO (Independent Sales Organization). Many banks charge a set-up fee in order to open the account, but their individual transaction fees will likely be lower than a third-party merchant's. Choosing an option will be dependent on the business's needs, predicted growth, and ability to sell enough products to cover all fees and associated costs. Due to the variation between companies, it would be best to get multiple quotes from different banks/ISO’s and different third-party merchants that offer website credit card processing.
Setting Up a Merchant Account
A web developer can help a business set up the credit card processing system on the business's website, but it isn't always necessary. Both merchant accounts and third-party merchants have customer service representatives and instructions to allow the site owner to set up the processing system on the site. With a lot of third-party merchants this is as simple as copying the embed code from the third-party site and placing it into the HTML of the business's website. More complex website credit card processing systems may require more time or expert help, but the result is a professional, streamlined way for customers to pay for their purchases online.
Things to Keep in Mind
All small businesses should be able to make informed decisions on what website credit card processing system works best for them. Keep in mind the following:
- Fees, including start-up fees and the cost of each transaction
- Length of time for approval when applying for a merchant account
- Length of time for setup on the site, especially in more complex systems
- Quick, efficient, and knowledgeable customer support for the business
- Length of contract and terms of cancellation
- Security and fraud protection
- Ease of use for both the business and customers
- Ability to generate reports
- Virtual terminals, shopping carts, and complete integration with e-commerce
With online credit card processing, businesses are able to increase their sales and not only attract more customers, but keep them as regular shoppers. Setting up a credit card processing system may take research in the beginning, but it provides additional benefits in sales and customer service, as well as reaching an international market.