Comparing Merchant Accounts - A Quick Way To Compare Merchant Card Processing Accounts

Taking credit card orders is massively important to any company wanting to actively sell products and services on the Net. Back in the early days of the Internet it was understood that relying on credit cards was a bad idea, because it applying an offline technology to the Web. Various companies launched digital currencies for example "flooz", but none of the e-currencies took off. Therefore, ten years 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 offering products online is still as important as ever.

There are basically two ways to accept credit cards online. Let's compare merchant accounts. Businesses can either apply for their own merchant account, which allows them to process credit cards via a bank gateway, or they can elect to use the services of a third party payment service, who actually processed the credit card orders for the merchant. Obtaining a full merchant account has higher upfront costs, but has lower per transaction charges. Using the services of a third party payment service costs less upfront, but has more expensive per item fees.

Making the decision as to whether or not to go for a full merchant card processing account or use a third party service provider is just a question of running the numbers. Let's look at two different business types and compare merchant account benefits...

Usually, established businesses who are already trading locally and simply want to start selling on the Internet will be more suited to getting a merchant card processing account. Most likely, It's most likely that they will already have a real world merchant card processing account and will tailor that account to add the ability to do "MOTO", which is "Mail Order Telephone Order" processing and only means that the cardholder isn't present at the point of sale.

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