So you want to accept credit card payments online

credit card payments for online merchants

Do you want to start collecting credit card payments online but don’t really know where to start.  There are so many options out there for you and to be honest it is impossible to say a particular company is best because there are so many factors you have to decide on when choosing a payment provider.

There are two main ways for any online business or website to start taking credit card payments.

1. Let someone accept credit card payments on your behalf (called 3rd Party Processor), or

2. Set your self up with an Internet Merchant Account (IMA) and a Payment Gateway.

So which one is best for you?  If you are small and are just starting out then it is probably best to get a 3rd Party Processor account as they are a lot cheaper to set up and you can start taking payments straight away.  Most 3rd Party Processors actually charge you zip, nada, nothing to set up an account.  Most of the time they charge you a fee for receiving credit card payments (anywhere from 2-10%) which comes straight out of the payment you recieve.  So if you sell a product for $120 then you might see $112 come through.  In this case, the 3rd Party Processor charged you $8 for accepting the credit card payment for you.

If you expect to do high volumes then a IMA plus a gateway could be the best option for you.  An Internet Merchant Account is usually, but not always, set up by a bank.  It is similar to a normal merchant account such as one a business might have to receive efpos payment (POS) from a retail store but instead of being for physical purchases it is specifically for purchases online.  A merchant account can cost up to $1000 but you should definitly shop around as many local banks will try and take you for a ride and get as much as they can from you.

In addition to the merchant account, which is where the money you recieve goes, you need a payment gateway to ensure the processing of the purchases credit card.  If you do set up a merchant account with your local bank, ensure that you don’t simply accept the gateway they provide you as most of the time there are much better and cheaper alternatives out there.  Payment Gateways will usually charge you a per transaction fee although I have seen some recently which offer a fixed monthly fee which is can be a much better option if you do 1000s of transactions each much.

Which ever method you choose, be sure to shop around.  You can use the Payment Guru calculator if you are savvy as we check a huge number of providers for you to ensure you get the best deal possible.  It will save you hours if not days working out which option is best for you.

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