Taking credit card orders is vital to any website that wants to successfully sell goods and services on the web. When businesses started selling online 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 digital world. Lots of businesses trialled alternative payment methods eg “flooz”, but they didn’t achieve critical mass. And so, approximately 10 years on from the commercial birth of the Internet, still using credit card to make online purchases and therefore accepting credit cards when selling goods online is still vital.

There are basically two ways to accept credit cards online. Let’s compare merchant accounts. A business can either sign up for a merchant account, which allows the business to process credit cards via a bank gateway, or the business can sign up with a third party solution, who actually processed the credit card orders for the merchant. Getting a merchant account has higher upfront costs, but has smaller per sale charges. Using the services of a third party service provider costs less upfront, but has more expensive per transaction fees.

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

In the main, merchants who are actively trading offline and want to start selling on the Internet will be suited to getting a merchant card processing account. Most likely, Usually they will already have an offline credit card processing account and will expand the remit of that account to add the ability to do “MOTO”, which is “Mail Order Telephone Order” credit card orders and only means that the cardholder is not present at the point of sale.

For micro businesses starting to sell products online, it’s important that they consider testing their marketing using a third-party service provider. The advantage to the new business is that there’s very little upfront cost so they can test their business model cheaply and easily. If sales boom, they can eventually look to reducing the per-item fees by getting their own merchant card processing account. If the market isn’t profitable, they can quickly leave the marketplace without having expended much capital to get their own merchant account.

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