Fortune-Magnet News

by:
Bruce Zhang

A Merchant Account is a commercial bank account established by a merchant to receive payment via credit cards. Three parts are required to accept credit cards. Besides a merchant account, you need a local bank checking account to deposit funds and a processing solution, such a terminal or web-based store front to take credit card payments. Online merchant account, or ecommerce merchant account, is a merchant account that can take credit orders on the Web.

Cost of Merchant Account

An online merchant account will boost your online sales, but merchant account incurs various types of cost. A merchant account usually requires a one-time setup fee between $50 - $100. Some merchant account providers waive the setup fee in promotion period or in conjunction with other services. Other costs include gateway fee, statement fee, annual fee, transaction fees and discount rate fees.

Accept Credit Card without Merchant Account

When you first start an online business and have limited resources, the alternative would be to use the services of a credit card processor. You can enjoy the benefits of processing credit card transactions online without the requirements of a merchant account and high costs involved. Paypal, WorldPay, PaySystems and Clickbank are some of popular credit processing services. Popular shopping carts or online storefronts, such as eBay Store, Yahoo! Store and Microsoft bCentral, offer built-in credit card processing capability.

International Merchant Account

International merchant accounts:

http://www.4th-media.net/online_payment/international_merchant_account.php

Or Offshore Merchant Accounts, are merchant accounts that allow the merchants to accept payments from around the world– regardless of where your business or customers are located. Comparing to an online merchant account, two major services that come with an International merchant account are Multiple-Currency Support and International Fraud Protection.

Wireless/Mobile Merchant Account

Mobile merchants used to face unique issues when accepting credit card payments. With the advancement of high-speed wireless networks and mobile technology, mobile businesses are no longer limited in their payment options to just cash or checks.

Many merchant account service providers waive application fee and setup fees to attract more businesses. However, the use of wireless service provider does incur the expense of the terminal hardware, activation fee, monthly service fee, and transaction cost.

About The Author:

Bruce Zhang has over 10 years experience in developing ecommerce and e-business application such as literature fulfillment ( http://www.4th-media.net/order_fulfillment/literature_fulfillment.php ) and supply chain management ( http://www.sysoptima.com/scm/ ) applications.

by:
Joe Duchesne

Knowing which credit card merchant account to get can be very confusing. There are thousands and thousands of banks, merchant account providers and third party sales teams that can offer you all kinds of incentives. Billions of dollars are transacted online every year and you want your share. Where do you turn? What do you look for? Read on to find out…

Third party payment processors

The easiest way to accept credit cards online is through a third party payment processor. Companies like Paypal and 2Checkout.com allow you to offer your customers the option of paying by credit card while not having to go through rigorous credit checks or putting down big deposits. Both of these companies include the option of putting a short business name alongside their name of your customers’ credit card bill.

Out of the two, Paypal has no up front setup fee while 2Checkout asks for a one-time $49 USD setup fee. Paypal is also cheaper per transaction. 2Checkout works differently than Paypal does when processing orders.

2Checkout is considered to have purchased your product or service and is simply reselling it to your customer at a profit to them. They will handle the initial customer concerns with regards to the transaction but will refer the product or service specific questions back to you.

Paypal on the other hand, simply processes the initial transaction in their name once you’ve upgraded your account to a Premium or Business account. Your customer doesn’t have to register for a Paypal account if you live in certain countries like the US and Canada so it is very simple to use.

Invoicing your customer

Paypal allows invoicing but doesn’t allow you to send a money request to someone without requiring your customer to open a Paypal account. On top of that, most new Paypal accounts are subject to a send limit restricting the amount of money you send. Now in most markets that Paypal operates in this send limit is up to $1000 but it is still a limit.

Because 2Checkout is purchasing the product or service from you, they don’t have an account creation requirement that they impose on your customer. They have an invoicing function and as long as you have shown to 2Checkout that you process reliable transactions through their system, the process is hassle free for your customers.

Which is right for you?

I use both processors. I tend to process initial transactions through Paypal and regular invoicing through 2Checkout. Either way though, you can’t go wrong with either option if you choose to have only one credit card merchant account.

About The Author:

Joe Duchesne is the webmaster for TurboMerchant.com a website dedicated to helping people with their credit card merchant account needs. Reprint freely as long as you keep this resource box intact and provide a keyword rich link back to Turbomerchant.com

by:
William Hamilton

The process of learning how to accept payments on the Internet is similar to the course of figuring out how to launch a business. What at first seems puzzling and intimidating may be viewed as straightforward and easy to understand if one has the right guide or manual. The following serves as a brief primer for any business owner who needs to set up a system to accept credit cards online, and includes a necessary glimpse of the associated fees.

The savvy business owner who plans to accept payments on the Web must form an alliance with a payment processing company. There are a multitude of firms to choose from, and one should exercise due diligence in the selection process to avoid those that are overpriced and/or do not engage in fair-minded business practices.

Among the throngs of payment processing providers, there are two distinct entities: ones that provide merchant accounts and others that proclaim themselves as “no merchant account” providers. The latter group accepts payments on the owner’s behalf and offers a rather easy set-up. Payments are taken on their site (not the owner’s), and owed funds are forwarded to the owner two or three times a month.

Merchant account providers (which include financial institutions and independent sales organizations) assert that they give a more professional look to an owner’s website since they enable the owner to receive payments on his/her own site. Moreover, they point out that cash flow is less of a problem since entitled funds are transmitted from customer to owner in several days, in contrast to their counterparts’ record of periodic monthly payments.

Regarding the all-important issue of price, it is difficult to make any absolute determination about which group offers the overall best rates. For instance, while no merchant account providers waive many of the monthly fees, they typically charge a higher percentage of the ticket price. (All credit card providers charge a percentage of the ticket price, called the discount fee. Most add an additional charge on top of that — a flat rate — called a transaction fee.) As a rule of thumb, if an owner anticipates a “moderate” amount of transactions online, he/she may be better utilizing the services of a merchant account provider.

The caveat when choosing a merchant account provider is for the owner to be aware of all fees — not just the discount and transaction rates. Because the terminology used may be different from company to company, the owner must know the quoted total start-up cost (e.g., set-up fee, application fee, etc.), and total monthly fee (e.g., statement fee, customer service fee, etc.) Among fees that are not commonly disclosed –but any astute owner should ask about — includes the following:

AVS fee. The fee to determine if the customer’s billing address provided by the customer matches the one listed on the credit card.

The non-qualified rate. The amount that the discount and transaction rate will be bumped (higher) to if certain Visa/Mastercard requirements are not met. For example, if there is no AVS match, the owner will likely be hit with a non-qualified rate. Shouldn’t the owner be aware that this transpires and the fee that results?

Batch fee. This is a small daily fee charged to batch or close out transactions.

Chargeback fee. This cost is administered when someone disputes a credit card charge. It is important to note that an owner may be asked to establish a “reserve account” at the processor’s bank to handle any future chargebacks, especially if an owner’s credit is not very good or he/she is receiving a large volume of transactions.

Monthly minimum. The minimum amount that the owner must reach in his/her processing costs. Here is an example to determine this number. Suppose, for example, an owner had only one sale of $100 for the month. If the discount and transaction rates were respectively 2 percent and .30, the owner would pay .02 x 100 = $2.00 + .30 = $2.30. If the monthly minimum is $25, the owner still owes $25 - $2.30 or $22.70.

After all the fees are provided (preferably without an owner’s prompting), the owner should use good, old-fashioned number crunching, logic and intuition, and determine who should have the privilege of helping him/her receive payments from customers. The owner is halfway to completing the mission of becoming an Internet tycoon or at least being able to receive a sale.

There are four steps left — the order form, the secure server with certificate, the gateway, and the shopping cart, if desired. The order form, either supplied by the owner, his/her Web designer or the processing company, is simple to design. Once created, it must be on a secure server. When any customer enters his/her credit card information, it is sent in plain, unencrypted text form to the server hosting the Web site. As it is possible to intercept this data, SSL encryption (usually 128-bit) must be employed. Many merchant account providers offer this secure server with official certificate. An owner who is going to use a payment processing provider should not have to spend money on obtaining this.

The gateway component is next. Just as cars use a tunnel to get from one place to another, the gateway serves as that tunnel to transmit information from the customer to the credit card processor. At first, within seconds of the customer submitting his/her credit card information, the processor either authorizes the transaction or declines it. If an authorization code is given, the customer’s account is not charged, but his/her credit limit is reduced. Subsequently, the approved customer’s information becomes “captured” and the authorized amount of money is then charged to the consumer’s credit card. This capture becomes part of the merchant’s batch and travels through the gateway again. The processor then knows to finalize and settle the transaction, and voila, the owner is paid. So the gateway is actually the owner’s gateway towards profit! But the merchant account itself is the engine that makes the car go.

Many merchant account providers offer a shopping cart that integrates with their gateway. Even if the owner already has a shopping cart, chances are good that the gateway can work in concert with it. It is best that an owner look for a merchant account provider that can serve as a “one-stop-shop,” providing its own secure server with certificate, gateway and shopping cart.

After reading this information, a business owner is now armed with knowledge and a greater understanding of how the payment processing/merchant account field operates. This will empower such an owner and help in determining which company to hook on with among the ever-abundant sea of merchant account providers.

About The Author:

Author, William Hamilton, owns a payment processing company, IntelliCollect, and their merchant account services are listed at http://www.intelli-collect.com. His company offers tremendous assistance to new and veteran business owners — individuals who need to understand all facets of a merchant account program.

by:
Tim Knox

Q: I’m opening a gift shop and want to be able to accept credit cards. I talked to the branch manager at my bank, but he didn’t seem to know much about how it all worked. He did say that I would need something called “a merchant account” and something else called “a credit card processor.” Beyond that he seemed as clueless as I am. I’m thinking about going to another bank. Can you explain how that all works? — Mary Ann G.

A: Maryann, I’m going to give your banker the benefit of the doubt and say that a lack of knowledge regarding the specifics of credit card processing is not necessarily a reflection of the banker’s competence. I have found over the years that most bankers, no matter how experienced or knowledgeable about the banking business they my be, don’t really know much about how credit card processing and acceptance really works. That’s because the task of accepting and verifying credit card purchases is handled by third party service companies who process and deposit (or settle) the funds into a bank merchant account.

The decision to accept credit cards is a wise one for any retailer. I agree with financial guru Dave Ramsey’s teachings regarding the use and abuse of credit cards. Many people dig deep holes with credit cards that are hard to climb out of. But, from a practical business point of view, any retail business that does not accept credit cards is leaving money on the table. Research has shown that accepting credit cards increases revenue and helps with cash flow since you receive the money within a couple of days instead of waiting up to a week for a check to clear.

Credit cards don’t bounce, as some checks have a tendency to do. Credit card users are also more likely to buy on impulse and spend more when they do. Bad news for them, but good news for you. If you have a social conscience concerning the use of consumer credit cards, a retail operation probably isn’t the business for you.

To accept credit cards at a brick and mortar location you typically need four things. The requirements may vary a little, but the following applies in most cases. You will need: (1) A way to enter the customer’s credit card information into a verification and processing system. This can be done with a swipe terminal, point of sale system, or by calling the credit card in by phone; (2) A credit card gateway company to verify the credit card’s validity and process the payments; (3) A credit card merchant account in which the gateway company will deposit payments made to you; and (4) A business bank account into which the settled funds will ultimately be deposited for your use.

Here’s how the process works. (1) You make a sale and the customer pays by credit card. (2) Using a card swipe machine or telephone, you contact what is known as a “gateway company” who takes the card information you submit and verifies that the card is valid and the charge can be made against the card account. The gateway company returns an approval code for the purchase.

With a swipe machine or point of sale terminal the verification process happens in a matter of seconds. If you’re doing telephone verification it can take a couple of minutes. You call the gateway company, give them the credit card number and expiration date and they give you an approval code that you write on the credit card charge slip. Either way, the money is typically deposited in your merchant account within 24 to 48 hours (less fees, of course).

You’ll also need to apply for merchant status with each credit card company whose card you want to accept. To do business with American Express and Discover all you have to do is fill out an application, but to accept Visa and MasterCard you must have a merchant account. A merchant account is a special bank account set up for the expressed purpose of accepting credit card payments processed by the gateway company. Merchant accounts are usually associated with banks, though you can also use credit card merchant account service companies to perform the same function if you can not get approved for a bank merchant account.

Applying for a merchant account at a bank is much the same as applying for a loan. The only difference is sometimes a loan is easier to get. There is the prerequisite paperwork to complete and pledging of the first born, followed by an approval process that can take up to several weeks. And you are not guaranteed that the bank will approve your merchant account, even if you have been a favored customer for many years. Banks have strict regulations regarding the granting of merchant accounts and if issuing you a merchant account in anyway puts the bank at risk of losing money, you will be turned down. Banks always make decisions based on economics, not relationships (no matter what your banker tells you).

Requirements for qualifying for a merchant account varies among banks, but in general the bank will look at the following criteria:

How long have you been in business? Business longevity suggests a history of stability, efficient management, and good financial health.

What is your product or service? Does your product lend itself to a high rate of returns and chargebacks? A chargeback is a disputed credit card charge that is refunded to the buyer and charged against your account. You are accessed a chargeback fee that can be as much as $20 per event. If your business lends itself to high chargebacks, you will not get the merchant account.

How’s your credit report? Banks always look at how much you owe and how you pay your bills, so it’s important to have good financial and trade references. If you have a history of late payments or defaults to vendors, it will count against you.

What is your anticipated volume of sales and average transaction amount? The more money you make, the more money the bank makes. If you anticipate just a few credit card charges per week it may not be enough to justify the merchant account in the bank’s eyes.

Is your business categorized as a “high risk merchant?” High risk merchants are those with the highest instances of credit card fraud and chargebacks. High risk merchants include many types of internet-based businesses, telemarketers, travel and cruise businesses, and membership clubs. Being a high risk merchant dramatically decreases your chances of getting a merchant account with a bank.

Being a high risk merchant doesn’t mean that you can’t get a merchant account from somewhere else. Thanks to the growth of ecommerce in recent years there are a number of alternative companies that will provide you with a merchant account, sometimes with more perks than a traditional account, but almost always with higher fees.

Also, not all banks support internet merchant accounts. If yours does not, shop around for one that does.

About The Author:

Small Business Q&A is written by veteran entrepreneur and syndicated columnist, Tim Knox. Tim’s latest books include “Small Business Success Secrets” and “The 30 Day Blueprint For Success!” Related Links: http://www.smallbusinessqa.com http://www.dropshipwholesale.net

by:
J. Stephen Pope

To increase sales on your website, you must accept credit cards. To process credit cards, you could apply for a merchant account through your bank or other financial institution.

Sometimes, though, you would be further ahead to use the services of a credit card processor. This is especially true when you are first starting out and have more limited resources. In this way, you may process credit card transactions without the high front-end costs and requirements of a merchant account.

Here, then, are just a few ways of accepting credit cards without a merchant account. I personally use all of these vendors and can recommend them wholeheartedly.

1. Clickbank

If your product is downloadable (such as electronic books or software), you might consider ClickBank.com . For a $49.95 initial fee, you can process credit cards and on-line cheques for $1.00 per transaction plus 7.5% of sales.

You receive additional exposure through free listing on their website and through the search facilities of other websites, such as CBMall.com.

As an added bonus, you have your own built-in affiliate program. You decide what commission (from 1% to 75%) you would like to pay your affiliates.

2. PayPal

PayPal.com has no initial fees. For just 2.9% of sales and $ .30 per transaction (and sometimes less), you can receive money from anyone.

Also, you can pay others by credit card or checking account without supplying your personal credit information to the payee.

PayPal can be used to collect money from your auctions, website sales, or even from friends or clients.

3. PaySystems

PaySystems.com can handle either intangible (downloadable) or tangible (shippable) products. For an initial fee of $49.00, you can accept all major credit cards as well as online checks. Fees are just 3.95% of sales and $1.00 per transaction. Alternatively, you may pay 5.5% of sales and $ .35 per transaction.

For this, you receive shopping cart, integration with third-party affiliate programs (such as ClixGalore.com ), fraud screening, multi-currency transactions, toll-free support, marketing tools, and more.

For more information on how to accept credit cards without a merchant account, visit:
http://www.yenommarketinginc.com/creditcards.html

About The Author:

J. Stephen Pope, President of Pope Consulting Inc., http://www.popeconsultinginc.com/ has been helping clients to earn maximum business profits for over twenty-five years.

For valuable Work at Home Small Business Ideas, visit http://www.yenommarketinginc.com/

by:
J. Stephen Pope

ClickBank.com can offer you multiple solutions for your e-commerce business. Here are some of the advantages of using ClickBank.

1. Accept Credit Cards Without a Merchant Account

If your product is downloadable (such as electronic books or software), ClickBank may be an excellent solution for you. For a $49.95 initial fee, you can process credit cards and on-line cheques for $1.00 per transaction plus 7.5% of sales.

2. Start Your Own Affiliate Program

With ClickBank, you have your own built-in affiliate program. You decide what commission (from 1% to 75%) you would like to pay your affiliates.

To learn more about ClickBank.com, visit:

http://www.yenommarketinginc.com/buy/clickbank.html

3. Receive Free Advertising

You receive additional exposure through free listing on the ClickBank website and through the search facilities of other websites, such as CBMall.com.

To learn more about CBMall.com, visit:

http://www.yenommarketinginc.com/buy/cbmall.html

4. Obtain Referral Commissions

Even without applying for ClickBank credit card processing, you can earn referral commissions on thousands of ClickBank Marketplace products.

To learn more about ClickBank Marketplace, visit:

http://www.yenommarketinginc.com/buy/clickbank-marketplace.html

5. Eliminate Sales Tax Problems

Are you registered for Value Added Tax (VAT) for online transactions for European Union (EU) countries since July 1, 2003?

Are you collecting the appropriate state or provincial sales taxes?

If you are a Canadian, are you aware of your obligation to collect Goods and Services Tax (G.S.T.) and Harmonized Sales Tax (H.S.T.) on Internet transactions?

Again, ClickBank may be your solution. ClickBank is registered for EU purposes and adds the appropriate VAT to each transaction.

As well, to deal with ClickBank, you must agree to sell your product to them. ClickBank then resells your product to their customers. Thus, ClickBank becomes the retailer responsible for collecting sales taxes — not you. Obviously, ClickBank will not be subject to sales taxes in most jurisdictions.

Since ClickBank is located in the United States and can only sell or use the products it sells from there, it would appear that Canadian G.S.T. and H.S.T. would not be applicable to them.

Of course, this is not legal advice. To determine your liability for sales and similar taxes, consult your lawyer and accountant.

To read more about sales taxes on Internet transactions, visit:

http://www.yenommarketinginc.com/e-commerce-tax.html

Considering its many advantages, ClickBank may well be your e-commerce solution!

About The Author:

J. Stephen Pope, President of Pope Consulting Inc., http://www.popeconsultinginc.com/ has been helping clients to earn maximum business profits for over twenty-five years.

For valuable Work at Home Small Business Ideas, visit http://www.yenommarketinginc.com/

by:
Michael Zittel

3 Points of Choosing A Provider

Point 1:

Do you need a merchant account? If you are a new business, with limited funds and you anticipate processing less than $1000 a month in credit card payments, we do not recommend a formal merchant account. The associated monthly minimums and bank statements of accepting credit cards may not be cost effective. You might want to consider a 3rd party processor such as PayPal, 2checkout and others as they have a Pay As You Sell model. There are risks involved with 3rd party processor such as lack of charge back protection and legitimacy. However, shoe-string business’s may find the saving out weigh the risks and lack of legitimacy.

Point 2:

If you are an established business, or a new business anticipating more than $1000 in credit card payments a month, then begin by comparison shopping online. Do not settle for what your local bank offers. All major processing banks use independent sales offices and agents called ISO’s and ISA’s, who often have web sites offering their merchant services. You can find an extensive non biased list of retail and e-commerce providers at Merchant Service Directory.

http://www.121merchantaccount.com/Directory/index.html

Many of the listed ISO’s will have agents in your area and will be available to meet you in person. By comparison shopping online you may discover your bank is charging much higher fees than you need to pay. This is a very common occurrence with local banks and can be avoided with a few minutes spent on line.

When comparison shopping, look at the discount rate, per transaction fees, bank statements, monthly minimums, length of contract, and cancellation fees.

A) Discount Rate and Per Transaction Fees.

The discount rate and per transaction fees are usually the most important items to consider. The discount rate is the percentage of each sale the processing bank will keep. The standard rate for a “swiped” merchant account is around 1.59%. This means for every $100 you accept in credit card payments, the processing bank will keep $1.59. A “non swiped” rate is usually around 2.29%. Both require a per transaction fee of some sort. Per transaction fees are an additional fee per transaction ranging between $.10 and $.99. A common pitfall of merchants is thinking lower discount rates and higher transaction fees are more cost effect. This may be, but you have to do the math to be sure. If you average small sales less than $20 a ticket, you will be better served by negotiating a contract with a higher discount rate and lower per transaction fee.

Here are 3 examples to consider.

1.49%, $.30 a transaction x 100 transactions of $20 each = $59.80

1.59%, $.20 a transaction X 100 transactions of $20 each = $51.80

1.69%, $.10 a transaction X 100 transactions of $20 each= $43.80

You see, the 3rd rate is better for high volume low ticket price merchants. The opposite is true for low volume, high ticket merchants.

1.49%, $.30 a transaction x 10 transactions of $200 each = $32.80

1.59%, $.20 a transaction x 10 transactions of $200 each = $33.80

1.69%, $.10 a transaction x 10 transactions of $200 each = $34.80

As you comparison shop please use our Merchant Account Rate Calculator to help you.

http://www.121merchantaccount.com/tutorial/calculator.htm

B) Bank Statements.

The bank statement is a paper print out of your monthly activity. This should be between $10-$15.

C) Monthly Minimums

To assure a sufficient amount of revenue to cover the costs of providing good customer service, most ISO’s require a monthly minimum of transactions totals. This is usually around $25. This means you must process at least $25 worth of associated fees. Generally speaking, if you process over $1k in transactions you will meet the monthly minimum and this becomes a non-issue. However, there are some ISO’s who will waive this fee. This may seem like a bargain, but consider this. If an ISO is willing to lower their standard just to get a low level client, then it’s likely they will have numerous low level clients. Low level clients tend to consume more customer service resources. This burdens an ISO with less profitability and fewer customer service representatives to assist you when you need them. Good customer service is as important as fair rates. What you save in the up front costs of rock bottom rates, you will pay for in the back side when you need good customer service. And, you will need good customer service at some point.

D) Length of Contract and Cancellation fees.

Most banks require a 3 year contract. The longer the term of the contract, the better the rates should be. If you are going to commit to a long term contract, then use it to your advantage. Demand better rates. In junction with the length of contract most banks have a Cancellation Fee. This fee is usually the sum of the remaining months times the monthly minimum. A monthly minimum of $25 x 12 remaining months = $300.

There are some banks that do not have 3 year contracts, though they charge application fees, set up fees, programming fees, over “cap” fees, and a whole handful of other fees that can total more than the cancellation fees.

E) Other fees

Other fees include mid and non-qualified rates, batch fees, charge back fees, AVS fees, gateway fees, terminal programming fees, customer service fees, annual membership fees and more. To make a thorough comparison, we recommend that you create a spreadsheet with all associated fees. To download a free example visit this link:

http://www.121merchantaccount.com/tutorial/Rate-Spreadsheet.xls

Point 3:

Now, that we’ve discussed the fees you should consider the last and final point of choosing the right merchant account. ALL, and we do mean ALL, processing banks are subject to rates set by Visa, Mastercard, American Express, Discover and others. These rates are called the “Interchange Rate”. Essentially interchange is the “buy” price for all banks, ISO’s and ISA’s. Anything over this rate is what the ISO and ISA makes. It is not fair to expect an ISO or ISA to make nothing on the service they provide for you. However, it is not fair for the ISO or ISA to overcharge you either. What this point tells you is EVERYTHING IS NEGOTIABLE. If an ISO or ISA will not negotiate, move on. Another ISO or ISA will. Just make sure whomever you process through is an FDIC insured bank.

About The Author:Michael Zittel

http://www.121merchantaccount.com

by: Jakob Jelling

The great majority of business conducted online is processed with a credit card. Also, credit card sales tend to be four times larger than a sale completed any other way. Knowing that most people decide to use a credit card and spend more when doing so, it only makes sense to be able to accept credit card payments.

The first step to being able to accept credit card payments is getting a merchant account. A merchant account is a special type of bank account that is able to receive payments from credit card purchases. Along with your account you will also need a hardware or software solution to actually process the payments, but this doesn’t have to be supplied by the company providing your merchant account.

For online credit card processing there is one extra step, you also need a payment gateway. A payment gateway is a company that provides real time authorization of online transactions. When looking at gateways make sure that they are compatible with your site’s software and your financial institution. You may wish to research your gateway and financial institution options before signing up for any services.

When researching your merchant account providers you may be surprised at the number of options available to you. While there are a lot of options, selecting the best provider for you is easy to do by knowing a little about what each company offers and how much they charge for their services.

The first step should always be to seek a mentor. Do you know someone who currently is conducting a similar business? If so ask them who provides their merchant account and what their thoughts are on that provider as well as others that they may have tried. After asking around search the Internet for people’s opinions on merchant accounts. While opinions are not a good reason to base a decision, their accounting of the service they received and the ease of company to work with are valuable information to know.

After determining which companies will be the easiest to work with you can begin to narrow down your options by examining the services offered and history. A good merchant account provider should have extensive experience working with growing businesses. This experience will allow your merchant account provider to be able to set up your account faster, will ensure that they can expand their services as your company grows and requires more options and most importantly, has the experience required to actively combat fraud and charge backs.

by: Jakob Jelling

To conduct business on the Internet, whether informal, one-time only transactions between two friends, or a full-fledged business selling products or services, payment arrangements have to be made. Before 1998, this often meant either checks sent through snail-mail, or very expensive, and often hard-to-obtain, merchant accounts for online credit card processing. In 1998, PayPal was introduced to fill the payment processing gap.

PayPal now has about 50 million members, but was originally introduced to provide a payment processing service for online auction buyers and sellers, in particular, eBay. Since then, PayPal has grown into the premier third-party payment processing service. In fact, PayPal was so successful that eBay bought the company in 2002, replacing their own Billpoint service with the far superior PayPal service.

PayPal is free to join, although buyers are no longer required to join in order to pay for goods and services from seller members. Many people are still afraid to do business online, and won’t provide their credit card information. Scams certainly abound in cyberspace, but PayPal is a solid, reputable company, and there is little to fear.

For sellers, PayPal offers much lower processing fees than many other third-party processors. PayPal rates are not much higher than those of merchant account processors, and there are no ongoing fees. You only pay PayPal fees when you make a sale. It is also much easier and faster to set up a PayPal account than a merchant account. Some sellers complain of unjustly frozen PayPal accounts, and as with most any service, there are plenty of horror stories surrounding other PayPal actions. However, many more buyers and sellers have used PayPal from the beginning with no problem at all.

PayPal offers transfer of funds to and from a PayPal account through e-checks, debit and credit cards, and instant transfer from other members’ accounts. They offer debit cards to allow you to make purchases against your account balance, just as you would with a bank debit card, a money-market interest rate on the balances in some accounts, seller and buyer protection services, invoicing, recurring billing, shopping cart, and many other tools that online merchants may need.

About The Author:

Jakob Jelling

http://www.sitetube.com