Being able to take credit cards is vital to any website that wants to actively sell anything on the Net. At the dawn of online business it was understood that relying on credit cards was not ideal, because it was forcing an offline technology to the digital world. New companies offered “micro payment” currencies eg “beenz”, but the web-based currencies didn’t flourish. Therefore, roughly a decade on from the commercial birth of the Internet, still typing in credit card numbers to buy online and therefore accepting credit cards when selling things online is still hugely important.

There are basically two different 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 they can sign up with a third party payment service, who actually processed the credit card orders on behalf of the business selling the products. Obtaining a full merchant account costs more initially, but has lower per sale fees. Using the services of a third party service provider costs less initially, but has more expensive per item charges.

The decision as to whether or not to go for a full merchant account or use a third party payment service is just a question of working out which would cost more money. Consider these different business types and compare merchant account benefits…

In the main, established businesses who are actively trading offline and want to start selling on the Internet will most likely 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 also do “MOTO”, which is “Mail Order Telephone Order” credit card orders and simply means that the cardholder isn’t present at the point of sale.

For one-person businesses starting to sell products online, it is important that they consider testing their marketing using a third party solution. The advantage to the new business is that there’s hardly any initial cost which means they can test their market easily and cheaply. If sales boom, they can think about reducing the per-sale fees by getting their own credit card processing account. If sales are poor, they can quickly leave the market without having spent a lot of cash to get a merchant card processing account.