Comparing Merchant Accounts - A Quick Guide To Compare Merchant Accounts

Being able to take credit cards is massively important to any business wanting to successfully sell goods and services on the Internet. At the dawn of online business it was accepted that using credit cards for Internet purchases was not a good idea, because it applying a dirt-world system to the digital world. Startup companies tried to offer virtual currencies eg "beenz", but the web-based currencies didn't flourish. Therefore, approximately 10 years on from the launch of businesses online, still getting our plastic out of our wallets to buy on the web and therefore accepting credit cards when selling products online is still hugely important.

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 in their own business name, or the business can sign up with a third party service provider, who actually processed the credit card orders for the merchant. Getting a merchant account costs more initially, but has smaller per item fees. Using a third-party service provider costs less initially, but has more expensive per transaction costs.

Deciding whether or not to go for a full merchant card processing account or use a third party solution is just a question of doing the math. Consider these different business types and compare merchant account benefits...

In the main, merchants who are already trading locally and simply want to expand online will most likely be suited to obtaining a merchant account. Most likely, Usually they will already have a real world merchant account and will tailor that account to also do "MOTO", which is "Mail Order Telephone Order" processing and simply means that the credit card holder is not there at the time of purchase.

For one-person businesses starting to sell products online, it's strongly suggested that they begin by testing their sales using a third party processor. The advantage to the new business is that there's hardly any upfront cost so they can test their market easily and cheaply. If sales boom, they can eventually look to decrease the per-transaction fees by getting their own merchant account. If the market isn't profitable, they can at least leave the market without having paid significant upfront costs to get a merchant card processing account.