Merchant Account Comparison - A Simple Way To Compare Credit Card Processing Accounts

Being able to take credit cards is very important to any company wanting to actively sell anything on the web. Back in the early days of the Internet it was thought that relying on credit cards was not ideal, because it was forcing a dirt-world system to the Internet. Lots of businesses trialled micro payment systems eg "flooz", but they didn't achieve critical mass. Here we are, ten years on from the commercial birth of the Internet, still typing in credit card numbers to buy online and therefore accepting credit cards as payment for things 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 them to process credit cards in their own business name, or the business can sign up with a third party payment service, who actually processed the credit card orders for the merchant. Obtaining a full merchant account has higher upfront costs, but has smaller per transaction costs. Using a third-party payment service costs less initially, but has higher per sale charges.

Deciding whether or not to go for a full credit card processing account or use a third party processor is simply a question of working out which would cost more money. Consider these different business types and compare merchant account benefits...

Usually, merchants who are already trading locally and want to expand online will be more suited to getting a merchant card processing account. Most likely, Usually they will already have an offline credit card processing account and will tailor that account to add the ability to do "MOTO", which is "Mail Order Telephone Order" processing and only means that the card holder isn't there at the time of purchase.

For micro businesses starting starting to sell on the Internet, it's strongly suggested that they begin by testing their sales using a third-party service provider. The advantage is that there's hardly any upfront cost so they can test their business model cheaply and easily. If sales boom, they can consider decrease the per-transaction costs by getting their own merchant card processing account. If the market isn't profitable, they can at least leave the marketplace without having expended much capital to get their own credit card processing account.