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Accepting payments online without a merchant account
By Abe Cherian
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Accepting payments online without a merchant account
Copyright ? 2005
Do you really need a merchant account?
Deciding when to get your own merchant account for internet
sales can be a confusing and expensive venture. If you have
a small to medium sized business and only sell a small
amount of products then having your own merchant account may
not be the answer for you.
Middle Persons And Binding Contracts.
You might not know it, but, in the initial stage of setting
up a merchant service, your direct contact is a middle
person or a sales agent working for an ISO (Independent
Sales Office). In most cases sales agents work on a full
commission basis and their commissions are either a straight
fee based on a lease amount they lock you in, or a
percentage of sales that you generate or in some cases,
both.
Even though equipment lease is a non-issue for e-commerce
since transactions are processed in real-time by a gateway
company, most merchants find themselves in a binding lease
for a minimum of 3 to 5 years.
Expensive Fees And Minimum Commitment.
Once you are approved by the merchant bank (after a business
and personal credit check), you are required to maintain a
minimum amount of sales per month (or pay a minimum fee) and
in a most cases, limited to making a certain amount in
monthly sales (limited to maximum amount of sales permitted
by the merchant bank).
Some of the costs involved.
Setup fee - Anywhere between $40 - $200 Monthly fees -
Anywhere between $25-$50 for statements and minimum fees.
Per transaction and charges fees - Usually between 2%-7 % in
fees and .30-$1 per transaction. Gateway fees - $10-$30 per
month (most gateway companies are charging a per transaction
basis now) SSL certificate - Can be as much as $250 Shopping
cart fee or software purchase - Monthly can range $20-$70
and software purchase can be as much as $1400.
In addition to the cost is the technical aspect of setting
up your site to use a shopping cart and real-time
processing. Not all gateways, merchant accounts and shopping
carts play well together. You must make sure that each can
work with each other.
Fast And Easy Way To Accept Payments Online.
Now, if you are a larger business or do a lot of sales each
month perhaps your own merchant account is the answer for
you. It can save you money in the long run. But if you are
just starting out with an online business, then a third
party payment service may be the answer for you.
Third party companies handle all the background details, pay
the monthly fees, assume the risks of fraud and charge
backs, and handle all the secure shopping your customers
will expect when shopping online.
There usually isn't a set up charge, gateway fees, SSL
charges and shopping cart set up. Depending on the service
you choose, they can give you simple HTML code to add to
your site or allow you to use "buy buttons" or both. Fees
range anywhere from 5.5% to 13.5%. Some companies charge a
set up fee and a per transaction fee.
Then there is always Paypal. A useful service for new comers
to the online payment arena but it has its drawbacks. With
Paypal:
Your customer must set up an account with them They can
FREEZE your account They can set limits on monthly
transactions Online Payment Solutions:
Clickbank Paypal 2Checkout
I suggest you explore all your options and decide what is
best for you financially and technically. A little research
online can save you money and time in the long run
About the Author
Abe Cherian is the founder of Multiple Stream Media,
http://www.multiplestreammktg.com . If you wish to
discuss about credit realted issues, apply for a
credit card and more visit:
http://www.creditcardsplease.com
Article Source: http://www.simplysearch4it.com/article/25468.html
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