BlogSpot.PK|The General Purpose Blog

Taking credit card orders is massively important to any company wanting to actively sell their own products on the Internet. Back in the early days of the Internet it was accepted that relying on credit cards was not a good idea, because it was forcing a dirt-world system to the digital world. Lots of businesses launched online payment currencies for example “flooz”, but none of the e-currencies took off. Therefore, ten years on from the commercial birth of the Internet, still using credit card to make online purchases and therefore accepting credit cards when offering things online is still hugely important.

Basically, there are two different ways to accept credit cards online. Let’s compare merchant accounts. Businesses can either sign up for a merchant account, which allows the business to process credit cards via a bank gateway, or they can elect to use the services of a third party service provider, who does the actual credit card processing for the company. Obtaining a full merchant account costs more initially, but has lower per item fees. Using the services of a third party payment service costs less initially, but has higher per sale fees.

Making the decision as to whether or not to go for a full merchant account or use a third party processor is simply a question of doing the math. Let’s look at two different business types and compare merchant account benefits…

Usually, established businesses who are already trading locally and want to expand online will most likely be suited to getting a merchant account. Most likely, Usually they will already have an offline merchant card processing account and will expand the remit of that account to also do “MOTO”, which is “Mail Order Telephone Order” processing and simply means that the cardholder is not there at the time of purchase.

For small businesses starting starting to sell on the Internet, it is think about testing their sales using a third party solution. The advantage to the new business is that there’s next to no upfront cost so they can test their business model easily and cheaply. If sales boom, they can eventually look to reducing the per-item fees by applying for their own credit 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 merchant card processing account.

Accepting credit cards online is vital to any company that wants to successfully sell anything on the web. When businesses started selling online it was understood that accepting plastic was not ideal, because it was trying to apply an offline solution to the Web. Various companies tried to offer micro payment systems such as “beenz”, but the web-based currencies didn’t flourish. The truth is, approximately 10 years on from the commercial birth of the Internet, still using credit card to make online purchases and therefore accepting credit cards when trying to sell goods online is still as important as ever.

Basically, there are two ways to accept credit cards online. Let’s compare merchant accounts. Businesses can either go for a full merchant account, which allows the business to process credit cards directly, or they can sign up with a third party solution, who does the actual credit card processing for the company. Getting a merchant account has higher upfront costs, but has smaller per sale charges. Using the services of a third party payment service costs less upfront, but has higher per item costs.

Making the decision as to whether or not to get a full merchant account or use a third party solution is simply a question of running the numbers. Let’s look at two different business types and compare merchant account benefits…

In most cases, established businesses who are already trading locally and simply want to expand online will most likely be more suited to getting a merchant card processing account. Most likely, It’s most likely that they will already have a real world merchant 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 credit card holder is not there at the time of purchase.

For micro businesses starting out online selling new software or a new ebook, it is important that they consider testing their sales using a third party processor. The advantage to the new business is that there’s hardly any initial cost which means they can test their business model quickly and easily. If the market is profitable, they can consider reducing the per-item fees by obtaining their own merchant card processing account. If sales are poor, they can at least exit the marketplace without having paid significant upfront costs to get a credit card processing account.