Being able to take credit cards is massively important to any website wanting to actively sell products and services on the web. When businesses started selling online it was accepted that using credit cards for Internet purchases was a bad idea, because it was trying to apply an offline technology to the Web. Various companies launched online payment currencies for example “beenz”, but they didn’t achieve critical mass. Therefore, roughly a decade on from the people starting to sell on the web, still using credit card to make online purchases and accepting credit cards when offering things online is still as important as ever.

Basically, there are two different ways to accept credit cards online. Let’s compare merchant accounts. A business can either go for a full merchant account, which allows the business to process credit cards via a bank gateway, or they can go with a third party service provider, who processed the credit card charges on behalf of the company. Getting a merchant account costs more initially, but has smaller per transaction fees. Using the services of a third-party service provider costs less upfront, but has more expensive per transaction costs.

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

In most cases, merchants who are already trading locally and want to expand online will most likely be suited to getting a merchant card processing account. Most likely, Usually they will already have an offline merchant account and will expand the remit of that account to add the ability to 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’s important that they consider testing their marketing using a third-party service provider. The advantage to the new business is that there’s hardly any upfront cost which means they can test their business model cheaply and easily. If sales boom, they can eventually look to reducing the per-transaction fees by applying for their own credit card processing account. If the market isn’t profitable, they can quickly exit the marketplace without having expended much capital to get their own merchant account.