Being able to take credit cards is vital to any website that wants to successfully sell products and services on the web. When businesses started selling online it was thought that using credit cards for Internet purchases was not ideal, because it was trying to apply an offline technology to the Web. Startup companies tried to offer digital currencies eg “flooz”, but the web-based currencies didn’t flourish. Therefore, approximately 10 years on from the people starting to sell on the web, still typing in credit card numbers to buy online and so accepting credit cards when trying to sell products 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 directly, or they can go with a third party processor, who does the actual credit card processing for the merchant. Getting a merchant account has higher upfront costs, but has lower per transaction costs. Using the services of a third party processor costs less initially, but has more expensive per item costs.

The decision as to whether or not to go for a full credit card processing account or use a third party processor is simply a question of crunching the numbers. Consider these different business types and compare merchant account benefits…

In most cases, merchants who are actively trading offline and want to start selling on the Internet will be suited to getting a merchant 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” processing and simply means that the card holder isn’t present at the point of sale.

For micro businesses starting out online selling new software or a new ebook, it’s important that they consider testing their sales using a third party solution. The advantage to the new business is that there’s very little initial cost so they can test their business model quickly and easily. If the market is profitable, they can eventually look to reducing the per-sale costs by getting their own merchant account. If the market isn’t profitable, they can quickly exit the marketplace without having expended much capital to get a merchant card processing account.