Being able to take credit cards is critical to any business that wants to actively sell goods and services on the Net. 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 a dirt-world technology to the digital world. New companies trialled digital currencies eg “flooz”, but none of the e-currencies took off. The truth is, approximately 10 years on from the people starting to sell on the web, still typing in credit card numbers to buy online and accepting credit cards when offering things online is still as important as ever.

There are basically two different 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 in their own business name, or they can elect to use the services of a third party solution, who does the actual credit card processing on behalf of the merchant. Obtaining a full merchant account has higher upfront costs, but has lower per transaction costs. Using a third party processor costs less initially, but has higher per sale costs.

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

Usually, established businesses who are actively trading offline and simply want to start selling on the Internet will most likely be more suited to obtaining a merchant card processing account. Most likely, It’s most likely that they will already have a real world merchant card processing account and will tailor that account to add the ability to do “MOTO”, which is “Mail Order Telephone Order” credit card orders and only means that the cardholder is not present at the point of sale.

For one-person businesses starting starting to sell on the Internet, it is strongly suggested that they begin by testing their sales using a third-party service provider. The advantage is that there’s very little upfront cost so they can test their market cheaply and easily. If the market is profitable, they can consider decrease the per-item costs by obtaining their own merchant card processing account. If sales are poor, they can quickly leave the market without having paid significant upfront costs to get their own merchant account.