If you have a website and you don't accept credit cards then you're losing massive amounts of business. Even if you do accept credit cards it may be worth considering an alternative that will either offer you better rates or save you time.

In fact, if you're within the United States of America or Canada, there are a large range of options open to you.

Unfortunately if you're like most businesses who are in the Caribbean or are located outside the US and Canadian jurisdictions, life becomes a little more complicated - though by no means impossible.

Whatever your circumstances the aim of this information is to give you a quick start in accepting credit cards on the Internet.

Once you understand the basic concepts then hopefully the other information given on this site will help you decide exactly what's right for you. To enable your site or business to accept credit cards online, there are three methods you can use. They are:

1. Gain your own merchant account from your bank
2. Use a broker or intermediary to gain your own merchant account
3. Use a third party service

Let's look at these three options in more detail.

The most direct route to gain a merchant account is through your local bank. Many banks will automatically send you details of their own particular service when you open a business account.

The problem with many banks is that as large, powerful institutions many are loathe to accept startups or small to medium businesses for internet merchant accounts.

For example, 12 months or more of audited accounts may be required, business plans or evidence of considerable investment capital. Add to this the fact that many banks are still developing their e-commerce services. You see, banks offer different types of merchant accounts depending on the situation.

For example, those merchant accounts for retail use are usually considerably easier to gain than an Internet account. This is primarily because the retail "swipe card machine" (or POS terminal) involves face to face transactions and physically swiping the card, then checking the signature.

On the Internet of course, the number is just typed in and you can't check the signature so there's a far greater risk of fraud. Having said that, banks are slowly starting to introduce services to help Internet companies or businesses who are looking to expand their business reach by going online, but in today's business climate, waiting for your local bank branch to get its eCommerce act together to service you while your current or target market is being eroded by competitors is not a strong business strategy. I feel certain you'd be better putting your time, energy and cash into gaining a merchant account through the second route - using an intermediary.

Intermediate companies do exactly what it sounds - they form a defense between the bank and yourself. Whilst this may at first sound like a disadvantage because there's another body to get authorized by, the matter is quite the reverse.

Intermediary companies understand the banks and what they look for in a new client. They can "pitch" your application right and many such as our own merchant services provider boast enviable acceptance rates and approval time, even for non-US merchants. Wherever possible, make your business appear as a "safe bet" and you'll greatly increase your chances.

For example: Registering a company name or forming a limited company (so for example you become Clay Potteries Inc. or Clay Potters Ltd.) makes you look more professional and as a result - less risky.

You may also be asked about guarantees on your products, monthly overheads of your business, past fraud or any one of a million other questions. For every question ask yourself- "How can I instill more confidence and make my business look safer?".

It's just like your car insurance. Your rates are better if your car is nice and safe, is kept in a garage at night and you've never had a crash, so think of it this way.Even if you do get accepted, you may well find that if you appear safer, the rates you are offered will be better. If in doubt apply.Our merchant services provider will allow you to apply for an internet merchant account for your business without having to pay an upfront application fee so there's no risk to you whatsoever in taking the first step.

The third and final method of accepting credit cards on your website is to use a third party service.In this case, your business itself is not granted it's own merchant ID but rather you utilize the merchant account of another company. Setting up an account with a third party processor is tremendously easy - it's a case of filling in a simple form with your name, address etc. and you're away. Some of these services are free to set up whilst others require a small "activation fee".

For the new startup who has tried unsuccessfully to gain their own merchant ID, third party processing may be the way to go. As with any other method there are benefits and distinct problems with third party processors. The first benefit of this option is clear - easy, quick and cheap setup. Many third party processors also offer additional services, some paid for, some free.

However, now we turn to the negative side of the story. Firstly, most merchant account intermediaries deposit the money paid by your customers in 24-48 hours. This means that you receive payment swiftly which helps keep your business finances buoyant and enable you to expand your operation faster. In contrast, third party processors on average pay every 14-28 days depending on the company in question. Some will even pay you mid-month, for the previous month's takings - meaning you may have to wait up to 45 days for the settlement of funds. Clearly this stunts your business and can leave you open to problems.

Secondly, it's fair to say that all merchant account providers, be they bank, intermediaries or third party processors charge fees. This may involve a set per-month fee and/or a per-transaction fee (such as 5% of the value of each purchase). Unfortunately as you might expect, those of the third party processors are generally far, far higher than those charged to businesses who possess their own merchant account.

There is also the fact that you are far more limited in your dealings with a third party service than your own merchant account. What I mean by this is that you have to send your visitors to their website to make their purchase, which immediately makes you look less professional and you generally have to use the third party processors designated order form, with their name on, though some level of customization is usually possible such as adding your company logo.You're simply in less control of your own matters.

Finally, as you are using the third-party processor's merchant account, and not your own, your customers credit card bill will show up the name of the third party processor you have used rather than that of your company, this is also one of the major causes of chargebacks. In general therefore, I'd regard using third party processors as a "last resort" due to their far higher fees and less professional appearance.

So which of these three methods is right for your business? In the face of unavailability from your local bank branch or high fees and requirements, Intermediary companies are usually the first choice for most businesses that are online because of the cost effectiveness,control, security and independce you are given by having your own internet merchant account. Only you can make this decision but to help you we've featured a whole set of articles and information to help you understand the process in a straightforward way and to easily understand the service which we offer. back to top