Online Business Junction

All the Online Business Resources, Tools and Information You Need to Succeed Online

Merchant Accounts

In my experience, people prefer to pay online via Credit Card. When my online store first opened, I only offered Pay Pal, checks, and money orders as methods of payment. It didn’t take me long to realize that people prefer an alternative to Pay Pal, checks are a pain, and most folks just don’t use money orders. So within a few months of opening my online store, I got a merchant account so that I could accept credit cards. My sales increased dramatically as a result, and more than 90% of my sales are now paid for via credit cards.

When you’re first starting out in business, however, getting a merchant account can be an expensive prospect. There are generally monthly minimums you must meet, statement fees, PCI Compliance fees, and fees for using payment gateways on the Internet. There are also transaction fees, and these can vary greatly by provider, by type of card and transaction, etc. And if you’re not getting a lot of sales, it’s difficult to justify the expense of a merchant account. You can also get roped into a long-term contract and other hidden fees that you may be unaware of.

Luckily, there are alternatives to the typical merchant accounts. One alternative is ProPay. ProPay is a merchant service provider that offers credit card processing services at very reasonable rates. There are no monthly minimums (just maximums) and they offer a variety of yearly packages, starting with a basic package at around $50 per year. The better packages allow you to process more per month; they also provide for telephone processing, which can be very handy if you sell offline too. And they do have a Virtual Terminal for processing online.

Another alternative is Pay Pal Pro, which is different from a basic business account with Pay Pal, as it provides you with a virtual terminal, and does not require your customers to go through the Pay Pal website to make a payment. Pay Pal Pro costs about $30 per month, in addition to transaction fees. Again, this expense may be a bit much for business owners who are just starting out. But it is an option that is available to you and does not require a long-term contract.

And another very affordable option with NO annual fees is called SquareUp. They offer a free card swiper for use with smartphones; payments can be entered manually too for when credit cards are not present (as with online sales) and their rates are very affordable and reasonable.

The following are some important things to look for when the time comes for you to obtain a merchant account.