Choosing An Internet Merchant Account Andy Quick

Surf to Google and perform a search on "Internet Merchant Account". The results are staggering (472,000 results!) If you have created a web based business and need to accept credit card payments, your choices are limitless. Before you partner with a provider, take time to understand different components of internet credit card processing, and know what to look for in a merchant provider.

How It Works

Accepting credit card payments through your web site actually requires multiple components. Between a paying customer and your bank account, three layers exist:

Payment Gateway - This is code that will transmit a customer's order to and from an internet merchant account provider. The payment gateway provides you ability to accept customer billing information (credit card number, credit card type, expiration date, and payment amount) and necessary validation steps that must be followed before credit card is actually billed.

Internet Merchant Account - A Merchant Account is an account with a financial institution or bank, which enables you to accept credit card payments from your clients. The payment gateway actually transmits billing information to internet merchant account provider. Unfortunately, most local banks do not provide internet merchant account capability.

The main reason why most local financial institutions or banks do not want to provide online merchant accounts is because transactions conducted over Internet are totally different from face to face transactions where a signature is required to authorize purchase. This makes online transactions prone to credit card fraud. Fraud protection should be one of your primary considerations when choosing an internet merchant account provider.

Web Site - Regardless of which merchant provider and gateway service you choose, your web site will need to integrate with your service providers. Most providers include detailed web integration instructions.

How Much Does It Cost

Understanding total costs of your merchant provider can be tricky. Remember my Google example - there are more merchant account providers than there are people looking for internet merchant accounts so ask questions and be picky! Typically, an internet merchant account will have three types of costs:

- Up Front Application Fees - On Going Fixed Fee - Discount Rate - Fixed Transaction Fee - Termination Fees - Miscellaneous Fees

Let us discuss each type of cost:

Up Front Application Fees

No, I'm not suggesting that you yank out an AK-47 and blow your Web designer's life away. I'm using "kill" here in same sense as you might say "kill lights" or "use kill switch." Turn off your Web designer's money-wasting flood of hostage-taking tactics.

If you read this article and can honestly say that your Web designer doesn't engage in these practices, by all means keep them around! There are, Heaven knows, precious few such designers around. But if you're like most of us, at least a few of these behaviors are likely to sound all too familiar. In that case, it's your duty to turn off your Web designer's money spigot and find someone else (or learn to do this stuff yourself; it's not that hard).

Any semi-literate eight-year-old can design a Web site. Just look around Web and you'll conclude that it is being designed largely, if not entirely, by semi-literate eight-year-olds. That does not mean that these people can design a useful and successful small-business Web site, though.

Ask yourself this simple question. Can you or someone on your staff easily add navigation buttons and pages to your site and update contents of existing pages? If your answer is "No," then your Web designer is holding you hostage and you should kill him or her. Period.