An Introduction To Accepting Credit Cards On The Internet Part-13

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.

Lastly in this argument is 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 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.

INVEST, INVESTMENTS, LOANS AND MORE

An Introduction To Accepting Credit Cards On The Internet Part-12

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 bouyant 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.

INVEST, INVESTMENTS, LOANS AND MORE

An Introduction To Accepting Credit Cards On The Internet Part-11

For the new startup who have tried unsuccessfully to gain their own merchant ID, third party processing is the way to go.

As with any other method there are benefits and distinct problems with third party processors.

The first benefit is clear - easy, quick and cheap setup. Many third party processors also offer additional services, some paid for, some free.

For example, Kagi can set you up with a free digital download service so customers can instantly and safely download your ebook or software after purchase.

Others such as Clickbank come with built-in affiliate software as standard. These are just two examples I have chosen from many which illustrate possible savings in terms of time and money.

INVEST, INVESTMENTS, LOANS AND MORE

An Introduction To Accepting Credit Cards On The Internet Part-10

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 utilise 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".

INVEST, INVESTMENTS, LOANS AND MORE

An Introduction To Accepting Credit Cards On The Internet Part-9

It's just like your car insurance. Your rates are better if your car is nice and safe (boring, even), 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.

You might just get a nice surprise, and the sources we recommend allow you to apply without paying an application fee so there's no risk to you whatsoever.

INVEST, INVESTMENTS, LOANS AND MORE

An Introduction To Accepting Credit Cards On The Internet Part-8

While I have no evidence to back me up on this point I believe that forming a limited company (so you become Pig Farmers Inc. or Swine Herders Ltd.) makes you look more professional and as result less risky. As one can form such a company over the Internet these days for a tiny amount of money I think it's well worth it if in doubt.

INVEST, INVESTMENTS, LOANS AND MORE

An Introduction To Accepting Credit Cards On The Internet Part-7

The greatest tip I can give you when applying through these companies is this - minimise risk. Of applicants that do get refused many of them are refused on the grounds of high risk. That's what these companies look for. So wherever possible, find ways to make your business appear a "safe bet" and you'll greatly increase your chances.

I don't mean lie - far from it - you'll end up in far more trouble than it's worth but...

Aim to start small, selling low priced items. Aiming to sell a few hundred $10 items per month is much less risk than aiming to sell 10,000 television sets. Think small to start off with, then expand slowly.

Prove you're financially solvent - some companies will ask you to prove your personal net worth. They may ask about your credit card bill, mortgage and more so minimize your debt wherever possible.

INVEST, INVESTMENTS, LOANS AND MORE