Considering a Business Merchant Account

Posted by Logan Marshall on August 25 in 4. Business Services |

Merchant Account.

Using your website to accept payments from clients is not a luxury anymore, and any Internet business that wants to succeed will need to be able to offer this function to customers. Paying by credit card is one of the quickest and most secure methods of payment, however, there are drawbacks. These drawbacks are not worth dwelling on, because you simply have to accept secure credit card payments on your website and most of the negatives are easily remedied or at least prepared for.

The components of accepting online credit card orders.

An online credit card transaction is called a Cardholder Not Present transaction, or a CNP transaction for short. In order to conduct a CNP transaction on your website you will need a payment gateway. This is essentially the code used to securely take credit card details. The payment gateway then passes those details on to your merchant account, the bank or financial institution that actually deals with the processing of the transaction. Of course all of these functions need a website to exist in the first place and selecting the payment gateway that integrates with your site is vital.

The advantages of a merchant account.

Simply put the advantage of a merchant account is that you will have customers. As long as you have a product to sell on the Internet it is imperative that you accept payments from major credit cards. Without this ability you are inviting your customers to use the services of another website that does offer that function. The Internet is supposed to be instant and by only allowing people to make payments via check and postal orders you are taking this functionality away. If a customer sees something they want, they want it immediately not once a check has been posted, delivered and cleared in your bank account.

The disadvantages of a merchant account.

Online fraud is probably the biggest stumbling block that ecommerce has faced since its inception and subsequent widespread use. Because CNP transactions negate the need for the cardholder to be present during transactions it is potentially much easier for fraudsters to take card details and make purchases. Most credit card companies now offer fraud protection, but that cost comes at the expense of the website owner. Chargebacks are the merchant account provider’s way of protecting themselves against this fraudulent activity. A charge will be applied each time you need to give a refund to a customer and you should be prepared for the fact that this will happen at some point.

Examples of merchant accounts.

Most people who use the Internet for any form of shopping or the purchasing of services will have come across Paypal. They were bought by Ebay and are the biggest merchant account available. They are user friendly, have low costs and will integrate with any site you choose by providing you with the payment gateway as well. You won’t go far wrong if you select Paypal to process your credit card payments.

Authorize.net and 2checkout.com are two alternatives you may want to consider. They both offer exceptional integration by having large lists of shopping carts you are able to use in conjunction with your merchant account and they both offer more than reasonable rates.

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