Online Merchant Accounts

If you will be taking credit card orders on your website you will need an online merchant account.

An online merchant account is basically a "bank account" established with a payment processor for the acceptance of credit card transactions. The Internet merchant account acts as an intermediary or clearing house between your bank and your customer's credit card account. 

Internet and ecommerce merchants usually pay higher fees than "brick and mortar" retailers because they require a "Card Not Present" Merchant Account. That means you are accepting a credit card online without actually seeing the card yourself. The fees that you pay for accepting credit cards online are broken down as follows:

• A discount rate 
• Transaction fees 
• Monthly fees 

For example, the discount rate can run 2% - 4% of revenues; transaction fees of up to $1 per order can be charged by the bank, processor, or both; and monthly processing fees may run between $20 - $40 per month. Additional fees may include an application fee (up to $100), address verification, monthly minimums, statement fees, chargebacks, and annual maintenance fees

Depending on the size of your business and how many sales you make each month you can either obtain your own merchant account or go with a third party merchant account.

Your own merchant account can save you some money, however a third party account, while costing a bit more, will handle all the details like paying the monthly bank fees, assuming the risks of fraud and charge backs, and handle all the secure shopping your customers will expect when shopping online. Typically there isn't a set up charge, gateway fees, SSL charges and shopping cart set up, however fees can range from 3-13%. Some companies charge a set up fee and a per transaction fee.

Merchant account options:

Third Party Accounts

Paypal is an easy alternative for many online businesses, however a few things to note:

• If the person who is paying you doesn't themselves have a Paypal account, they have to sign up for a paypal account before making a payment to you. However the signup process is very easy, so it's not likely you'll lose many sales. 
• They can set limits on monthly transactions 

Your Own Merchant Account

Ipowerpay - This is a favorite of some of the internet's top marketers. It's popular because they have no upfront costs and that's because they are not a third party processor, with Ipowerpay you have your own merchant account. They also have no setup fees or many of the fees other merchant accounts require. It's basically a free merchant account.

But the biggest advantage of Ipowerpay is they are 100% Internet Marketing friendly (...not all merchant accounts are). If your business is online, you'll have a much easier time with Ipowerpay.

Setup may take a little longer than Paypal or other third party merchant accounts (48-72 hours) but you save money in the long run and they take many of the obstacles out of setting it up. You have much more control which is something I prefer in my business. This is the choice I recommend.

Get a free merchant Ipowerpay account now!