How to Accept Credit Cards on Your Website

If you are thinking about selling a product or service on the Internet, then you have probably wondered how to go about accepting credit cards. A decade ago, it was normal for people to pay with a check or money order, but nowadays it is absolutely vital that you accept credit cards. Not only will this allow you to capture so-called "impulse buyers" at a higher rate, but it also adds to the professional image that your website needs to be successful.

There are two basic ways to accept credit cards. The first is to setup a merchant account directly with the credit card companies. This is the route that most traditional brick and mortar businesses must go. This was also the route that website owners had to take until much more recently.

The other option is to go through a third party merchant. These companies act as an intermediary between you and the credit card companies. They will accept credit card payments from your customers on your behalf in exchange for a small fee.

So which should you choose?

Well, there are advantages and disadvantages to each setup. With a direct merchant account, you can usually get a lower rate per transaction. However, there is generally a higher setup cost, and you are responsible for keeping track of all the orders and for ensuring that you protect the privacy of your customers' information. You must also apply directly with each credit card company, and it can take some time to get everything approved and squared away.

A third party merchant can be a great option for less established business owners who want to test the waters. The approval process is usually quicker and easier, and you can begin accepting credit cards for your product within a few days. If you aren't an established company, your customers can feel more secure paying through a brand they already trust, rather than giving you their credit card information directly. However, the downside to all this is that the third-party merchant almost always charges a higher per transaction fee than you might be charged directly by the credit card company. After all, they are providing you with a good service, and they need to pay their bills, too.

The good news is that you can always switch from one method to another if you find that it doesn't meet your needs. If you are just starting your online business, it is probably a good idea to begin with a third-party solution. One your business becomes more successful and a reduction in credit card fees would represent a significant boost to your bottom line, you can upgrade to a direct merchant account.