| Processing credit cards for your customers' | | | | merchant account can have a significant |
| purchases can easily comprise the bulk of | | | | effect on your profit margin. Most merchant |
| your online store's sales volume. Without | | | | accounts require a minimum sales volume. If |
| having the means to charge credit cards, the | | | | that minimum is not met, a monthly charge may |
| majority of your customers will simply leave | | | | be incurred. If your sales volume is low, you |
| your website. Fortunately, there are several | | | | may find that the merchant account is |
| options for processing payments. Business | | | | actually a drain on your profits. Using a |
| owners can choose between using their own | | | | third party credit card processor can be a |
| merchant account or using a third party | | | | less-costly alternative. |
| payment processor. There are reasons that | | | | |
| support both cases. In this article, we'll | | | | Less Maintenance |
| discuss some of the reasons you may want to | | | | |
| use a third party to process your credit card | | | | Processing credit cards through a merchant |
| transactions. | | | | account requires that you use a payment |
| | | | gateway, a shopping cart and an API. While |
| Not Eligible For A Merchant Account | | | | many business owners hire programmers to |
| | | | handle these details, doing so can become |
| Even though merchant accounts are easier to | | | | expensive. Small business owners may not have |
| secure than they were years ago, many | | | | that option. If you don't have the budget to |
| business owners are still ineligible. There | | | | hire capable programmers, you may have to do |
| may be a number of reasons why this is the | | | | the job yourself. If your own programming |
| case. For example, the major credit card | | | | skills aren't sufficient, getting started |
| companies (Visa, Mastercard, etc.) only | | | | with a merchant account may be difficult. You |
| extend merchant accounts to registered | | | | can effectively outsource many of the |
| businesses. If your business is not legally | | | | programming chores by using a third party to |
| registered, you'll find it difficult to get a | | | | process credit card transactions. They'll |
| merchant account. Other potential issues | | | | take care of any coding issues and problems |
| include being considered a high credit risk | | | | when they occur. |
| (due to credit history or the type of | | | | |
| products offered) or being blacklisted as a | | | | Potential Drawbacks |
| "terminated merchant." In each of these | | | | |
| cases, using a third party payment processor | | | | There are, of course, drawbacks to using a |
| may be necessary. | | | | third party payment processor. First, you'll |
| | | | pay higher transaction fees (often up to 15% |
| Small Number Of Products | | | | of the transaction amount). Second, you'll |
| | | | have to comply with the third party's rules |
| If the number of different products that your | | | | (which can often seem inflexible). Third, |
| business sells online is limited, a merchant | | | | using a merchant account looks more |
| account may be more trouble than it's worth. | | | | professional than using a third party payment |
| The extra fees for each transaction along | | | | processor. And lastly, you won't be able to |
| with the myriad of other expenses attached to | | | | build a credit history while using a third |
| a merchant account might make using a third | | | | party. |
| party payment processor appealing. Plus, the | | | | |
| effort of finding a payment gateway, setting | | | | In the end, there isn't a clear cut solution |
| up a shopping cart and resolving any | | | | for every business. Circumstances will |
| programming issues may require too much | | | | dictate which solution is most appropriate. |
| effort for your limited catalog of products. | | | | When you're searching for a way to process |
| | | | credit card transactions, keep the above |
| Low Sales Volume | | | | factors in mind while you weigh your options. |
| | | | That's the best way to find the solution that |
| If your business processes a low monthly | | | | meets your needs. |
| sales volume, the costs of maintaining a | | | | |