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