by: Jakob Jelling

The great majority of business conducted online is processed with a
credit card. Also, credit card sales tend to be four times larger
than a sale completed any other way. Knowing that most people decide
to use a credit card and spend more when doing so, it only makes
sense to be able to accept credit card payments.

The first step to being able to accept credit card payments is
getting a merchant account. A merchant account is a special type of
bank account that is able to receive payments from credit card
purchases. Along with your account you will also need a hardware or
software solution to actually process the payments, but this doesn't
have to be supplied by the company providing your merchant account.

For online credit card processing there is one extra step, you also
need a payment gateway. A payment gateway is a company that provides
real time authorization of online transactions. When looking at
gateways make sure that they are compatible with your site's
software and your financial institution. You may wish to research
your gateway and financial institution options before signing up for
any services.

When researching your merchant account providers you may be
surprised at the number of options available to you. While there are
a lot of options, selecting the best provider for you is easy to do
by knowing a little about what each company offers and how much they
charge for their services.

The first step should always be to seek a mentor. Do you know
someone who currently is conducting a similar business? If so ask
them who provides their merchant account and what their thoughts are
on that provider as well as others that they may have tried. After
asking around search the Internet for people's opinions on merchant
accounts. While opinions are not a good reason to base a decision,
their accounting of the service they received and the ease of
company to work with are valuable information to know.

After determining which companies will be the easiest to work with
you can begin to narrow down your options by examining the services
offered and history. A good merchant account provider should have
extensive experience working with growing businesses. This
experience will allow your merchant account provider to be able to
set up your account faster, will ensure that they can expand their
services as your company grows and requires more options and most
importantly, has the experience required to actively combat fraud
and charge backs.

Of course nothing is free, and your merchant account is no
exception. The amount that you must pay will vary from company to
company but the basics of your bill should be the same. If the
company you are considering is charging more you may wish to seek
another merchant account provider.

The biggest single cost is the set up costs. Your set up costs
include your application fees, equipment costs and deposits. These
fees tend to average about $275 but vary depending upon the options
you have selected. For example, your start up costs will be much
higher if you have decided to purchase your credit card processing
equipment instead of leasing it. This may be an economically viable
solution after adding up the amount of the deposit that will be
required if you lease the equipment and the leasing fees for a year.


Another thing to keep in mind is the amount that your merchant
account provider will be charging for each completed transaction. On
average you will be charged 2.5% of the sale and there may be a few
more annual fees. Be sure to very closely examine that amount you
will be paying and what additional fees you may have to pay as each
company will be different and the difference may save you a lot of
money each year.

Starting and having a business grow is a very exciting time for any
business owner. As you expand into new markets, such as online
sales, you will find a plethora of new options and opportunities.
After deciding to expand be sure to carefully consider your options
in order to make your next step as smooth and cost effective as
possible.

About the author:
Jakob Jelling is the founder of http://www.cashbazar.comVisit his
website for the latest on personal finance, debt elimination,
budgeting, credit cards and real estate.