Merchant accounts, payment gateways, shopping carts - credit card processing
can get pretty confusing when you start looking into the
various aspects of ecommerce.
Let's briefly review the nuts and bolts of the processing of online sales using credit cards.
Now let's look at the merchant account and payment gateway in more detail.
A payment gateway is a separate service and acts as an intermediary between the merchants' shopping cart and all the financial networks involved with the transaction, including the customers' credit card issuer and your merchant account. Think of it as a EFTPOS terminal in cyberspace. It
reviews validity, encrypts transaction details, ensures they are sent to the correct destination and then decrypts the responses which are sent back to the shopping cart.
Payment gateway issues
As with any other ecommerce element, shop around, compare prices and read the fine print. Here are some of the major points to consider when selecting a payment gateway service.
If you have already purchased a shopping cart package, ensure that the payment gateway service is compatible. If a service is not listed, contact the shopping cart vendor for clarification. Many
shopping cart software companies
are happy to support other payment gateway services if there is a demand for
it, and usually at no extra cost.
Ensure the gateway at least offers AVS protection. The Address Verification System (AVS) AVS decreases the incidence of accepting fraudulent transactions by
verifying the cardholder's billing address with the card issuer. Using AVS on your transactions may also benefit you by a reduction in fees charged by your Merchant Bank.
Credit card processors/merchant account reviews
Some type of Internet merchant account is necessary in order to have a place to receive funds from credit card sales.
Internet merchant accounts can be gained from most major banks. A word of warning - your bank will more than likely charge like a wounded bull for such an account because of the "risk" involved.
You're probably better off utilizing the services of companies such as Merchant Warehouse, Instamerchant or Durango Merchant Services who specialize in ecommerce and can tailor a merchant account/payment gateway solution to suit your needs.
Since 1998, Merchant Warehouse has been around since 1998 and has an excellent reputation as being one of the largest, most reputable merchant service providers in the payment processing. With over 100,000 accounts to its credit, Merchant Warehouse has enabled online businesses across the USA to accept credit card payments by offering the excellent deals on merchant processing solutions and by providing a high standard of service and support. I've dealt with them a few times over the years in connection with other companies and have always found them to be quite attentive.
Instamerchant is definitely another interesting proposition for the following reasons:
1. Name recognition. Instamerchant
represents Cardservice, one of the largest brands in the entire industry.
8. Instamerchant is currently offering Taming the Beast visitors very special deals!
Durango merchant services
The Durango Merchant Services team have been around the Internet a long time and I've always found them pleasant to deal with and they are rapid with their application review process. Unlike some merchant account providers, they are very quick to respond, friendly and will take the time to explain your options. Durango offer some additional services, such as high risk merchant accounts and fraud protection services.
Other credit card processing options
Another option may be to use a third party processing service such as Paypal, 2Checkout or ClickBank. These three services are basically a payment gateway and merchant account rolled into one and operated by the same company. In the case of ClickBank they also offer affiliate program features at no extra cost and all three also provide recurring billing services for subscription and premium membership services. These companies are also non-USA merchant friendly.
Something to be aware of - these services usually charge more for transaction processing, so review those charges carefully before making a decision
Selecting merchant account provider or credit card processor:
Shop around and then shop around some more - this is a very confusing section of ecommerce. If you make enquiries with a company and they don't respond within 24 hours, or are somewhat vague in their responses - run like hell away from them.
Banks are notorious for utilizing poorly trained salespeople rather than those with hands-on product knowledge or an understanding the complexities of ecommerce. Ensure they explain all charges to you thoroughly by enquiring about the following rates:
Need micropayment support?
Merchants with products costing just a couple of dollars are at a distinct disadvantage, with transaction fees gobbling up profit margins for micropayments. Paypal has implemented a new micropayment fee structure for payments under $2. The rate is 5 percent plus 5 cents per transaction.
New online business?
If you are a new business with an untested product range,
review well established credit card processor such as Paypal,
while you test the waters, which will incorporate a payment gateway with a merchant
account. Although their transaction rates are a little high, neither charge
monthly fees, chargebacks or any of the other fees mentioned above. or ClickBank,
also incorporate shopping cart applications and other free tools as part of the deal.
In the interests of transparency and disclosure, please note that the owner of Taming the Beast.net often receives goods and services mentioned in reviews for free, or may receive payments or affiliate commissions for advertising or referring others to merchants of products and services reviewed.
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In Loving Memory - Mignon Ann Bloch
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