Article: Online Merchant Account Costs and Alternatives

by Bruce Zhang




Merchant Account Basics


A Merchant Account is a commercial bank account established by a merchant to receive payment via credit cards. Three parts are required to accept credit cards. Besides a merchant account, you need a local bank checking account to deposit funds and a processing solution, such a terminal or webbased store front to take credit card payments. Online merchant account, or ecommerce merchant account, is a merchant account that can take credit orders on the Web.


Cost of Merchant Account


An online merchant account will boost your online sales, but merchant account incurs various types of cost. A merchant account usually requires a onetime setup fee between 50 100. Some merchant account providers waive the setup fee in promotion period or in conjunction with other services. Other costs include gateway fee, statement fee, annual fee, transaction fees and discount rate fees.


Accept Credit Card without Merchant Account


When you first start an online business and have limited resources, the alternative would be to use the services of a credit card processor. You can enjoy the benefits of processing credit card transactions online without the requirements of a merchant account and high costs involved. Paypal, WorldPay, PaySystems and Clickbank are some of popular credit processing services. Popular shopping carts or online storefronts, such as eBay Store, Yahoo Store and Microsoft bCentral, offer builtin credit card processing capability.


International Merchant Account


International merchant accounts, or Offshore Merchant Accounts, are merchant accounts that allow the merchants to accept payments from around the world regardless of where your business or customers are located. Comparing to an online merchant account, two major services that come with an International merchant account are MultipleCurrency Support and International Fraud Protection.


Wireless/Mobile Merchant Account


Mobile merchants used to face unique issues when accepting credit card payments. With the advancement of highspeed wireless networks and mobile technology, mobile businesses are no longer limited in their payment options to just cash or checks.


Many mobile merchant account (http://www.4thmedia.net/online_payment/mobile_merchant_account.php) service providers waive application fee and setup fees to attract more businesses. However, the use of wireless service provider does incur the expense of the terminal hardware, activation fee, monthly service fee, and transaction cost.


Copyright @2005, Bruce Zhang


Bruce Zhang has over 10 years experience in developing ecommerce and ebusiness application such as literature fulfillment (http://www.4thmedia.net/order_fulfillment/literature_fulfillment.php) and supply chain management applications.


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