Obtaining a Merchant Account and Process Payments in Real-Time

Today, it's almost unthinkable to operate an online business without accepting credit card payments; plastic has become the means of conducting transactions over the Internet. Not only are credit cards everywhere, but increased security, as well as more stringent privacy guarantees, have all but won over the confidence of online consumers. If you're starting an online business - or integrating an electronic storefront into your company's existing business plan - expect credit cards to be your primary medium of exchange.

You have two options when it comes to accepting credit cards online: take advantage of real-time automated processing or use off-line, manual methods. If you're serious about succeeding in the online marketplace, you'll go with the former. Automated payment processing embodies the essence of what e-commerce has always been heralded to be - a secure and convenient means of buying and selling goods and services over the Internet. Your customers receive near-instant notification of payment authorization, and you, the merchant, simply wait for proceeds from your sales to show up in your bank account.

The first stop on the path to accepting online credit card payments is obtaining a merchant account. If you currently accept credit cards at your brick-and-mortar store, check with your financial institution to find out if your account can be used for online sales as well. If not, you'll need to obtain a Card Not Present (CNP) merchant account.

Of course, not all merchant accounts are created equal. Altogether too many business owners make the mistake of selecting a merchant account provider based solely on the rates they charge, and neglect to consider the importance of customer service. After all, what good is it to have a tenth of a percent lower discount rate if you can't ever get a bank rep on the phone to discuss a simple chargeback? Or worse yet, what if your business comes to a standstill while you try in vain to contact someone about increasing your monthly limit? Rates are indeed an important consideration, but they're by no means the only one.

Standard merchant account fees consist of an application or setup fee, a per transaction fee, and a discount rate (which consists of a percentage of each transaction). Also expect to pay a monthly statement fee.

The fees charged by merchant account providers vary based on a variety of factors that include:

• The type of product or service you intend to sell
• The price of your products/services
• Your credit history
• The number of transactions you expect to process

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The following articles discuss how merchant accounts work and deal with issues central to merchant accounts and payment processing.

Don't Fly By Night: The Inside Information on Merchant Accounts
Everything you need to know about merchant accounts and more - a close look at the tangible features and intangible benefits of a strong provider.

Options for Accepting Credit Cards Online
A detailed look at how online credit card processing works - and what to look for in a payment processing service.

All About Merchant Accounts A detailed summary of merchant accounts providing definitions of key concepts and terms

Get SET to Reduce Chargebacks A discussion of credit-card chargeback policy.

Antidote for E-Commerce Mafiosos This article offer some thoughts and a word of caution on merchant accounts for e-commerce entrepreneurs.

Your Merchant Account and "Puffy Director Pants" Taxes A discussion of issues e-tailers should consider when establishing a merchant account.

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