Ecommerce Payment Merchant Account or Third Party Processor
Setting up your payment processing or ecommerce merchant account
Once you have setup your ecommerce store and are ready to start trading you will need a method of accepting payments from your ecommerce customers. In this day and age an online store cannot survive by accepting cheque payments only so you will need some method of accepting online credit and/or debit card payments through your online website shop. Generally there are two basic options, either using a third party payment processor such as paypal or applying for your own business merchant account direct with a bank.
Many third party payment processors such as Paypal or Nochex are available.
Third-party online payment processors
We will discuss some of the reasons to use a third party processor. It is generally easy to become accepted and start accepting payments online quickly. If your business is fairly small or you are just starting out in ecommerce you may not be processing large numbers of transactions, making third party fee structures more attractive. If you are not a registered business, have a bad credit rating or are accepting payments considered high risk a bank may turn you down for a merchant account. Some providers that offer third party online credit card processing are Paypal, Nochex, 2checkout and Worldpay.
Paypal
Owned by ebay Paypal is a worldwide known third party payment processor with over 100 million registered members around the world. Paypal allows you to accept payments from many eligible countries in various different currencies with fees from 1.9% - 4.9% + $0.30 per transaction. Allowing you to accept all major credit/debit card online payments with a payment gateway that is easily used in conjunction with most available ecommerce shopping cart software.
Nochex
UK based third party payment processor Nochex offers various account options. From an account that allows only UK transactions upto an advanced account called the Merchant Account that allows you to accept payments from outside the UK also. Fee rates vary from 2.9% + £0.20 per transaction upwards with a one off setup charge for the advanced Merchant Account. Nochex also has additional chargeback protection for the seller superior to many other third party payment processors. Nochex integrates well with most ecommerce solutions available.
Worldpay
This third party payment processor offers a virtual terminal option that allows you to accept credit or debit card payments over the phone, via fax or by mailorder. Worldpay also integrates as a payment gateway with many ecommerce software solutions available. Worldpay charge a setup fee of around £200 plus a monthly charge of £30. This is in addition to per transaction charges that vary from 3.9% - 4.5% for credit cards and £0.45 - £0.50 for debit cards.
A Merchant Account has advantages for larger ecommerce businesses
Merchant Account Ecommerce Business Solutions
Merchant accounts are setup direct with the bank that is processing your ecommerce card payment transactions. If you are processing reasonably large quantities of transactions you will probably find that merchant account charges will be lower than third party processors. You will often incur monthly minimum fees with merchant accounts that you may not incur with third party payment processors. Charges per transaction will vary greatly from bank to bank but will usually be lower than most third party processors. You will also have the option to use credit card processing machines in conjunction with your merchant account if required. Some banks merchant accounts will offer the use of a virtual terminal to allow you to process fax, mail and telephone card transactions. Many banks have their own payment gateways that can be integrated into major ecommerce store software packages. But you can also use your merchant account in conjunction with other payment gateway solutions if necessary.
