Most business looking to expand their brand presence are moving online. Not only are they providing visual appealing websites to market their products, but they must also be able to process payments through their online storefront. Ecommerce credit card processing can be accomplished in two different ways.
Merchant Credit Account
Setting up a merchant’s account can be the first step to accepting credit cards at your website. An internet merchant account can be applied for through your local bank and is typically viewed as a line of credit. Essentially, you will need to apply for it and then await approval through the bank. Consider offering to move your business accounts to the bank as part of your application for merchant status, as this may assist you in receiving approval.
As part of the merchant’s account, you will need to identify a gateway processor. Essentially, this is the middleman between your business and the customer’s bank or credit card company. This gateway handles all verification and transfer requests, as well as real-time authorizations.
Online, various gateway providers offer packages that include a merchant’s account and gateway processing services. These providers can also provide software for shopping carts and even a virtual terminal. Many providers make ecommerce credit card processing simple for a small business owner.
Advantages and Disadvantages
While both methods have their advantages and disadvantages, here are a few of the primary ones of both. A merchant’s account will offer ease of transaction, fraud protection, quick payments and your business name of the transaction statement. However, these accounts typically have higher costs associated with processing transactions, including hidden fees. You must also handle all dispute, compliance issues and chargebacks. In addition, you must still find a gateway processor, although the fees should be less.
Gateway processors do not have a credit approval process and offer assistance when disputes arise. However, the fees are potentially higher and your business name will not show up on the transaction statement. Not all of these providers have a good reputation and a few have even been cited for fraud.
It is important to remember that each choice comes with specific costs and fees. Therefore, it is important to define your budget and anticipated number of transactions to determine the best choice for your business.
Merchants Bancard provides a gateway processing services and ecommerce credit card processing. In addition, they provide consulting and analysis of current systems.