If you ever search with the search term 'Internet merchant account,' you will find a staggering 522,000 results! Chances are that if you are reading this article you have an online business or are thinking of starting one
If you sell products or services online, you will require a payment gateway or a system to accept payments online. Typically, customers pay using credit cards. However, there are other ways of accepting payments over the Internet including electronic checks and e-wallet systems. But the one thing you can't do without in order to give your customers the facility to make payments using credit cards is a merchant account.
Things To Know About Internet Merchant Accounts
Before you start seeking out a solution, you need to familiarize yourself with the different factors. Let's take a look.
When you accept credit cards online, you require many different components.
Between being paid by a customer for a purchase and getting the money in your corporate account, there are three steps.1. Payment Gateway - It is in the form of a code. The code transmits your customer's order to/from your merchant account provider. A payment gateway allows you to accept all the billing information of your customer such as credit card information and amount to be paid before actually charging the card.
2. Internet Merchant Account - This account is with a financial institution or bank. It makes you capable of accepting credit card payments on your website. Unlike what you may think, the credit card information collected through the payment gateway is actually transmitted to the merchant account provider and not your bank.
Unfortunately, many local banks don't offer accounts to online merchants because the transactions are risky in nature and prone to fraud and scams. Therefore, it is extremely important that you protect your site against fraud and check with your provider on how to do it.
3. Website - Your website has to be integrated with your merchant account provider. You will get detailed instructions to do the same by your provider.
How Much Does An Internet Merchant Account Cost?
Since there are many different merchant service providers, you need to do proper research to understand the various fees and costs involved. The most common costs are:
- Application Fees (charged up front)
- Recurring Fixed Fee
- Discount Rate
- Fixed Transaction Fees
- Account Termination Fees and
- Miscellaneous Fees
Getting an Internet Merchant Account