Internet merchant accounts and third party credit card processors
Some type of Internet merchant account is necessary in order to have a place to receive funds from credit card sales. Internet merchant accounts can be gained from most major banks. A word of warning - your bank wills more than likely charge like a wounded bull for such an account because of the "risk" involved. You're probably better off utilizing the services of companies who specialize in ecommerce and can tailor a merchant account/payment gateway solution to suit your needs. Another option may be to use a third party processing service such as Paypal or WorldPay. These services are basically a payment gateway and merchant account rolled into one and operated by the same company.
Selecting an Internet merchant account provider or third party processor
Shop around and then shop around some more - this is a very confusing section of ecommerce. If you make enquiries with a company and they don't respond within 24 hours, or are somewhat indistinct in their responses - run like hell away from them. Banks are notorious for utilizing poorly trained salespeople rather than those with hands-on product knowledge or an understanding the complexities of ecommerce. Ensure they explain all charges thoroughly by enquiring about the following rates:
· Statement - the charge each month for issuing you statements on all transactions
· Application fee - some institutions will charge you for the privilege of applying for an account, regardless of whether your application is successful or not.
· Setup fee - once your application has been approved, there may be other fees associated with establishing the account.
· Discount Rate - a percentage deducted for each product sold
· Transaction - added to the discount rate, a flat rate on each transaction
· Monthly Minimum - what you will be charge regardless of the level of sales each month
· Reserve - some providers require you to maintain a certain level in the account to cover chargeback fees.
· Chargeback - the killer fee which may cost you up to US$30 per fraudulent transaction
Source: http://www.tamingthebeast.net/articles2/back-end-ecommerce.htm
Selecting an Internet merchant account provider or third party processor
Shop around and then shop around some more - this is a very confusing section of ecommerce. If you make enquiries with a company and they don't respond within 24 hours, or are somewhat indistinct in their responses - run like hell away from them. Banks are notorious for utilizing poorly trained salespeople rather than those with hands-on product knowledge or an understanding the complexities of ecommerce. Ensure they explain all charges thoroughly by enquiring about the following rates:
· Statement - the charge each month for issuing you statements on all transactions
· Application fee - some institutions will charge you for the privilege of applying for an account, regardless of whether your application is successful or not.
· Setup fee - once your application has been approved, there may be other fees associated with establishing the account.
· Discount Rate - a percentage deducted for each product sold
· Transaction - added to the discount rate, a flat rate on each transaction
· Monthly Minimum - what you will be charge regardless of the level of sales each month
· Reserve - some providers require you to maintain a certain level in the account to cover chargeback fees.
· Chargeback - the killer fee which may cost you up to US$30 per fraudulent transaction
Source: http://www.tamingthebeast.net/articles2/back-end-ecommerce.htm
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