Best System for Cred. Card. Payment

Payments for what? A membership site? A physical product? A eBook? I could provide differing opinions and recommendations for each. Although Paypal is a start, you should never rely on Paypal for a long term business strategy.

Is it?

Depending on what you're selling, and how, and where, you may find that you have a far bigger market, online, if you're able to take PayPal payments rather than just credit-card payments. I appreciate that they may perhaps not be in your market at all(?), but there are millions of people all over the world who have PayPal accounts but don't have credit-cards ...

Anyway, it sounds as if you may be looking for a "merchant account", then, rather than a payment processor? Or perhaps you have a merchant account already and are looking for a "payment gateway"? Can't actually tell this from your question ... :confused:

There are third party payment processors... they are not merchant account providers but some provide similar services.

PayPal for example is a third party payment processor that offers a lot of merchant tools for transaction management.

There are other third party payment processors that are alternatives to paypal but really should never be considered unless you can't get a paypal account because they generally have higher fees, are lesser know and therefor lesser trusted than PayPal, have more limitations and less features.

Merchant accounts are essentially unsecured lines of credit. They are underwritten based on your credit worthiness by banks. Merchant accounts are connected to gateways which are the software that actually process the payments themselves.

Ecommerce automation solutions and shoppingcarts are software that interface with or connect with gateways. Ecommerce solutions and shoppingcarts provide a nice interface, forms, and links that you can place on your websites to lead your customers into the checkout process, send the order to the gateway, and ultimately do all the back end communication.

Ecommerce solutions get a little more specialized and generally provide features such as email list follow up integration, digital product and content delivery, notification and integration with your in house or third party fulfillment services for physical fulfillment, billing automation for subscriptions etc. There is some overlap between gateways and ecommerce solutions but not much and generally speaking ecommerce solutions do it better so most people use an ecommerce solution or shopping cart connected to their gateway to automate their business.

Usually you obtain a merchant account and gateway at the same time when you apply.

Some merchant account providers charge an application fee... but the best most competitive companies do not and I would always recommend you negotiate telling them that their competitor does not charge any application fee if they try and pull a fast one on you and charge you to become their customer... they want and make money off your business and if they are not willing to waive an application fee they are probably not the kind of company you are going to want to do business with anyway.

Fees:

You will pay a gateway fee and you might pay a small monthly merchant account fee. The total of these fees will average around $30-$35 a month unless you are not using your account and meeting a low base transaction processing amount then you might get charged an extra $20.

If you want to accept American Express with your Visa and Mastercard merchant processing you will pay an additional $7 a month unless you decide to "go paperless" for your American Express statements in which case you will not have to pay the $7 monthly Amex statement processing fee.

Your merchant account gateway will charge you a small per transaction fee. This can vary between $.05 and $.35 depending on your transaction volume, the provider you choose, and what you negotiate with them.

Your merchant account provider will charge you a processing fee % (also known as discount rate) on every transaction. This will vary between 1.75% and 3% generally depending on the provider and what you negotiated with them and the risk level of your business. Most people will fall in the 2.2-2.4% rate if they are with a good provider.

The card brands ie. Visa and Mastercard will pass additional fees on to you to over loyalty programs etc. which will increase your actual processing fees to between 3% and 4% on "unqualified" or card not present transactions (internet transactions). Most people will see an actual rate of somewhere between 3-3.7% after visa and mastercard have their way with you.

Ecommerce solutions:

Some will run from no up front fees where they tack on additional fees of upwards of 5-9% on top of all the other fees I just listed.

Self hosted solutions usually only support paypal. Those that offer credit card processing and data storage built in should be avoided unless you find them on this list: https://www.pcisecuritystandards.org...php?agree=true

If you use a hosted ecommerce solution that stores credit card data that is not on that list then you are not PCI compliant.

Hosted shoppingcarts and ecommerce solutions that offer credit card processing generally range from $30 a month to to as much as $297 a month or more depending on the solution you choose and the volume of business you do.

Every ecommerce solution is different where merchant accounts and gateways are not really that different from provider to provider beyond their bed manners and fees.

Generally the ecommerce solutions that charge you a monthly fee end up costing you less than all other solutions because they do not tack on additional transaction fees.

That's it in a nut shell... it's not all you need to know but it should help you get started.

Don't be afraid to get a merchant account. And sign up for a good ecommerce solution that will automate your billing and help you manage your business with a built in affiliate program.

Having those essential tools is the key to building a scalable sustainable business.

Hey bathunter,

A part from the obvious regarding forming an business entity i would say is a must, that is the first part.

Regarding merchant act, really depends on two main factors if you are a non us citizen or if you are a us citizen. I can only base it on my own personal experiences. I have a US domestic merchant account for my IM store, rates are below
2.49%* (plus $0.40 USD per transaction)
$20 monthly fee for the merchant account & Authorize.Net secure payment gateway
Allows you to accept all major credit cards (VISA, MasterCard, Discover & American Express)

I hope this helps

Fastspring all the way. They allow your customers to pay by Money Order, Check, Paypal, Credit card and I think they are introducing some less popular forms like wire transfer? May be wrong about that last one.

Great company and easy to get started with. No upfront costs either.