Internet Merchant Accounts For Innocents Abroad

If you want to sell on the internet, your need to accept credit cards. To accept credit cards, you need a merchant account, or access to one. There're two ways of getting this: Get your own merchant account, or 'pimp' off someone else's.

The latter is the option most new merchants choose. You use a third-party to process your payments, and they take percentage. Here are a few popular ones:

PayPal.com (http://www.paypal.com)

I don't recommend them as your main processor. See http://www.paypalsucks.com. PayPal is popular because it was 'firstest with the mostest' on auction sites. For this reason, eBay bought them out. PayPalSucks.com alleges that if you have a bad order they freeze your account, and can even dip into your bank account to make up any shortfalls. Mitigating circumstances are not taken into account. I've read enough complaints about PayPal on webmaster forums to heed them.

The usual rejoinder is; "But I've never had any problems with PayPal". To which is usually retorted "Just wait 'till you get a chargeback!"

A chargeback occurs when someone asks their credit-card company for a refund. They say they didn't get the goods, or they never made the order, or the goods were not as advertised. This is passed on to the processor, who in turn debits the merchant. Or drops him entirely. You don't want too many of these.

I've used them for years for small amounts, with no problem, but on the basis of others' complaints in webmaster forums, I wouldn't use them for large ones. Don't leave large amounts 'on deposit' in any internet-based company; they're not banks, and even banks go bust occasionally.

The best use for PayPal is to entice customers who already use it. Find another provider to be your main one. One like ...

2Checkout.com (http://www.2checkout.com)

This is a factoring service like PayPal. Unlike them, they have a pretty good reputation with webmasters. Like PayPal, they don't provide you with a merchant account; they process your orders through their own.

This is why such sites have to be very stringent; they are answerable to their own merchant account provider. Too many bogus orders, and they go out of business.

This is why third-party factoring services like 2Checkout are very useful to a newbie merchant: fraud prevention. They can screen out suspicious orders.

Most merchants would like to think they can sell worldwide. The fact is most of the world is poor; MOST countries can't afford your goods. So some citizens try to get them fraudulently.

A smart merchant would bar most of the world from accessing his cart, and only accept orders from the USA, Canada, western Europe, Australia and New Zealand, and his home country. Harsh, but you'll sleep better at night.

WorldPay (http://www.worldpay.com)

A well-regarded service. I found adding it to the Oscommerce cart (http://www.oscommerce.com) a bit of a chore, but it worked. More expensive to join than 2Checkout. You don't hear many gripes about WorldPay, which is rare in webmaster circles.

ClickBank.com (http://www.clickbank.com)

Handy if you're selling a few items of inexpensive software to start off your business. They'll let you up the price once they're sure of you. I managed to get them to go up to $150 (whoo!). I was very jealous of their system. It's well designed and extremely 'viral'; they're basically a huge affiliate program. Join ClickBank, and others will try and sell your product for you.

They allow you to block whole continents from trying to buy your product, and that is good. The odds are that a $25 order for an ebook, from a third-world country, is fraudulent.

If an order looks dodgy, it probably is. Contact the customer by 'phone or email. If you don't get a satisfactory reply, refund the card.

When you're making $1000+ a month, get your own merchant account.

MerchantSeek (http://www.merchantseek.com)

A useful collection of affiliate links to merchant account and processing providers. Scroll down their front page to their search tool. You can find an account that suits your needs. This is most helpful to non-U.S. merchants, or those seeking 'international merchant accounts'.

In the UK, look for 'merchant services' at:

Barclays bank (http://www.barclaycardmerchantservices.co.uk)
NatWest (http://www.natwest.com)
Bank Of Scotland (http://www.bankofscotland.co.uk)
Royal Bank Of Scotland (http://www.rbs.co.uk)
Streamline (http://www.streamline.com)

UK processing services are:
Secpay (http://www.secpay.com)
Netbanx (http://www.netinvest.co.uk)
Protx (http://www.protx.com)

Having one's own merchant account means paying less in processing fees.

IMPORTANT: You should specify up-front that you are looking for an internet merchant account. Internet transactions are viewed as higher risk than those by bricks-and-mortar businesses. The technical term is 'card not present'.

Some things you may need, if applying for an internet merchant account of your own:

Business bank account;
Photocopy of a voided cheque for said account;
Copy of the articles of incorporation of your company;
Photocopy of your return policy information;
Trade references;
Photocopy of your driver's license or passport.

In short, you need to prove that both you and your company are what you say they are. Your account provider is taking a chance on you. You might send them a ton of bogus orders. A bank is a business too, not a community service. Help them to make the right decision! The more you can establish that you are bona-fide, the lower the cost of your account.

Things to avoid, if you can:

a) Expensive credit-card processing software rental or hire-purchase.
b) Monthly fees.
c) High discounts (the % of your sales they keep).
d) Fat fees up front (anything over $500 is a joke).
e) Salesmen calling you up with a spiel.
f) Getting lumbered with hiring their shopping cart as well.

Things to look out for at sites offering merchant accounts:

If you need to maintain a U.S. presence - full U.S. incorporation, U.S. server, U.S. offices, U.S. bank account - or NOT.

Also if they want a deposit, and the size of their application fee. And the usual monthly minimums, discounts etc.

Avoid getting into any software purchase or equipment rental. You can sort all that out later, for less money. There are plenty of good payment gateways, like Authorize.net (http://www.authorize.net) just itching for your business.

PS: Don't accept a merchant account from an Eastern European bank. I did, some years ago. The bank went bust. One guy wailed on Usenet that he'd lost $10,000 dollars. Luckily for me, business was bad that year!

About the author: T. O' Donnell http://www.tigertom.com is an ecommerce consultant in London, UK. His latest projects are a mortgage calculator and ebook, available at http://www.tigertom.com/mortgages-uk.shtml

---

What Are The Barriers of Implementing E-Commerce Solutions

What is electronic commerce?"Electronic commerce is about doing business electronically.... Read More

When Do You Ask For A Refund?

Have you ever asked to have your money refunded after... Read More

The Census and the E-Commerce Wave

Understanding business and product sales can sometimes put me in... Read More

12 Powerful Ways To Use Autoresponders That Will Take YOU To The Top

If only I had known that autoresponders are a necessity... Read More

Retirement Signature Frames ? The Perfect Retirement Gift!

When most people think of a retirement gift, they think... Read More

Dont give up on your business!

Summer must be when many work at home Mom start... Read More

Increasing E-Commerce Website Sales: A Guide for the Online Newbie

Because of this encouraging surge in activity, many individuals are... Read More

How to Boost Conversion Rates, While Lowering Merchant Account Fees!

Using an Address Verification System (AVS) when processing your online... Read More

Saving Money On Your E-commerce Site

After building and transferring many e-commerce sites it still amazes... Read More

How To Turn Any Product You Sell In To Residual Income

The concept of this is for you to offer a... Read More

Mr and Mrs Smith Go Online, as Internet Technology Moves from Fantasy to Normality

According to NOP World, 48% of all Internet users have... Read More

The Webmasters Assistant

There are many tools available to a webmaster to analyse... Read More

Paypal Primer

To conduct business on the Internet, whether informal, one-time only... Read More

How To Prevent Your 3rd Party Merchant Account From Suspension

What would you do if you were sent an email... Read More

The Five Most Commonly Encountered, Off-putting E-commerce Errors

While getting less public handwringing than during holiday season, the... Read More

E-Gold

E-gold is a digital currency, used extensively on the Internet... Read More

Intranet Portals ? Collaboration through Team Rooms

Knowledge Management for beginnersKnowledge Management (KM) can be defined simply... Read More

Online Payments Make It Easy For Your Customers To Buy

In the last column we discussed the process of credit... Read More

Ecommerce - Boost Your Business ROI

Did you know that over 90% of all online orders... Read More

Precautions Necessary for an Online Brokerage Business

Maybe no business requiring little or no capital pays as... Read More

Electronic Commerce Tax Jurisdiction and Principles of Permanent Establishment

The principle of "permanent establishment" is very important for avoidance... Read More

Home Sweet Home Page

"Your home page is the world's introduction to you and... Read More

Content Ever be Profitable?

THE CURRENT WORRIES1. Content SuppliersThe Ethos of Free ContentContent Suppliers... Read More

Six Components Of A Good E-Commerce Site

Businesses, which are still sitting on sidelines and not doing... Read More

The Secret Science Of Online Shopping

In theory you could create a retail web site with... Read More

How to Receive Payments for Your Online Sales

Once you decide which products you are planning to sell... Read More

Do Your Online Brokerage Business With Zero Down

If you have little or no capital but you want... Read More

Does Your Shopping Cart Have a Squeaky Wheel?

Have you ever gone grocery shopping just before a holiday?... Read More

Cheap Cigarettes, Discount Tobacco and Cigars Online - Is It Legal?

Many people online today still believe that buying tobacco products... Read More

Delivering Information Products Through Paypal Automatically

Paypal is one of the wonders of the web. Never... Read More

How To Find the Best Merchant Account For Your Business

What a great idea! Start accepting credit cards and watch... Read More

The ClickBank E-Commerce Solution

ClickBank.com can offer you multiple solutions for your e-commerce business.... Read More

Coupons & Rebates

Yes, it's true, coupons are not just for newspapers anymore.... Read More