A GUIDE TO PROCESSING CREDIT CARD PAYMENTS WITHOUT A MERCHANT ACCOUNT

Merchant Account Is Not A Requirement

Often we read that if you want to start accepting credit cards to give your business a boost, you need to first open up a merchant account. Well actually, it is not really true. You can begin processing credit card transactions without opening up a merchant account.

Why An Option Other Than A Merchant Account?

If you have just started an online venture or you are extending your business over the Internet for the first time, it is a fact that you are probably not too sure what to expect.

A whopping 95% of online ventures fail. There are a range of reasons given for this. One of them is the fact that merchants overestimate the number of credit card transactions per month. They end up investing in merchant accounts that incur them a monthly expense much higher than the income it is supposed to bring.    

Investing in the services of a third party credit card processor instead of a merchant account provider will help you test waters with a significantly low cost. You can understand the needs of your business and the exact average online credit card transactions and figure out if the online venture is profitable for you. With the money that you save from spending on your own merchant account, you can invest in other areas such as advertising which may help build your business.

Getting the services of a third party credit card processor also doesn’t require you to understand the technical-know-how immediately. You can take the time to learn about it through experience. The shopping carts and other technical issues are simple and easy to manage.

How Do Third Party Credit Card Processors Work?

Once you have signed up for the services of a third party credit card processor, your website will be linked to a secured webpage of the third party. When your customers are ready to make their payments, they will be directed to this secured webpage.

Once your customer provides all the required credit card details, the transaction will be processed by the third party credit card processor. Their bill will show a payment made to the third party credit card processor. At the end of the transaction, your customers will be directed back to your website. That is all there is to the process.

The Options

There are a variety of third party options available in the market. The most widely used system is PayPal. It is one of the easiest to use. It accepts international merchants and supports quite a few currencies. There are no set-up costs and is very affordable. However, there has been a range of complaints and lawsuits against PayPal. You must weigh the pros and cons before signing up for it. Quite a number of customers insist on paying by PayPal. So you may lose quite a bit of customers is you do not have PayPal.

Other options include CC Now, ProPay, iBill, ClickBank, 2Checkout.com and Google Checkout. For more information, please refer to the following websites:

http://www.100best-merchant-accounts.com/articles/propay-vs-paypal.html
http://www.100best-merchant-accounts.com/articles/google-checkout-vs-paypal.html
http://www.100best-merchant-accounts.com/articles/paypal-vs-2checkout.html

A Must!
Although the number of third party credit card processor has increased over the last couple of years, some of them have been shut down due to the fact that they do not provide very secure services. Regardless of the third party you wish to work with, do a thorough background check. Find out if they are reliable, if they provide good customer support and if they deal with complaints, chargebacks and fraud efficiently.

For further reading:
http://www.thesitewizard.com/archive/creditcards.shtml
http://www.paymentmall.com/bankcard.php?CatID=15&ArtID=17758