Accepting credit cards online is very important to any company wanting to successfully sell products and services on the web. At the dawn of online business it was thought that accepting plastic was a bad idea, because it was forcing a real world technology to the Internet. Lots of businesses trialled digital currencies for example “flooz”, but they didn’t achieve critical mass. The truth is, ten years on from the people starting to sell on the web, still using credit card to make online purchases and therefore accepting credit cards when selling goods online is still hugely important.

There are basically two ways to accept credit cards online. Let’s compare merchant accounts. A business can either sign up for a merchant account, which allows them to process credit cards in their own business name, or they can go with a third party solution, who processed the credit card charges on behalf of the company. Getting a merchant account has higher upfront costs, but has lower per sale costs. Using the services of a third party solution costs less initially, but has higher per transaction charges.

The decision as to whether or not to get a full credit card processing account or use a third party service provider is only a question of crunching the numbers. Consider these different business types and compare merchant account benefits…

In most cases, merchants who are actively trading offline and simply want to expand online will most likely be more suited to getting a credit card processing account. Most likely, It’s most likely that they will already have an offline merchant card processing account and will expand the remit of that account to also do “MOTO”, which is “Mail Order Telephone Order” processing and simply means that the card holder isn’t there at the time of purchase.

For small businesses starting to sell products online, it’s important that they consider testing their marketing using a third-party solution. The advantage is that there’s next to no initial cost so they can test their market cheaply and easily. If the market is profitable, they can think about reducing the per-item costs by getting their own credit card processing account. If the market isn’t profitable, they can quickly leave the marketplace without having expended much capital to get their own merchant card processing account.