Accepting credit cards online is an important part for any online business. Various merchant account services offers this service at affordable rate with advanced features like fraud protection, chargeback protection, recurring billing and much more. Here are few popular credit card processing companies reviewed.
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|Product Name||2Checkout||Authorize.Net||Beanstream||CDG Commerce||Charge.com||Braintree||CCNow||CCBill|
|Merchant Account Features|
|Setup Time||1 Day||2 days||Varies||1 Day||1 Day||Instant||1 Day||1 Day|
For freelancers, contractors and early stage startups, Paypal is usually sufficient for processing transactions such as Visa, Mastercard, Discover and Amex. However, the problems many people usually run into with PayPal is that when the volume of orders suddenly leap up (for instance just when a new successful product launch happens), PayPal is known to suddenly freeze the whole account because of the increased transactions being processed. It also require an account with credit card verification and not everyone is comfortable with that. While for several sellers, its painful only because it is not offered in every country.
For a new business, this action can completely destroy a launch, with prospective customers unable to pay by credit and debit card, becoming frustrated and cancelling their first order and never to return. Meanwhile, PayPal is often difficult to reach during such a trying time and takes no financial responsibility for the loss of income they have caused. It with this knowledge in mind, that many small businesses pre-empt such possible issues by considering opening up a merchant account instead where, they hope, a more business friendly approach to transaction processing exists.
A merchant account allows a business to accept payments via various credit or debit cards. The merchant account provider actually in turn has their own agreement with a card processor such as Authorize.net and with an acquiring bank that often provides the line of credit that allows the merchant account provider to continue operating.
Merchant account providers exist because quite often major card processors do no wish to deal with small businesses directly, preferring to hand that responsibility off to merchant account providers instead.
Different merchant account providers each have their own restrictions for how their merchant accounts may be used. Usually they will have what they determine to be an acceptable level of chargebacks (which usually carry fees), before an account will come under review. If a provider starts sending through too many transactions to the card processor that get charged back, then their own account may come into jeopardy, so they have to be careful what types of transactions are accepted.
Some providers are U.S. based and will only deal with U.S. businesses, whilst others are happy to open merchant accounts for international businesses.
It's also true that some long established providers are focused more on retail card processing, offering support for card-present transactions in-store and wireless card machines for use at Event Expos and other similar locations. However, there are also providers that are more focused on internet-based business transactions.
It is useful to also be aware that physical goods and a limited acceptable list of digital goods may only be permitted by some merchant account providers, whereas others such as 2Checkout are far more forward thinking. Therefore, it is wise to consider what types of goods you can and cannot charge for through a provider's payment gateway before you sign up.
There is often a choice of more than one API payment gateway. These are facilities that can be wired into a customer's website or originating at the provider's web site, which allow for taking the card holder information to process the transaction in real-time. Sometimes the provider will offer their own payment gateway whereas other times they will offer another company's gateway such as Authorize.Net. Different gateways carry different transactions fees and chargeback fees, so it is good idea to compare costs first.
Some providers will charge a sign up fee, a setup fee, as well as a monthly service fee and mid-level per transaction costs too. Other providers may go for a simpler fee structure by skipping the startup costs, but charging higher individual fees per transaction. A business owner or key decision maker will need to determine which charging structure and merchant account provider makes sense for their business given their current and perhaps future volume/value of transactions.