Low Budget E-Commerce using Pay Pal vs A Merchant Account with Online Credit Card Processing
The least expensive way to accept credit cards on your web site is Pay Pal. There services are very inexpensive and permit you to "test the water" before committing a considerable amount of money to establish a Merchant Account and Internet Credit Card Processor of your own.
" With PayPal, you can start accepting online credit card payments instantly. In addition, PayPal offers a full suite of tools to keep your payment processing running smoothly, so you can focus your energy elsewhere."
Pay Pal works with all of our Discount Web Hosting packages, so you can start your own online store for under $6 per month. Pay Pal can be used for just about anything, such as,
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Buy Now Buttons
- PayPal Shopping Cart
- Subscriptions and Recurring Payments
- Donations
Pay Pal provides a variety of Merchant Tools to meet your needs and the lowest possible cost to you when you are starting out.
Click here to learn more.
If you are confident that your online business will earn roughly $700.00 to $1000.00 US per month, then it may be less expensive to open your own Merchant Account with an Online Credit Card Processor. A Merchant Account permits you to accept credit cards. An Online Credit Card Processor permits you to accept them online, meaning on the Internet with real time Authorization and Capture. These are two different services and are typically charged separately, though some companies may bundle the services as one.
There are several overhead costs to having a merchant account. The fist is the setup fee. Setup fees depend on your the bank you choose and what services you require, such as Visa, Mastercard, Discover, E-Check and American Express. Each one may have it's own setup fee.
Second, once you have a merchant account, the cost depends on what you sell, or don't sell. Most merchant accounts have a minimum fee, gateway fee and a discount percentage rate that may vary for different types of transactions and different types of credit cards. Some may also have a flat fee per transaction. The minimum fee is paid even if you don't sell anything in a given month. This can range from $30 and up. The gateway fee is usually another $10 in addition to the minimum fee. Transaction fees can be from $0.00 to $0.75 and can add up to quite a bit of money if you make a lot of transactions.
The discount fee is based on a percentage of sales. It can be anywhere from 2.5% and up. If you are selling products with a high retail price, this is the percentage you will pay to the Merchant Bank to make that sale.
You can have a merchant account and not be able to accept credit cards online. There are different types of accounts and the account you choose must be appropriate for online sales. In-store sales where the credit card and it's owner are present to sign the receipt, typically have a lower discount fee than online credit card transactions.
To accept credit cards online with real-time Authorization and Capture requires a Credit Care Processor or CCP. There are many CCP's to choose from, Authorize Net, Verisign, Link Point and others. Their services work with your own merchant account to conduct transactions online and process the payment through your merchant account to your Business Checking Account. (You must have a Business Checking Account before you can have a merchant account.)
Online CCP's also charge a setup fee plus a flat fee for service and a small fee per transaction. Setup fees are anywhere from $150 and up. The service fee can range from $15 per month and up, depending on the provider and the number of transactions each month.
If you need a Merchant Account with Online Credit Card Processing there are many choices but first, Contact your bank - If you don't have a Business Checking Account you will need that first. Your bank can quote their own rates to offer you the Merchant Account and CCP services you require. Be sure to check with them first but also compare them to Merchant Account Express.
If you have not sold anything online yet, then start with Pay Pal. Once your business has been established and sales are abundant, then switch to your own Merchant Account and Online Credit Card Processor when it is affordable to do so.
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