Merchants Accounts - Payment Gateways - Third Party Processors
If you wish to sell products or services online you will probably at some point need a merchant account. With a merchants account you can accept and process credit card payments. Most banks supply merchants accounts but they are quite stringent about what businesses they will accept. If you are a new company or have a poor credit history you might have trouble setting up a merchant account with your bank. To accept credit card payments online most banks require you to have a special merchants account called an online merchants account, or internet merchants account.
Payment Gateway Accounts
As well as a merchants account you will need some way for the credit card details to be processed. Payment Gateways are also called a Payment Service Provider (PSP). Payment Gateways provide the secure link between your site and the bank to ensure that your customers' card details are kept secure throughout the transaction process. When using a payment gateway the customer leaves your web site and is passed to a secure area of the gateways site while they
enter their credit card details. Some payment gateways charge a flat fee while
others charge a percentage of each transaction.
If you have a merchants account, an alternative to using a payment
gateway is to process your own cards offline. To do this your web site
must be made secure and a SSL Digital certificate is used to encrypt
the information that is passed through your site. You can then process
the credit card details in your normal way e.g. using
a credit card terminal.
Third Party Processors
An alternative to the Merchant account/Payment Gateway process
is to use a special all in one Third party Processor. These companies
have been set up specifically for internet merchant accounts and offer
a full service in one. They are also far easier to get than your standard
merchant accounts and a lot easier to set up. With a Third party
processor you can be accepting credit card payments within a
couple of days. The downside of these types of accounts
is that their fees are much higher than the standard
Merchant accounts, and you cannot instantly access
your money, but for new businesses with no credit
record they do offer an alternative route.