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Once you have decided which products you plan to sell on the
Internet, and what type of online store you will use in
in order to display your products, next vital decision you have
to take is to understand how your customers are going to pay you.
Whatever you plan to sell online, accept credit cards
surgery is required! 90% of all online sales
occur through credit card payments.

There are two ways to add eCommerce functionality to your

1. Have your own merchant account

2. Use of third-party processors

What is a merchant account?

A merchant account is a special type of bank account where funds
receipts from credit card transactions are first routed to the
special account and are held there before being handed over to your
business account. As an online merchant, you will need an account
called “cardless merchant account”.

Having the merchant account is, in fact, the first step in
online credit card processing. You will also need payment
bridge. A payment gateway is a service provided by billing
processor that enables real-time authorization of
transactions. The payment gateway you choose to work with must
be compatible with your basket. Three Superior Payment Gateways
providers are AuthorizeNet (,
Verisign ( and USAePay
( All payment gateway providers have
their own market solutions. Most banks today work with
partner payment gateway providers and are fully capable of
furnish with a market solution.

If you’ve just started an online business and don’t think
that your sales will generate over a thousand dollars per
months, you’ll be better off with a third-party processor.
However, once your sales reach a few thousand, you will save
bundle by switching to a merchant account.


With 72 million accounts worldwide and a payment volume that is
growing at a rate of 44 percent each year, PayPal is by far the
most popular third-party processor on the Internet.

PayPal is a simple and affordable payment solution for those
online merchants who cannot or do not want to go through
the complex process of setting up a merchant bank account.

Currently, PayPal offers four unique solutions for merchants.

PayPal Website Payments Standard: this solution allows you to
accept credit cards on your website. However, the transaction is
processed on PayPal’s secure server. The customer can choose to
pay either by credit card or PayPal. If you don’t have groceries
cart at the moment you can get one from PayPal; or you can integrate
PayPal solution to your existing cart.

Cost: No monthly fees. No setup fees. No cancellation fees.
Transaction fees are 1.9% to 2.9% + US$0.30.

PayPal Website Payments Pro: This solution is practically the same as
have your own merchant account. If a customer pays by credit note
card, PayPal functions as a payment gateway for you. The consumer
does not leave your website at any time if it pays you by a
credit card.

Cost: US$20.00 monthly fee. No setup fees. No cancellation
costs. Transaction fees are 2.2% to 2.9% + US$0.30.

Payments by e-mail PayPal: it is the payment system that PayPal launched
with. You send the invoice to your customers by e-mail and you are paid on

Cost: No monthly fees. No setup fees. No cancellation fees.
Transaction fees are 1.9% to 2.9% + US$0.30.

PayPal as an additional payment option: if you already have a
merchant account and you want to add PayPal to your
existing payment solutions, you can use this option.

If you plan to sell products through eBay, you
should have PayPal option. According to eBay, three out of four
eBay customers choose to pay by PayPal.

When using PayPal as a primary processor, ensure that you
have at least one other alternative payment solution at hand. the
the reason is that many disgruntled former PayPal users claim that
PayPal can freeze your account at any time without any apparent
reason. Read for more information.

However, according to a new report, merchant losses due to online fraud
PayPal is now only 0.17% of revenue, compared to 1.8% for the Web
merchants who accept credit cards through merchant accounts.
This gives one more reason to use PayPal.


If you are having trouble getting a merchant account due to the
factor that you are not located in the United States, WorldPay could be the
solution for you. WorldPay is a unique solution for your
merchant account, payment gateway and storefront. payment
the option comes with fraud protection and risk management
apps to protect your business. Based in England,
WorldPay is a division of Royal Bank of Scotland.

Cost: If you compare with PayPal, WorldPay’s fees are quite
rigid. $50 monthly fee. $400 setup fee. Transaction fees
are 3.25% + $0.40. The multicurrency processing fee is
5.25% per transaction.

2Order operates as an online fulfillment center. When
customer buys a product on your website via 2checkout, you
make your sale at 2checkout for immediate resale to your
customer. Customers are billed by 2checkout, not you. 2payment
accepts suppliers from virtually anywhere in the world. You can also
set up recurring billing via 2checkout.

Cost: No monthly fees. $49 setup fee. Transaction fees:
5.5% + $0.30.


For the sale of e-books, reports and other similar digital products, is probably your best option. The great thing about
ClickBank has over 100,000 affiliates promoting
products available on the ClickBank Marketplace. By registering your
product with ClickBank, you automatically tap into a huge
potential market. ClickBank accepts all major credit cards and

Cost: US$50 setup fee. Depending on the percentage of
commission you pay to your affiliates, transaction fees vary
from 2.5% plus US$0.33 to 7.5% plus US$1.

There are many other third party processors available
on the Internet. Two of them worth mentioning are and

As fees vary widely from solution to solution
depending on your location, products and other needs, be sure
do thorough research before signing up with any of the
mentioned suppliers.

By Nowshade Kabir

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