Accepting Credit Cards Without a Merchant Account

When it comes to credit card processing for your business, one of the things that you’re likely to wonder about - especially when you only do business online - is whether you really need to have a merchant account. There are merchant account alternatives available, after all, and some business owners find that these services are adequate for their needs.

PayPal is likely the most common merchant account alternative for those who want to be able to accept credit card payments online - especially when the business that they are doing is primarily on the auction site eBay. In addition to providing credit card processing services to eBay sellers, PayPal offers a standard payment option, a pro web site payment option, express checkout services and even email services. It’s possible for merchants to offer refunds, to accept payments in multiple currencies and to balance their books by exporting to Quickbooks and similar accounting software. However, before you decide whether or not PayPal is the right service for you, be sure that:

• You understand the different charges associated with each payment type and processing plan.
• You are looking at the way other merchants have felt about using PayPal to process credit card payments.
• You are comparing PayPal merchant services with those provided by others.
• PayPal services are compatible with the shopping cart system that you are using on your web site.

Because of the success that PayPal has seen, others are getting in on the action of offering merchant account alternatives. For those online merchants who use Google’s AdWords to advertise their online business, Google Checkout enables merchants to process payments on their web sites. For those whose sales are no more than 10 times the amount that they are spending on an AdWords campaign, credit card processing with Google Checkout is free. For those who do more business as well as those who are looking for a merchant account alternative who do not advertise with AdWords, the cost of processing credit card transactions with Google Checkout are a flat 2% plus $0.20 US per transaction.

Ultimately, what many small businesses discover initially is that merchant account alternatives are a good way to get started with accepting credit card payments; however, many find that as time goes on, these merchant account alternatives end up having higher costs:

• Some merchant account alternatives like Clickbank.com and PaySystems.com charge nearly $50 US simply to set up an account.
• Some merchant account alternatives for credit card processing charage up to $1.00 US per transaction in addition to up to 8% of the dollar amount of the transaction.
• Some merchant account alternatives take the buyer away from the merchant’s web site in order to process the transaction and this can be a deterrent to those who are looking to make a purchase.

Before choosing a merchant account alternative for your business simply because it seems “easier” than going through the application process for a merchant account, be sure to research your options and the true cost of each.