Are you planning on selling “things” online?  Maybe you have already used payment services like PayPal to do this.  But lets get real!  Paypal is good for the small stuff, but it has its problems:

1)  High fees
2)  Buyers must have Paypal accounts
3)  Strict processing rules
4)  Lack of professional appeal on your website

Get your own merchant account!

Getting a merchant account for your website is much like getting a new bank account.  You fill out some forms, you choose a few options and you get approved.  Sure, this may take a few weeks to finalize, but the process is rather simple and almost any customer service rep will happily walk you through the steps.

But beware!

Or at least, AWARE!

Getting your account is one thing, but UNDERSTANDING your account is another.  First, understand that the business of merchanting involves a bank accepting a transaction payment for you and then funnelling this payment back into your account.  It seems simple and safe, but remember this can go the other way, too.

Refunds and even worse, chargebacks, result in money coming from you, back to the bank and into the customers hands.

Now refunds are still relatively safe because YOU process them.  It is your discretion to process a refund and (hopefully) you have the funds available in your account to do so.

Chargebacks are the real problem.  These are payments that are given back from the merchant to the customer.  These customers go straight to the credit card companies and complain that a charge is false, fraudulent, unknown, etc.  These chargebacks risk resides because the credit card companies will “take” this money from your merchant (and hopefully you have the funds to pay back your merchant).

Because of this, merchants have to be very wary of their partnership with you.  They will likely impose a monthly processing limit.  They may even impose a “reserve”, where they will hold a percentage of your sales earnings as collateral.  These are things you need to know!

Of course, as you prove yourself to your merchant, these limits can easily rise while the reserves should ultimately go to zero.  But breaking these rules (as well as having a large number of chargeback customers) can result in immediate deactivation of your merchant account (DISASTER!).

And yes, you’ll get chargebacks time-to-time.  Depending on how you set up your account, you may challenge these chargebacks if they are legitimate.

But at the end, your merchant should be your friend.  Know them.  Communicate with them.  And understand their business (as well as your account!).  A merchant account can really help your business grow, but neglecting the fine print can result in online business ruin.

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SUGGESTED MERCHANT ACCOUNT SERVICES:

Powerpay - They are perhaps one of the most well-known and respected credit card processing companies in the business.  Many of the “internet gurus” use Powerpay exclusively.  They seem to be quite flexible with adapting to your sales volume while providing competative rates in the business.  I personally have not used them, but many of my internet friends swear by them.  Learn More about Powerpay…

e-OnlineData - I found these guys through my hosting company for NetWebVideo (Pair Networks) and for the year that I have used them, I have had no issues at all.  They are associated with Authorize.net (perhaps the most known gateway system out there) and they have always been very good about answering my questions and providing other customer service requests.  Again, very low rates.  Learn More about e-OnlineData…