Payment Processors

Many of my clients have something they would like to sell online.  That brings up the question of what the best way is to accept payments online.  The way that most larger companies do this is to sign up with a bank for a merchant account.  This allows them to accept Visa and Mastercard payments.  Depending on the bank, it is often possible to also accept American Express and Discover card payments for an additional setup and/or monthly fee.  The monthly fee charged by a bank to accept Visa/MC is generally around $30-$40 per month in addition to per-transaction fees and a percentage of each sale.

The costs involved in this type of setup can be worth it if you are processing at least several thousand dollars in sales per month but if you are just getting started do you really need to pay all of these setup fees and monthly charges?

The good news is that you don’t!  There are multiple payment solutions available that don’t require you to set up a merchant account with a bank in order to accept online payments.  I’ve worked extensively with two of these:

Paypal.comPaypal is a widely used payment solution in the online e-commerce world. Everyone who uses Paypal becomes a member and payments are transferred from one Paypal account to another. Often people will accrue funds in their Paypal accounts and then go shopping looking to spend their Paypal funds. If you accept Paypal then you are more likely to make extra sales from impulse shoppers with Paypal balances. Also Paypal fees are less than 2Checkout (.30 cents per transaction + 2.9% of the total).  Paypal also offers a free debit card that you can use just like a regular bank debit card to access the funds in your Paypal account.  Click here to visit Paypal.com

2Checkout.com is good for a small web business that isn’t doing a lot of business initially. It costs $49 to set up an account and then .45 cents and 5.5% of each transaction. It ends up being cheaper than most merchant accounts unless you are processing a large volume of sales. With 2Checkout’s service you can accept MC/VISA, AMEX, Discover and e-Checks whereas a normal merchant account will only allow MC/VISA. Another added benefit is being able to sell using 2Checkout’s shopping cart and “secure certificate” which saves you at the money you would otherwise have to spend for a shopping cart and/or a secure certificate. Also, it is very easy to be approved for a 2Checkout.com account. There are no waits and detailed credit checks as with so many of the larger banks. Click here to visit 2Checkout.com