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Online Merchant Account - Basics, Costs and Alternatives


Merchant Account A Merchant Account is a commercial bank account established by a merchant to receive payment via credit cards. Three parts are required to accept credit cards. Besides a merchant account, you need a local bank checking account to deposit funds and a Processing Solution, such a terminal or web-based store front to take credit card payment. Online merchant account, or Internet merchant account or ecommerce merchant account, is a merchant account that can take credit orders on the Web or on the Internet.

Cost of Merchant Account An online merchant account will boost your online sales, but merchant account incurs various types of cost. A merchant account usually requires a one-time Setup Fee between $50 - $100. Some merchant account providers waive the setup fee in promotion period or in conjunction with other services. Other costs include gateway fee, statement fee, annual fee, transaction fees and discount rate fees. See How To Find the Best Merchant Account For Your Business for examples and details in fee calculation.

Accept Credit Card without Merchant Account When you first start an online business and have limited resources, your alternative would be to use the services of a credit card processor. You can enjoy the benefits of processing credit card transactions online without the requirements of a merchant account and high costs involved. Paypal, WorldPay, PaySystems and Clickbank are some of popular credit processing services. Popular shopping carts or online storefronts, such as eBay Store, Yahoo! Store and Microsoft bCentral, offer built-in credit card processing capability.

Related Topics
Choosing Online Payment Options
Online Credit Card Processing - How It Works
Merchant Account Requirements - Bank Account, Business Registration and Phone Number
Third Party Merchant Account - Benefits and Risks


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