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Third Party Merchant Account - Benefits and Risks

2004-08-25
 

Cost of Merchant Accounts An online merchant account will boost your online sales, but merchant accounts are expensive. 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 such as ecommerce web hosting. Other costs include gateway fee, statement fee, annual fee, transaction fees and discount rate fees.

Third Party Merchant Accounts - Accept Credit Card without a Merchant Account There are basically three different procedures to get an online merchant account - apply to a bank, use services of a broker or intermediary or take the services of third party. When you first start an online business and have limited resources, your have the choice to use the services of a credit card processor or a third party merchant account. In third party vendor system, you use the account ID of another company. You can enjoy the benefits of processing credit card transactions online without the high costs of a merchant account. 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.

Disadvantages of Third Party Merchant Accounts It is easy to set up an third party merchant account with minimum cost. Many service providers allow you to accept credit cards online within minutes. The major concern is the privacy. You have to depend on other party for your businesses and share your information with them. A third party merchant account is usually a stepstone at the early stage of e-business adventures. As you business grows and expands, you will soon need your own merchant account.



Related Topics
Online Credit Card Processing - How It Works
Online Merchant Account - Basics, Costs and Alternatives
Merchant Account Requirements - Bank Account, Business Registration and Phone Number
Free Merchant Accounts
How To Accept Credit Cards Without a Merchant Account

 

 
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