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Merchant account; how to pick one

At some point your business will need a merchant account though our experience has shown that you may not need a merchant account:

  1. If your sales are still small
  2. You do not like the hassle of having a merchant account
  3. You do not mind paying slightly higher commission
We started off with Paypal and it worked fine for us. In fact, many of our customers liked Paypal since it allowed them to pay either with a credit card or a bank account. Many customers outside the United States could only pay us through a Paypal account since their credit cards did not work for overseas transactions. We are so pleased with Paypal that we continue to have an account that we use to collect payments for goods that we sell, mostly e-books, some personal care products, and exercise yoga videos. We don't have to deal with a lot of the hassles of providing secure online shopping and making sure that no one hacks into our servers and steals valuable information.



Why having a merchant account is good?

  1. You pay lower commissions/charges for each transaction. If you have large business, these charges can quickly add up. How large is large? Well, you will need to do the math for your situation. Do some research and see paying what amount is acceptable for you as commissions and then pick the best option.
  2. It looks more professional. While Paypal is very well regarded and is used by almost everyone on eBay, a Paypal account still gives the impression of your business being small. On the other hand, when you have your own customized shopping cart and visitors are shopping on your website, it is good for your brand image.
  3. You have more control over transactions. You can refund more easily and charge extra if the customer decides to add more goods later (without asking the customer to go back to the website).
  4. You can accept orders through mail and over the phone when customers provide you with their credit card number and other supporting information.

How to pick a merchant account provider?

  • Study the fee structure carefully. Do the math to see what is the level of business you have and how much you will end up paying. Yahoo Small Business Merchant Solutions seems to have a very reasonable program if you are a small business.
  • Ask about their customer service and make a phone call to assess the level of service. If they do not have 24/7 service, you might want to think again. Your ebusiness should be live 24/7 and if you have any problems you should be able to pick up the phone and get instant service. We believe that 24x7 service is worth the extra expense.
  • Ask for the level that makes sense for your business and confirm if you can upgrade as you build your business later. There is no need to sign up for premium programs (even if they offer a bigger discount) if that is what you don't need.