How to Accept Money Online
 Not every new business can open a merchant account to accept credit card payments. New businesses with no or little financial history often get denied by banks and independent vendors.
A merchant account is viewed the same as a loan request. There are certain minimum financial requirements that must be met to get approval and they can be difficult for start-up businesses to meet.
But even if you are unable to open a merchant account, there are a number of ways to accept money online without a merchant account.
You can even accept credit card payments without a merchant account thanks to third party service providers. These are businesses that operate as a merchant account and will accept payments for you in the form of electronic checks and/or credit card payments.
A customer agrees to pay a particular price for your products or services and processes payment by selecting one of the payment options you offer. A third party merchant deducts transaction fees and the balance is deposited into your bank account.
First Class Service from Third Party Providers
Every country you do business in will have different rules and regulations controlling merchant accounts. One of the benefits of using an established third party credit card merchant is they are licensed and regulated. Also some are able to handle multiple currencies.
Other benefits include the following:
- Some merchants offer bundled services that include shopping cart technology
- Most can process a variety of credit card payments
- All provide real time verification and processing of credit card payments
- Set up costs are affordable for new businesses
- Will add authenticity to your website because they are well established businesses with names people recognize (such as PayPal)
As the following sections will review, there are a number of third party credit card merchants to choose among. The features to review include the following.
- Amount of setup fees charged
- Transaction fees per sale
- Reserve requirements to cover potential losses through fraud or chargebacks
- Types of payments accepted
- Types of products or services allowed to be sold
- Third party merchant policies and procedures limiting your business choices in areas of pricing, returns etc.
- Ease of integration with your business website
- Global capabilities
Before describing the most used third party vendors it is important to understand the shopping cart concept.
Virtual Shopping Carts
 You can’t push a rolling shopping cart over the internet but the new software enables shoppers to enjoy a similar experience in the virtual world. Online shopping cart technology lets a business create a website that makes it easy for customers to:
- Browse products and services
- Add products to a running list
- Pay for the purchases
- Get an order confirmation at the end of the process.
You can integrate the shopping cart system into the business website to enhance the shopping experience. Companies like PayPal offer everything from enabling the customer to set up an account to automatic order confirmation emails. You subscribe to the service of choice and then get HMTL codes to add to your web pages.
An essential benefit of shopping cart systems is the fact that payment processing is simplified. In addition, new businesses can offer customers many of the same payment options, such as credit cards or e-checks, which much larger companies provide. Your new business can be competitive in ways that would not be affordable otherwise.
Following is a review of the most popular third party credit card merchants offering new businesses a way to manage the payment process on business websites.
PayPal (www.paypal.com)
By far one of the most popular third party merchants is PayPal. A customer can set up a PayPal account and pay you directly using their PayPal funds. You have to be setup to accept PayPal payments of course. Money is deposited into your PayPal account which can then be transferred to your bank account. These are called EFT or Electronic Funds Transfer payments.
But PayPal offers a number of options for business accounts.
- Credit card payments including Visa, Mastercard, American Express, and Discover
- PayPal private credit card payment
- Electronic funds transfers
- Shopping cart
- Right to sell both physical goods and services
- Ability to handle multi-currency for global selling
- No set-up fees
- No monthly minimums
- Reasonable transaction fees
- Accepts accounts globally (US and non-US)
2Checkout.com (www.2checkout.com)
The company 2Checkout.com offers turnkey e-commerce to both US and non-US businesses. It offers much more that just credit card payment options because it also supports a number of business functions ranging from financial reporting to sales tracking.
With the simple and easy placement of provided codes on your websites, customers will be able to order and pay for their goods or services using one of several payment options. In addition, the functions you choose to use can be integrated into existing shopping carts.
- Credit card payments including Visa, Mastercard, American Express, and Discover
- Checks by phone (ACH deposits)
- Electronic Funds Transfers
- Shopping cart
- Right to sell both physical goods and services
- Single currency only in US dollars
- Small set up fee
- No monthly minimum activity requirements
- Reasonable transaction fees
- Accepts accounts globally (US and non-US)
Clickbank (www.clickbank.com)
Clickbank does not provide comprehensive service like PayPal and 2Checkout. But if your business needs can met by Clickbank, the company offers credit cards, e-checks and checks by phone payment options without a merchant account.
Clickbank was created to assist digital product vendors and businesses wishing to set up an Affiliate program. The main drawback to this company is the fact it does not accommodate payments for tangible goods.
- Credit card payments for intangible products only including Visa, Mastercard, American Express, Discover, Novus and Eurocard
- Checks by phone (ACH deposits)
- Only intangible products can be sold
- Single currency only in US dollars
- Small set up fee
- No monthly minimum activity requirements
- Reasonable transaction fees
- Accepts accounts globally (US and non-US)
CCNOW (www.ccnow.com)
CCNow offers credit card payment options to businesses selling only physical goods. There is a fairly high per transaction fee (9% as of July 2009), but there are no monthly fees. The company offers an integrated shopping cart program which can help you increase sales.
At any point you decide to establish a merchant account, CCNow offers that service also. When a sale is made, you are notified by email making it easy to know when to ship products.
- Credit card payments including Visa, Mastercard, American Express, Discover, Novus and Eurocard
- Shopping cart
- Right to sell physical goods only
- Handles single currency only – US dollars
- No set-up fees
- No monthly minimums
- Higher transaction fees than some other similar companies
- Accepts accounts globally (US and non-US)
iBill (www.ibill.net)
The company named iBill serves businesses selling intangible products. Devoted to assisting service providing businesses charging between $2.95 and $100 for service units, iBill is a good choice for small start-ups.
Your web pages are uploaded to the iBill server instead of you placing code on your web pages. It is so very simple to get started and that is another attractive feature for start-ups.
- Credit card payments including Visa, Mastercard, and American Express
- Online orders only
- Selling intangible (services) only
- Handles single currency only – US dollars
- No set-up fees
- Small monthly minimum
- Higher transaction fees than some other similar companies
- Accepts accounts globally (US and non-US
Other Companies and Options
The five companies listed give you a good idea of the types of services available for new and/or small businesses. There are many more than these five. It is important to shop around and compare the various fees and services that are provided.
Electronic Checks
There are also companies specializing in just electronic checks. Electronic check processing is called ACH processing. Money is taken out of the customer’s bank account as if they had manually written a check. But this is paperless check processing that is accomplished using the bank’s routing number and the customer’s checking account number.
The businesses offering electronic check processing include the ones described earlier and the following.
- Banks (talk to your local bank to find out what business services are offered)
- Pay By Check
- IChex
Electronic World of Online Payments
If you have tried to establish a merchant account and have been unsuccessful, then it’s time to try a new way. The same is true if you are already fairly certain you will not be accepted.
The best thing to do is take advantage of third party credit card and electronic check service providers. The more payment options you offer potential customers, the more likely a sale will be completed. T
The third party service providers let you offer convenient payment options for your online start up business. This means you are better able to compete in the marketplace even against businesses much larger.
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