E-Commerce: 8 Reasons Why Third Party Processors Are Better Than Merchant Accounts

Summary : Choosing the right payment processor to accept credit cards for your E-business is a difficult and time consuming task. Like bank accounts or mortgages, there are just so many options

Choosing the right merchant services to accept credit cards for your E-Business is a difficult and time consuming task. Like bank accounts or mortgages, there are just so many options, you need to take an honest look at your own circumstances and desires for the future of your E-business before you make a firm decision.

We can generally separate payment processing into either third party processors, where you use another company’s processing account, or a full blown merchant account of your own. There are pros and cons of both options and making the simple decision of which to look at should be your absolute first decision when looking for a processing account.

To help you, then, here are my top eight reasons why third party processors may be the perfect option...

1. Cheap Set Up

   Whilst some merchant accounts will set you up for free, they are very much in the minority. A fee of several hundred dollars is commonplace in the industry, while you can set up a quality third party processing account for next to nothing.

    

2. Easy To Set Up

   With merchant accounts, the application process usually involves *lots* of paperwork - and I mean potentially dozens of pages, audited accounts, bank statements, proof of identification and all sorts of other things. On the other hand, getting a third party processing account involves little or no paperwork at all - making your life a lot easier.

    

3. Quick Set Up

   Since there is not the paperwork and checks involved in a third party account that you find in merchant accounts, it can also be a lot quicker to set up. There are several companies that literally allow an E-business to accept credit cards on the same day of application.

    

4. Low Entry Requirements

   If you choose the right third party account, you need to give only minimal information about yourself - and you’re virtually guaranteed an account.

    

5. International Acceptance

   While it differs from provider to provider, many of these accounts are available no matter where you live. Canada? No problem! UK - come on in! Australia - pleased to meet you. Europe? Just sign here please.

    

6. Easy Integration With Your Site

   One comment often levelled at merchant account providers is how complicated some find integrating their E-business site with the payment gateway. Many third party processors have "wizards" that automatically generate a secure order form after you provide the basic details of your products. You just link to that form and you’re away. It couldn’t be much easier.

    

7. No Monthly Fees

   One additional factor to consider is that merchant accounts often charge a monthly fee. They may charge a statement fee, they may charge you to use their payment gateway, or secure server - or just to keep your account open.

    

   Unfortunately, it can be quite difficult for the Internet newbie to make any more than a handful of sales at the start. Sure, with dedication and hard work this can soon increase - but if you’re paying for your webhosting, broadband, autoresponder etc. each month, these fees can soon add up.

    

8. No Monthly Minimums
    

   This is even more important. You see, most merchant accounts also have a minimum monthly value you must process. If you fail to meet it, you either get charged an additional fee, or your account can be shut down.

    

   When I first started out as an E-business, I was making one sale every two to three weeks - for a total value of about $10. Now, as I learned how to market my site, sales picked up rapidly, but if I had to meet monthly minimums, my E-business could have died before it even got started.

About the author : Eric Graham is the owner and CEO of several successful online and offline businesses. Recognized as one of the top authorities on eCommerce and Internet Marketing, Eric is a sought after speaker and consultant.