Internet Business News for Entrepreneurs

Internet Merchant Accounts - Develop and Online Business you can be Proud of by Mary Ciocci

Consumer spending studies show that more than 90 percent of shoppers who make purchases online use credit cards to do so. What does that mean? If your business still isn’t accepting credit cards for online sales, you’re missing out on some serious cash.

Today’s merchant accounts have lower fees, simpler terms, and a much wider array of options than merchant accounts of a few years ago. In fact, with so many advantages, there’s really no reason why you should delay establishing a merchant account for your Internet business.

If you’re putting off opening an account because you just aren’t sure what types of services are available for online businesses – or what fees they might entail – take a few minutes to review the following list, then get started on your own search to find the merchant account provider that’s ideal for your business’ unique needs.

What is an Internet merchant account?

An Internet merchant account, simply put, is a software program provided by a merchant account provider to allow for the consistent, accurate and successful processing of credit card transactions for your business. Internet merchant accounts come in two types: real-time processing (arguably the more common type) and delayed or deferred processing. The type of account your business needs will depend largely on the amount of daily sales you expect, as well as the amount of interaction you want to have with each transaction.

What happens when a transaction is processed?

As noted, there are two basic types of Internet merchant accounts: real-time processing accounts and delayed processing accounts. In a real-time account, transactions are processed at the time the sale is made, and a virtual receipt is printed on the buyer’s screen, indicating that the sale is final. These transactions are entirely automatic, requiring no human interaction to complete and process sales.

In a delayed processing system, credit card information is entered into your online shopping cart system, just as it is with a real-time system. But instead of processing the information “instantly,” the data is stored until it is later retrieved by a business representative or sales person, who must then manually enter the card information into the store computer, which acts as a virtual terminal.

Only then is the credit card information processed, and receipts issued for transactions which are approved. Because this type of system requires that a person manually enter data for each transaction, it is only an appropriate choice for businesses doing small amounts of sales.

If you expect a low sales volume, you can still choose a real-time system, and eliminate the need for manual re-entry of data. Real-time systems are more costly than delayed processing systems.

What software or equipment is needed?

In addition to an online storefront, you’ll also need to have a shopping cart system that allows customers to enter their personal and credit card information. Real-time systems require you to use a separate service called a gateway provider, which may be provided by your merchant account provider.

The gateway serves as an added measure of protection against fraud, which occurs more frequently in the anonymous environment of online sales. The delayed processing system may require additional software to allow your store terminal to be used as a virtual terminal, and may or may not require a gateway provider.

What fees can I expect?

As with all types of merchant accounts, the fees associated with your Internet merchant account will vary based on the provider. Fees for all types of accounts include transaction-based fees, daily accounting fees, report fees, and monthly activity fees; Internet accounts may have additional software fees or gateway fees. Be sure to ask the merchant account providers you’re considering to provide a complete list of all fees, including penalty fees, before signing any contract.

What do I need to do to open an Internet merchant account?

In addition to a business license and a business bank account, required by all types of merchant accounts, you will also need a website and a shopping cart system to accept sales information.

Can I do business on the road using my laptop?

You can, but then you will need to look into a mobile merchant account, which differs from an Internet merchant account and allows credit cards to be processed from anywhere there is an Internet connection. Some systems also allow for delayed processing, accepting the card information and storing it until an Internet connection is available. Many merchant account providers offer “bundles,” packages including more than one type of service at a reduced cost, so be sure to ask.

Merchant accounts are an important option for all types of businesses, but especially for those operating online. Take some time to review your options today, and you can begin to see increased profits in just a few days.

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