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You'll Die Without Credit Cards!
by Mike Banks Valentine
A major issue for small business is finding a reasonably priced
option for an online Merchant Account so that they can accept
credit cards for instant "real-time" approval of
online payments.
Small businesses are finding the routine charges of up to
$150
monthly to be out of line based on their small sales volume.
There are "free" services for this like Yahoo Stores
and Amazon
zShops. Or the pay-per-transaction model used by ccNow.com
which
takes ten percent of each sale. The basic issue is that online
sales are driven by credit cards and if someone is forced
to
print a form and mail a check, then wait for their merchandise,
they are likely to go elsewhere . . . FAST. So this issue
troubles many new online merchants.
Hosting a shopping cart program on a site without the secure
server opens you up to huge liability from your own customers
and it is unlikely that your Merchant Bank will allow it anyway.
This is a major issue for small businesses online and is
frustrating many small operators trying to operate with minor
online sales.
The expenses aren't justified by the income. The major player
in online Merchant accounts is Authorize.net and the application
fee alone is a barrier to most businesses - $450, plus about
$50
monthly in statement fees plus software leases averaging $25
monthly for 4 years!
The same is true of companies like Charge.com that offer Merchant
accounts without the large appplication fee, but don't tell
you
up front about the software lease fees and statement fees
in their
promotional materials.
I have set up CCNow for several clients that offer products
online. They take a flat 10% fee per sale with no other charges
at all and transfer the funds into your bank account after
each
sale is confirmed and shipped. There is that delay and you
lose
the additional 10 percent, but it is difficult to find a better
deal for small business. If your sales are small and your
marketing budget limited, go with the free resources like
Yahoo
stores or Amazon zShops. If your profit margin can sustain
a ten
percent take from the top, go to ccNow.com and if you expect
sales above $1,000 monthly, then it's worth the application
fees and software leases to go with the big boys, AuthorizeNet.
Online merchant accounts proliferate like flies, but this
is too
important to risk the smaller companies and you need the
reliability offered by the major companies I've mentioned
above.
Good luck with your store!
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