Shopping Carts, Merchant Accounts, Payment Gateways, Credit Cards
Processing & Third Party Payment Processors in Small Business Ecommerce

A Quick Guide to Third-Party Credit Card Processors

(c) Copyright 2002, Angela Wu

If you've ever looked into getting your own merchant account, you already know how expensive it can be. Application fees, setup fees, standard monthly fees, transaction fees... they all add up fast! It can be too much for a business that's just getting started.

There is an alternative. Third-party credit card processing companies handle your credit card transactions for you in return for a cut of your profits. Setup is typically either free, or there's a small, one-time fee.

Here's here it works: once you've applied and/or been approved and paid any applicable setup fees, you create ordering links for your products. These ordering links lead to the third-party processor's server, where they handle orders on your behalf. Credit cards and online checks are common ordering options provided by third-party processors. Some also offer a telephone ordering option.

After your customer places an order, that sale is automatically credited to you, minus the company's commission. You are paid by the third-party processor at regular intervals, according to their pay schedule.

So what's the big deal? Why would third-party processors appeal to startup businesses? Aside from the setup fee, you are only ever charged IF and WHEN you make a sale. If you don't sell anything, you're not charged anything.

Here are a few things to consider when researching third- party processors:

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eBook Review
The Shopping Cart Report
by Dr. Ralph F. Wilson
213 pages (PDF file 1537k)
$34.95
http://wilsonweb.com/ebooks/carts.htm

eShopping Carts: Comparing Apples, Oranges and Tuna Fish!
or Make a Grocery List Cause You're Gonna Need One!
or All That Food and I'm Still Not Satisfied!
by Mike Banks Valentine

Have you ever bought a book, then plopped down on a pillow on the couch with a cup of coffee and some snacks ready to devour that books' contents, sip some French Roast and munch biscotti? Maybe it's Folgers and Doritos at the computer screen in this case as you open up Adobe Acrobat reader and Dr. Ralph Wilson's ebook "The Shopping Cart Report".

Either way you've gone shopping and when you put that bag of rich, fresh and aromatic French Roast whole-bean coffee in your empty shopping cart, you've put a physical object into another before moving down the bakery isle to the fresh dark-chocolate coated Biscotti and put another physical object into a cart.

Online, both of your products are simply bits and bytes and the shopping cart is complex software hosted on a remote web server somewhere off in cyberspace. So whether you'll be buying that shopping cart software and having it installed on your own web server or simply using an existing cart hosted on some other secure server, you will be using shopping cart software to sell your products or services online.


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Title	Subject
Checking Out with Google's New Checkout Service	AKA Certified by Google and Gbuy
Choosing Shopping Carts	Ecommerce Solutions
Accepting Credit Cards	Online Business Necessity
Merchant Account Basics	Understanding Credit Cards Processing
Merchant Account Glossary of Terms	Credit Card Transaction Definitions
Merchant Account Glossary of Terms 2	Credit Card Transaction Definitions
Merchant Account Glossary of Terms 3	Credit Card Transaction Definitions
Merchant Account Glossary of Terms 4	Credit Card Transaction Definitions
Open Source Shopping Carts	Free OS Commerce OSC
Avoid Merchant Account Chargebacks	Understanding the Issues
Merchant Account Accepting Credit Cards	Frequently Asked Questions
Accepting ACH payments	Online Check Payments
PayPal Vs. Standard Merchant Account	Credit Card Terminals
New PayPal Checkout	Makes Payments Easier!
Small Business Must Accept Credit Cards!	The Web Requires Instant Buying
Third Party Payment Processors	More Options For Small Business
Shopping Cart Report, an Ebook Review	Comparing Apples Organges and Tuna Fish

We Encourage Links to Our Open Source Ecommerce Article
If you would like to link to this page from your web site or blog, please feel free to use the HTML code provided in the text window to the right.	Read a valuable <a href="http://website101.com/shopping_ecommerce/open-source-ecommerce.html"> Open Source Ecommerce Shopping Cart & Free Merchant Account</a> review at Web Site101 Small Business Ecommerce Tutorial.

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.


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