Accept Credit Cards Like the Big Boys… Without the Cost
You want to start an online business selling products you import, make, and refurbish, whatever… The key word here is online. You can’t accept cash online, you can’t take a paper check or swipe a debit card at your register. You have to have a way for your web site visitors to purchase what you’re selling or you aren’t going to go very far or be very profitable.
With that in mind, you have two options. You can do what the big boys do, or can find another way. Now the big boys use their banking agent or a large credit firm to handle their transactions online. They pay for a security certificate ($200 a year – roughly), a merchant account (averaging $35 -$56 a month), a business checking account ($12 - $45 a month if below minimum), and then processing and transaction fees) Now if you are selling $100,000 or more in product a month, then the rates go way down and you won’t have a month account charge to deal with. But I’m talking to the SMB here.
So what is the other way? What would help you is a company that does everything for you for a much lower rate, right? Well that is what has happened over the past several years. There are companies out their that use a shared security certificate and merchant system to allow multiple clients to process credit card, debit card and e-check payments online. This considerably reduces your processing charges. Most hold you funds like a bank an allow you to pull funds via check, debit or credit cards. Some are for a broad range of service or product resellers, some cover the United States only while others are world wide, and others cater to a niche market such as software or digital media sales.
The following are a selection of third party merchants that specialize in the SMB market. Rates very, so I would suggest you do your own research.
2checkout.com
2checkout is one of the larger agencies online with over 57 million in sales for 2007 as of this post. There is a $49 one time signup fee and they charge 5.5%+0.45 per transaction.
ClickBank.net
ClickBank charges a one-time $49.95 activation charge that must be paid upon approval of your product. ClickBank purchases product from publishers at a wholesale price equal to 92.5% of retail, less a $1 stocking charge. This is only for people who sell digital products or services. They decide you retail value. Not you. And they sell it, not you. This company seems to be very popular as I here talk about them all the time, but I certain question their right to tell you what your product is worth. But then this is why I say that you should do your own research.
WorldPay.com
WorldPay enables thousands of businesses in most countries to accept payments on the internet, by phone, fax or mail. Credit and debit cards, bank transfers, installments - even mobile payments. They have a one time set-up fee, monthly charges and commission sales fees; but they wont give you anything online. You have to request a quote.
Kagi.com
There are no setup or monthly fees with this merchant. Kagi charges 2.5% + a flat rate of 0.15 to 5.00 depending on retail price. Then they also charge for payment type (CC, PayPal, e-check) from 2.1% to 4.9% + .30 per transaction. They also offer hosting. There is a catch though. When you set-up a Kagi store, kagi becomes an affiliate and takes an EXTRA 10% of your profit every time something is purchased through their network.
PayPal.com
For any account there is a 1.9% to 2.9% + .30 process charge. No set-up, no monthly, no commitment, and no special software is required. PayPal has come a long way since it started. The biggest issue with PayPal in the past was that they required your purchasers to have an account to purchase. But no more. I have used PayPal for quite a long time and have never had a problem with them. I would recommend them to any SMB that is starting out.
ProPay.com
What was once a competitor for PayPal, ProPay.com charges a large annual fee and higher % rates for the same services as PayPal. Not a great option if you ask me.
RegNow.com
Designed for software vendors. Standard rate of 6.9% +$1.
Verza.com
Global payment system. They start with a $349 setup, $7.50 a week for processing services, then 6.5% to 13% + 1.95 per transaction.
Merchantplus.com
Free gateway and virtual terminal. $19.95 a month, 2.15% +0.25 per transaction. This company covers everything from virtual to physical merchant processing systems; even wireless merchant processing systems.
Another thing to consider is the way you present you offerings. If you have more than 10-20 products, I strongly recommend a shopping cart. You can find several shopping carts that link to many of these third party systems. I will cover some of the better ones in a later article.
