One of the easiest ways of liberating yourself from the many constraints of operating a brick and mortar business is to go on-line and establish a web store. At a click of a mouse you will have managed to get rid of a number of issues that are a source of concern for traditional businesses. No longer do you have to worry about locating a retail store located at a vantage position and think about shelling out expensive lease rentals every month. You also do not need to keep a bevy of sales assistants to man the sales counters or even a large inventory to please every whim and fancy of the walk-in customer. However, one vexing problem remains; accepting payments online from customers.

If you think that you will be able to operate profitably by insisting that customers pay only by cash on delivery or send checks in advance, you would be losing out on the custom of millions of credit card holders who are currently spending billions of dollars in online purchases. To the uninformed, accepting payments on-line might seem to be a very complicated affair, but in fact it can be extremely simple and open the floodgate of sales for you with just a few easy steps.

The Typical Credit Card Customer

There are perhaps just three basic types of customers that shop on-line and pay on-line. The first is the average guy who prefers shopping with his mouse on an online platform to jostling with the crowds and queuing up at the counters and then lugging his purchases back home. The second type of customer is the one that keeps on browsing websites, falls in love with an item that she was never planning to buy and purchases it on an impulse with her credit card. The third type, now rapidly increasing in numbers due to globalization, is the international customer who would like to shop for articles of his fancy from suppliers, irrespective of the country they may be located in. Credit card purchases in international currencies are now as simple and seamless as transacting in domestic currency so that acts as a strong incentive to such transactions. As an on-line business owner you would lose out on all these customers were you not to accept credit card payments.

How to Accept Plastic Money

Basically there are two ways of taking advantage of the prevailing cheap credit card processing rates and accepting payments on-line. The first is through a merchant account set up by a credit card acceptance service provider. You need to approach a payment processor operating merchant accounts and get on board by entering into an agreement with them. The agreement specifies the various rules and regulations governing card acceptance, and the details of the various fees that will be charged for setting up the account, maintaining the account and on a per transaction basis.

Using your merchant ID, you can accept or decline credit card transactions on your website; the process is fully automated with electronic linkages for card verification established by the payment processor. Online business owners also have the option of using payment gateways to accept credit card payments online. Payment gateways are independent third-party merchants that provide the service to you for transaction and other fees.

Deciding On the Best Method of Credit Card Acceptance

Each of the methods of on-line credit card acceptance has its own benefits and drawbacks so it is really up to the on-line business owner to decide for himself. Generally speaking, it can be somewhat more expensive to set up a merchant account than to tie up with a payment gateway. However, over an extended period of time, the total cost of using the payment gateway can be higher. For website owners experimenting with online payments for the first time, it can be worthwhile to engage a payment gateway. After satisfying themselves that business is booming due to on-line payment acceptance, they can go in for a more permanent merchant account arrangement.

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