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The
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Welcome
to Excelpoint: The
net's #1 internet marketing ebooks. "eBook" is short for
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you’ll find a selection of highly recommended online ebook
best-sellers. They are all available for instant download to your
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These ebooks were written by some of the most
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Getting started guides
What Are Merchant Accounts and Why Should You Want One?
Scenario
You've decided to get yourself into
business on the Web, or you're an established company who wants to
sell goods and services on-line. While browsing around your favorite
sites, you've noticed a plethora of adverts which grab your
attention. "Take Credit Cards Now", they scream, "0%
Commission!".
Fighting your way through the jungle
of e-commerce hype can be difficult, but we want to make it simple
for you. You need a merchant account? You want to sell on-line? Let
us help you find some answers to those nagging questions.
Credit Cards? Who cares?
Your customers are all using credit
cards to make purchases on the Web already, so don't ignore the
demographics!
Retailers refusing to enter the
e-commerce arena are probably digging themselves an early grave. You
know you want to make money using the Internet, especially if you
already have an existing site promoting your business. Take it a
step further, and actually sell your products online.
You're worried about the cost? It's
significantly cheaper than opening a new shop!
What is a Merchant Account?
A Merchant Account involves a special
type of arrangement with a bank or clearing house that allows you to
accept credit card payments into a special bank account (your
"Merchant Account"). The results of any credit card
transactions passed through your online authorization company are
then, hopefully, credited to your account if the transaction is
approved.
Why use a Merchant Account?
Having a Merchant Account is the most
cost effective way of accepting payment by credit card. It's not the
only way, as will be discussed in our Doing It Without A Merchant
section. But, put simply, once you have a merchant account (and a
company who will authorize the payments online), you will be able to
accept credit card numbers on your site, and then receive any
payments due to you. It's as simple as that.
How does it work?
Getting the money from your customers
credit card and into your account involves several stages. The first
is actually approving the sale and taking the customer's credit card
details on your Web site. Next, the card has to be verified and
approved, to check that it's not been stolen, or has expired. Your
Merchant Account company may provide this service, or you may choose
to use an online authorization company, such as DataCash. It's wise
not being too cheap with companies who provide authorization
services, since accepting invalid credit card transactions could
cost you dearly.
After the card has passed rigorous
security checks, your merchant account provider (or online
authorization company) then passes the details to their credit card
processor who debit the customer's credit card and deposit the money
into your merchant account. This chain of events takes between 1 and
2 days with most merchant account providers, although the features
that your chosen provider offers may turn out to be different. We
will be covering a number of merchant account providers in our
reviews.
The other method
While some Merchant Account Providers
offer an 'all-in-one' solution where they, supposedly, handle your
merchant account and the processing of the credit card orders, you
may prefer to let separate companies handle each section. For
example, you may let one company provide the online authorization
service, and get a merchant account yourself with your chosen bank.
When we come to review services,
later on in this series, we'll investigate both methods. Remember,
however, that using the 'all-in-one' method may mean a larger
commission is taken out of your transactions, whereas the latter
method may just cost you a larger startup fee.
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