Choosing the Right Merchant Payment Service

If you are a small business owner looking to open an eCommerce website (or perhaps already have one), then one of the biggest issues you’ll face are online merchant account fees charged by your payment processing service. At a quick glance, it appears the only options are to either pay tons of money to offer the functionality of instant credit card processing, or to forfeit the idea all together.

Having a wide variety of payment options is important to your business for obvious reasons. When presented with two websites, one which offers instant purchases via credit card verification and the other which requires the customer to print a form and mail a check, 99% of consumers are going to pick the former option.

That being said, routine charges of up to $150 a month in credit card processing fees are tough to justify for a business that has a relatively small sales volume. Often times, in addition to the monthly fees, merchant account services will charge application fees (upwards of $400) and other various leasing fees which can really add up.

There are however, a number of options that can work better for smaller-scale businesses, namely, pay-per-transaction merchant services. ccNow.com is an example of such a service that charges 10% of each sale made. No additional charges are accrued and ccNow.com transfers the funds from the customer’s card to your account after each sale is confirmed and shipped. The small delay in payment should be well worth the money you can save in fees.

The volume of your monthly sales will determine the smartest merchant service to go with. For very small businesses selling less than $1,000/mo, ccNow.com is likely the best option. If your business sells intangible services, subscriptions or electronic files rather than tangible products however, you will want to go with ClickBank instead as ccNow.com doesn’t support intangible product sales. While there are no monthly fees with ClickBank, there is an application fee and they charge 7.5% + $1 on every sale, so if your products are very low in price, this may not be a worthwhile option for you. Now, if you do sell more than $1,000/mo, you are likely going to benefit more from the standard payment gateway options, such as Authorize.net, as their fees are typically flat rather than a percentage.

PayPal is also a great option with very low fees, but has the disadvantage that users are forced to create accounts with the site before they can use the service. This can potentially turn away would-be customers. Having this option in addition to an instant payment option can provide users with the best of both worlds.

Whichever option you choose, please ensure that the merchant service you go with is legitimate and your customers enter their payment information in a secure environment. The last thing you want to do is get into a mess where your customers’ credit card information is at stake.

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Article by Benjamin Ballinger, Owner, Digital Sostratus Design.