Online Merchant Account Providers

You've found a MAP to give you a online merchant account. What needs to be done before signing the contract? You should:

• make sure you understand what's entailed: technical, financial, legal.

• shop around to know what constitutes a good deal for your business.

• check that the merchant account will work seamlessly with your chosen shopping cart and payment gateway.

Software Integration

Ideally you would first choose your storefront program, then establish the payment gateway system, and only then research the appropriate merchant account. In practice, it's often necessary to juggle the options. Nonetheless, the most important decision is usually the choice of shopping cart, and here you can shorten the odds by choosing one that employs a popular gateway system, listed here.

Remember also to what hosting platform is required – generally Windows NT or Unix. Integration is a good deal easier if both storefront and payment gateway use the same platform.

Software Integration: How It Works

Why do shopping cart, gateway and merchant account need to work together? Well, anything the acquiring bank requires must be collected from the website customer, and the stated shipping costs, tax and payment details must also find their way through the system to the customer's credit card account. But payment gateways demand a good deal more than that. Their security measures employ protocols, message formats, certificate authorities, sums, secret keys, secure socket layers, timeouts, and retransmissions. That in turn means compatible procedures, and sometimes common operating platforms. The details only concern programmers, but banks will know what their systems can and cannot support.

This information should also be available to ISOs understand this very well, and can be extremely helpful to the prospective merchant. Unfortunately, many still chase the commission, and it is usually wise to contact all parties to double check that everything will indeed work as promised.

Who Does What?

To practicalities. Suppose you find your ideal merchant account: what happens next? The provider arranges for a third party (credit card processing company) to accept the credit cards, verify the transactions and deposit funds into the acquiring bank. The third party provides you with software — the payment gateway — to link up with the third party or to process cards on your sites. Then what?

• if your gateway takes the form of a secure order form hosted on the credit card processing company, you may simply be able to cut and paste the supplied HTML coding. Much depends on the instruction manual and your own level of expertise.

• if your system is supplied as a complete package by the company hosting your website, then that hosting company may be able to do the installation. But standard support doesn't usually cover hours of coding, and you will probably end up paying a sizable bill, either to the hosting company or a third-party programmer.

• If your gateway is an API (application programming interface) running on your server, then you will most certainly need a expert programmer familiar with both the server and the coding language (Perl, PHP, ASP, C++, VB or Coldfusion). The bill will be high, but using an accredited professional will be cheaper in the long run.

Finally, you have to get the funds deposited into the acquiring bank into your own bank account. The two may be the same — if your business bank is supplying the merchant account — and transfers between banks located in the USA are not expensive. On the other hand, overseas merchants will obviously need to investigate with both banks the costs of transfers and currency conversion.

Costs

How much will the payment gateway cost? If your merchant account is arranged through an ISO, then the fees and charges will probably include the hire of payment gateway software, though you should inquire. If you've obtained your merchant account directly from a bank, however, then the payment gateway costs usually come as extra. You may have to pay a few hundred dollars for setup, plus possibly various monthly and transaction fees. Check.

Security

Customers are providing you with credit card details. What measures are needed to handle the information securely? Once again it depends on the payment gateway system.

Our downloadable e-book lists sites providing the mechanics of this and other aspects of merchant accounts. The resources page lists payment gateways for companies operating within and outside the USA.

 

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