There is a seemingly infinite number of choices and configurations for taking payments online. Choices range from almost total "do it yourself" programming to turnkey packages.

You can accept payments online in two general ways:

1) Through your own online merchant account and/or

2) Through a third party processor.

Taking Payments Online through your own Online Merchant Account

Accepting payments online via a merchant account puts you in control and limits your reliability on outside payment acceptance services. Taking payments online can also seem like a jigsaw puzzle. Besides an Internet merchant account, you will need shopping cart software, a store or site host, a processor, and a secure payment gateway.

You may fit the pieces together in different ways. On one end of the spectrum, you can choose each provider individually. On the other end, you may choose a turnkey solution, where the provider has completed the puzzle for you.

There is no single best solution. Your choice will depend on your particular needs and experience. Among other considerations, you should factor in your own comfort with the technologies, customer convenience, providers' service levels, available technical support, reliability, costs, and time commitment involved. Fees

There are a myriad of potential costs and fees involved in accepting payments online, making it difficult for a small business or entrepreneur establishing online payment processing to compare different options.

Potentially, you could be charged fees by each provider involved in helping you take payments online -- application fees, set-up fees, yearly memberships, monthly statement charges, monthly minimums, gateway access fees, statement fees, fixed transaction fees, variable transaction discount rates (processing fee for each transaction), and cancellation penalties are all common.

Often, it is easy to misinterpret the fees you will owe. Rarely are all costs revealed in one place. If you are reading about a merchant account, for example, the quoted costs may not include gateway access, hosting, and/or shopping cart. Because you may be comparing "apples to oranges," options that at first appear low-cost can -- upon implementation -- turn out to be pricey. Similarly, expensive-sounding solutions may actually be reasonably priced.

Accepting Payments Online through a Third Party Payment Processor

If you are not ready to set up your own online merchant account and/or you want to offer additional online payment options, you can turn to a variety of third party payment processors.

Third party payment processors provide a way to accept payments online without the extra cost and obligation of a merchant account. To compensate, transaction fees are significantly higher than for merchant accounts.

Each program is a little different and no single third party payment processor is right for all situations. Clickbank, for example, helps you sell digital products online. CCNow will process payment for tangible items only.

Deciding What's Best for You

Whether you accept payments online through an Internet merchant account, through a third party payment processor, or both, read all agreements carefully before committing. Do not hesitate to ask the providers questions if information is unclear or incomplete.

Put together the "puzzle pieces" for taking payments online and your Web sales will flourish!

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Љ 2004 Bobette Kyle. All Rights Reserved.