Establishing A Merchant Account

If you want to make online sales then you must be able to take payment by credit card (cc). Here is how it works:

      ~ The customer provides the cc number to you in one of 3 ways: They call you on the phone; or they postal mail (or fax) an order form; or most commonly, they send their number securely via a shopping cart;

      ~ The cc must be authorized, which confirms that the card # and expiration are valid;
      ~ You deposit the sale via your merchant account;
      ~ The money is transferred to your bank account, less any percentages that the cc company will charge for the use of their services.

credit cardsStarting out...

The ideal place to get a merchant account for accepting Visa & MasterCard is through your own bank, since you know them and presumably they know you. But regrettably, many banks no longer want new accounts unless you have an established bricks and mortar storefront; or, they have turned their cc services over to a third party.

If that attitude describes the banks in your area, then you will need to turn elsewhere. You may find it helpful to ask friends or colleagues where their own merchant accounts are located, then check those sources. But if that too is unfruitful, then listed below are some independent "online merchant account services" that you may want to check out.

Note that if you do your own search for similar companies, then be aware that many of the online merchant account sites listed on the internet are simply affiliates of larger cc services, so the name is different but the rates will be the same. "Card Service International" is an example of a company with a LOT of affiliates.

These sort of online merchant account services are widely used at this point, so if you read the small print then in all likelihood you'll make a good decision ~ lower on this page are some important considerations to keep in mind.

Please Note: The merchant account links below worked at the point that this page was constructed. If any are not connecting now, please click here to

Third Party Services:


Wells Fargo

Millenium Card

Suggestion: Print out the rates from each service, then take advantage of the toll free sales support wherever it is offered. Prior to making any committments you should be very certain that you receive satisfactory answers to this [list of questions].
[The merchant account links above worked at the point that this page was constructed. If any are not connecting now, please click here to ~ thanks.]

[Mastercard Home]  ...  [Visa Home]
Important! PayPal now owns Versign and has set up an online payment system whereby you can accept credit cards at your website without setting up a separate merchant account. For more info, go to:
Website Payments Pro

In essence, the overwhelming majority of your sales will be online via the shopping cart. This is similar to someone calling you on the phone and giving you their credit card number; or, receiving an order form in the mail with the cc# written out.

Remember that if you have set up a shopping cart for you via Mal's E-Commerce then you will be able to get your sales information sent to you safely and securely. Therefore, you do NOT need "real time authorization" (expensive) and thus you do not need "gateway access" ~ at least not when starting out.

Here is how it works using the cart service we recommend...

When the order is placed, the cart simultaneously generates a notification email to you and an email receipt to the customer. Then, at your convenience you enter your password protected secure control panel using your browser to retrieve the customer's cc#, which you will manually process via your merchant account. That processing will either be through an electronic terminal (recommended, and often required); or by phoning an 800# to get the authorization then postal mailing the deposit to your bank (this method is being phased out).

Note that in all these cases regarding website sales (phone, mail, cart) you do not physically have the card in hand (and because of that, many banks will view such a sales situation to be at a higher risk ~ thus their hesitation to take on the account!).


What you DO need is a reliable place to deposit the cc# number and $$ amount for each sale; also, this same place must provide the all-important authorization. Ideally the service you select would process the card, take their cut, then electronically transfer the funds into your own checking account within 24-48 hours (you might even want to set up a low cost checking account just for this purpose, so it is separate from your primary business account).

Try to find a service that generally has the best rates for all of the following:

~ Setup fee (in some cases this may even be zero);

~ Monthly fee (for example: a charge for the "monthly statement" ~ ideally $10 max);
~ Per transaction fee (for example: 25 cents);
~ Discount rate (this is the cut they take from each sale ~ try to stay under 4%);


~ There should be no "monthly minimums" (ie, required sales $$ amount);

~ If you are a CWSD client then we will set you up with a secure shopping cart, so don't pay for a separate one;
~ Visa & MC are what matter most ~ don't pay anything extra for Am Ex or Discover;
~ Do not get locked into any longterm contracts;
~ Be sure to ask about any other "hidden" fees not mentioned here;
~ Set the account up using the same business name that the customer sees when they make the purchase. Otherwise, when they get their statement they'll wonder what it is and you'll have to deal with chargebacks;
~ Prior to signing on to any service, get their terms in writing!

What you are looking for is a combination of factors that is the best deal for you. For example, let's say you receive only occasional orders but each sale is a high ticket item. If a service has no monthly statement charge and has a very low per transaction fee (eg, 10¢), but it also has a higher discount rate (like 7.5%), then those high ticket items would lose too much of a $$ percentage, so it's not a good plan for you.

If however another service has a fairly low discount rate (like 3%) but charges a higher per transaction fee (eg, 45¢) and does have a monthly statement charge (eg, $8.95), then that may actually work out better financially because you save the 4.5% difference in the discount rates.

So as you can see, you have to balance it all out for your own specific situation.


You must also consider the method by which you transmit the cc# and sale $$ amount to the service. credit card terminalThe most efficient way is to use an electronic terminal which is connected to your telephone line, and many cc processors will provide one at no cost to you. If you must purchase your own, then depending on the kind you'll use, they may run you a couple hundred dollars (check eBay for used machines). If you decide to go this route, the company will likely have various models for sale or lease ~ be sure to get one with a built in printer (like an adding machine). Click [HERE] to view a source for electronic terminals.

As mentioned, you can find used or refurbished cc processors on eBay for a fraction of the cost of a new machine ~ go to and try a search for "Verifone" or "credit card machine". Prior to making a purchase, be sure that your bank will provide the necessary tech support so the machine can be configured for your own deposits (generally they tell you the instructions over the phone, so it's simply a matter of punching in the sequence of numbers when they tell you to do so).


There is a lot to think about when committing to a merchant account, so take your time and give careful consideration to each service or bank that you find promising. If you have not signed a long term contract then you can always switch, should you not be satisfied (most electronic terminals can be re-programmed for the new service).

It's important to understand that when your site is first active on the WWW things will be slow because it takes time to build up visitor traffic. Therefore our recommendation is to keep your initial merchant account costs and monthly fees as low as possible until the point is reached where you begin generating ongoing sales. When that starts to happen you can make the decision as to whether or not you need to upgrade your merchant account capabilities. But for now, put the money you save into promoting your site!

· NOTE! We have a list of essential questions that you can [print out] and use for reference when considering a merchant account service.


© ... Please bear in mind that we offer the information on this page simply to assist you. We have our merchant credit card account through our own bank and thus have no personal experience with any of the services listed above, so regrettably we are unable to offer any recommendation as to which of these is the most affordable or dependable. As you would do with any financial decision, be sure to READ THE FINE PRINT!