Online Payment Processing – Merchant Services

Processing solutions for online payment include third party solutions as such: PayPal,, or ClickBank.  It may be more cost-effective for you to use them if you have a new start-up or an e-commerce store.  Also, for big stores, merchant accounts are vital. Business service accounts allow you to accept credit cards. If you have an settled business, you probably already have a merchant account that lets you accept credit cards and put the money into your bank account instantly. However, you will be required to apply separately for an online merchant account. Mostly, they have higher fees and interests for an online merchant account than an offline account, considering that buying on the web is riskier, without having the physical card present. Contact your bank to apply for a merchant account and ask about the rates.

How it works

A false belief is that your e-store or shopping cart can take the credit card info from your clients and then simply just deposit the monies into your bank account! That is not the case at all.

Your shopping cart only shows your products, and shoppers put them in the cart.  Shoppers can then bring the cart items to the check out line just as they would at the big box stores such as”Wal-mart” for example. However, at Wal-mart, the clients would swipe their credit cards into a machine, whereas on the on-line store, they will enter the credit card info onto a gateway system.  The gateway will check the validity of the credit card and process it so that the money goes from the customer to the bank account of the merchant. If the payment goes through, the store will fulfil the order and put the tracking number for the shipping of the goods allowing the customer to track the package that he ordered.

Merchant Services for Payment Processing

Gateway Compatibility

A payment gateway may offer great pricing, but if the range of shopping carts or store front software it supports is limited, the whole process of setting up for taking online payments may cost a lot more than you think. It would be a great idea if you ask us for a list of gateways our shopping carts that we install for you will support so you do not have to worry that integrating your exotic gateway pick will cost you additional amounts for custom coding it in the shopping cart which is already integrated with a large number of popular gateway systems. Please ask for a list before you go shopping for a gateway. Always try to choose one of the popular ones versus the least costly.

3rd Party Processing

Another idea may be to use a third party processing service such as Paypal, 2Checkout or ClickBank. These three services are simply a payment gateway and merchant account rolled into one and operated by the same company. In the case of ClickBank they also do offer an affiliate program with features at no extra cost and all three also provide recurring billing services for subscription and premium member services. Although easy for smaller accounts, these services usually charge more for transaction processing than direct merchant account, so if you are expecting large volume of sales, please review those charges carefully before making a decision.


Today, Paypal has become the largest online payment company for 3rd party merchant activity. It is almost a “must”  to offer Pay Pal as a payment option on your site. Even big companies like GoDaddy and Yahoo offer payment using Paypal. There are no monthly fees unless you sign up for Paypal Pro where you can accept payments right on your site.

Pay Pal does not limit the number of purchases that are bought, and is flexible in terms of growth and sales. You do not need to qualify or have a high credit rating in order to use Pay Pal. Most merchant services will not even issue you an account until you are checked out and qualify.

We do urge that all on line stores use Paypal; at least as a second option from the main processor.


2checkout processes many varied transactions. You can also accept Visa and Mastercard credit cards through 2checkout in twelve different currencies. As well, online credit card clients paying with US dollar have the option of paying with AMEX or Discover.

2checkout has a fraud screening system that brings up a main “red flag” when an online credit card order has certain warning signs that come up. At that point, the fraud team examines each of these transactions one by one.

As with all all third party sources, using 2checkout means less admin work, no long term contracts, and less overall cost to take credit cards online for most low volume credit card accounts.


You can sell online your digital products that are for download as well as take credit card payments, debit cards, and online cheques through Clickbank and its group. As with all third party handling, the sale is technically made by Clickbank, to which you “sell” access to your digital product. In return, they pay you a percent of all the sales and then list your product in their online market list. Looking at it another way, Clickbank charges you a fee to process your sales and for access to their customers.

With the Clickbank account comes the screening of the payment and the support for billing queries.  Other items are the handling of the refund request, and any other secure payment systems queries. You can also generate sales and traffic activity as well as provide online sales page(s), fulfil orders, and provide customer service support.