- Applying for a traditional merchant account is similar to applying for a credit card. The merchant account processor will look at your business and your credit and make a decision on whether or not to issue you a merchant account. Traditional merchant accounts have lower fees than other options but often require you to lease software or equipment for credit card processing. Traditional merchant accounts make the most sense for high-volume, high-value businesses.
- For smaller businesses or businesses that may have some credit score and rating problems, third-party credit card processors are a good option. The per-transaction costs are higher than with a traditional merchant account, but many third-party credit card processing services offer online transactions and processing, which can save you the cost of renting a credit card reader or software. Many third-party credit card processing services easily integrate with web sites for online sales.
- PayPal offers basic credit card processing services with no up-front costs. Although it is optimized for online use on simple websites, there are more advanced features that can help PayPal integrate with your web catalog. PayPal supports electronic invoicing, which will allow people to pay the invoice directly using either their PayPal account or a credit card. The downside of PayPal is their transaction costs. They are high and may be prohibitively expensive for businesses who do a lot of credit card based business. However, for simple, occasional credit card transactions, PayPal is a quick and simple solution.
