When should I get my own "Online Merchant Account" and when should I use an "Online Credit Card Payment Processing Service"?|
Let's look at the advantages and disadvantages of using an "Online Credit Card Payment Processing Service"...
The advantages are that you simply link your products to the validation service who then accepts credit card payment on your behalf. They check the card, process the card and send you a monthly payment for the amount you are owed. Bingo! Your own e-commerce solution!
The main disadvantage is that you will pay for the service. Costs vary, but usually the credit card processor has to make a profit and so charges you a few extra percentage points on the transaction in comparison to having your own online merchant account.
Perhaps the best way to look at using a payment processing service is to see them as a stepping stone for your business. Initially you will pay more *per order* but with little or no setup fees. Then, if your business is a success, you will pay a larger setup fee for your own online merchant account, but pay less per transaction.
Essentially, it's just a question of math. You need to work out the fees involved in getting and maintaining an online merchant account versus using a payment processing service to accept credit card orders for you. This site will help you do that by looking at the fees involved and helping you compare the two options.