Being able to take credit cards is vital to any website that wants to successfully sell goods and services on the web. At the dawn of online business it was thought that relying on credit cards was not a good idea, because it was trying to apply an offline technology to the Internet. Lots of businesses tried to offer micro payment systems for example "beenz", but the web-based currencies didn't flourish. Here we are, approximately 10 years on from the launch of businesses online, still typing in credit card numbers to buy online and therefore accepting credit cards when trying to sell products online is still hugely important.

There are basically two different ways to accept credit cards online. Let's compare merchant accounts. Businesses can either apply for their own merchant account, which allows the business to process credit cards via a bank gateway, or the business can sign up with a third party payment service, who actually processed the credit card orders on behalf of the business selling the products. Getting a merchant account has higher upfront costs, but has lower per transaction fees. Using a third-party processor costs less initially, but has more expensive per transaction costs.

The decision as to whether or not to get a full merchant account or use a third party payment service is just a question of working out which would cost more money. Let's look at two different business types and compare merchant account benefits…

In the main, merchants who are already trading locally and simply want to start selling on the Internet will be more suited to getting a merchant card processing account. Most likely, It's most likely that they will already have an offline merchant account and will tailor that account to add the ability to do "MOTO", which is "Mail Order Telephone Order" processing and only means that the cardholder is not there at the time of purchase.

For micro businesses starting to sell products online, it is think about testing their sales using a third-party payment service. The advantage to the new business is that there's hardly any upfront cost so they can test their business model easily and cheaply. If sales boom, they can think about reducing the per-sale costs by applying for their own merchant card processing account. If the market isn't profitable, they can quickly leave the marketplace without having paid significant upfront costs to get a merchant card processing account.