Payment Processors: True and Third-party Accounts

2007-03-08 10:33:40

( Business )



CREDIT CARD CONVENIENCE

Payment processors are important issues that every online store has to contend with. The nature of online businesses makes it impossible to accept cash transactions, because the actual currency takes time to be transferred from buyer to seller, and this arrangement is risky for the sellers because they commit to an order without receiving any payment.

That is why most web based businesses employ an online payment processor that accepts and facilitates payments by using credit cards. Credit card payment processors are instant, convenient, and safe, for both buyers and sellers.

Payment processors are the most important backdoor operations that every online business must be able to do, and it should be one of the very first things you must have once your online business is in operation.

TYPES OF PROCESSORS

There are two basic of payment processors. The first is the true merchant online payment processor account. A true merchant account means that you directly apply for the right to accept credit cards as payments for the goods and services that you are selling. Usually, a direct merchant processor will process the credit card, and have the payment deposited directly into your account. You have the option to specify the types of credit cards that you will accept for payment.

If you already have an existing merchant processor account, then it is just a simple matter of checking to see if your account has a provision for online transactions, or upgrading to an online payment processor if necessary.

The second of the payment processors are the third party accounts. Under a third party merchant account, you do not transact directly with a bank, nor will you have an account with them. What a third party merchant processor will do is apply for their own true merchant accounts and have these accounts used by online business for a service fee.


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