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Credit Card Solutions for Fledgling Businesses

By Angela Wu
Posted Sunday, July 11, 2004

When I first started out on the Internet, one of the things that was repeatedly hammered into my head was that I *had* to accept credit cards online.

Time and time again, I was told that Internet surfers are an impulsive (and impatient) bunch -- very few people will take the time to write out a cheque, dig up an envelope, address it, find or buy a stamp, and finally go drop it in the mail.

Okay. I can understand that. Quite frankly, I don't order online myself unless I can use my credit card.

There was only one teensy little problem: at the time, I was a fledgling online business. I didn't have the funds for my own merchant account - assuming that I would have been approved, of course.

I simply couldn't afford the myriad of fees associated with a merchant account. Heck, I couldn't even afford the monthly fees - not when I didn't know how much I was going to sell!

Luckily, one kind-hearted soul pointed me towards third- party credit card processing companies. These companies take credit card orders on your behalf -- no monthly fees! Instead, they make their profits by taking a percentage of your transactions.

Sure, the percentage may seem a bit high -- but you don't have to pay ANYTHING unless you first SELL something. In other words, if you sell nothing, you pay nothing.

A few things to consider when searching for the right third-party credit card processor include:

= Setup fees: is there a charge to activate your acccount?

= Transaction fees: how much do they take as their "cut" of the profits?

= Reserve: this is the amount of your profits that are (temporarily) held back to use against future returns or chargebacks.

= Reliability and service: do they have a good record for dependability? Are they easy to contact and helpful if you experience problems?

= Restrictions and limitations: do they handle only digital products? Is there a maximum price that you can set for your product or service?

= Other ordering options: do they offer online chequing or toll-free ordering? Are there additional charges?

Third-party credit card processors can be found all over the 'net. The three I use myself are:

= GloBill (for membership sites): (

= Digibuy (for eBooks and software): (

= Clickbank (for advertising sales, affiliate sales): (

There are many more! Don't be afraid to ask others for their recommendations and opinions.

Third-party processors offer a win-win situation: your customers have a fast, convenient way to order online ... and you increase your sales without having to worry about covering fixed monthly fees.

About the Author
Angela Wu is the editor of Online Business Basics, an exclusive newsletter for eBusiness beginners. Visit ( for tips on building a business on the web.


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