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Re: merchant account vs. card authorization service
A merchant account usually includes a "gateway" service.
The gateway is used to authorize the customer's credit at the time of the sale for the amount of the total order.
The authorization would then need to be "finalized" and charged once you actually ship out the merchandise. You get the money in your bank account about 2-3 days after the order is "finalized".
I'm not sure if where you are reading "card authorization service" is the same thing as a "gateway".
Re: merchant account vs. card authorization service
I was reading an old interview about "busted tees". The end of the article talks about the services they used to start their site. The authorization service and merchant service is listed separately. I was wondering if you need both and what the differences are.
Re: merchant account vs. card authorization service
You need both to be able to accept credit cards on websites. The merchant account is the actual ability to retrieve funds for an individuals bank accout, such as www.authorize.net. The gateway is a secured service that transmits the data through a gateway from your site to the actual processng terminal thus allowing you to charge another individuals credit card.
Explained as easy as possible, you need both to be able to accept credit cards as an on-line merchant.
Re: merchant account vs. card authorization service
Paypal really isn't a 'merchant account' in the traditional sense. it's really its own Payment gateway where they process transactions on your behalf and the funds go into their account before they forward it into yours.
A merchant account is one that is generally offered by a bank for users to process and receive Credit Card transactions. The funds are then deposited into your bank account the next day after it does its daily processing batch. Most, if not all the banks will have a card authorization service/payment gateway that users have to intergrate into their website or shopping cart. The bank's gateways aren't always the best as they are very simple API's so there are a host of 3rd party payment gateways that offer a better card authoriation service (usually easier to implement into a site or look better).
Re: merchant account vs. card authorization service
Quote:
Originally Posted by zhenjie
Paypal really isn't a 'merchant account' in the traditional sense. it's really its own Payment gateway where they process transactions on your behalf and the funds go into their account before they forward it into yours.
True, but it can still be used in place of having both. You simply need to drain the Paypal account into your bank account regularily.
Re: merchant account vs. card authorization service
what i would do is make the website so you get the CC info from the customer in a SSL form or over the phone and get a manual portal instead of using an online merchant gateway.
that way you can take cc orders online, over the phone or local customers with CC swipes
Re: merchant account vs. card authorization service
Quote:
what i would do is make the website so you get the CC info from the customer in a SSL form or over the phone and get a manual portal instead of using an online merchant gateway
I used to do it that way, but it can make processing lots of orders pretty slow.
An online gateway can do things "on the fly" like Adddress Matching (AVS), fraud checking, CVV code matching, making sure the customer has the money for the order, etc. That way, if there is a problem with the order, the customer knows instantly and can double check their information, use a different card, different payment method, etc.
When you try to process this offline, you have to manually do a lot of that which can take up a lot of time
With a merchant account and gateway, you can still take orders over the phone, in person, online, by fax, or any way you choose.
Re: merchant account vs. card authorization service
Quote:
Originally Posted by Twinge
True, but it can still be used in place of having both. You simply need to drain the Paypal account into your bank account regularily.
Defiinitely. For a start-ups and those new to eCommerce its a fantastic service. But when you start establishing yourself I always recommend a proper merchant account and gateway as it allows full control over the money instead of letting Paypal take control of it. I've heard some horror stories with Paypal and them holding or suspending accounts with some merchants.
Re: merchant account vs. card authorization service
Quote:
Originally Posted by zhenjie
Defiinitely. For a start-ups and those new to eCommerce its a fantastic service. But when you start establishing yourself I always recommend a proper merchant account and gateway as it allows full control over the money instead of letting Paypal take control of it. I've heard some horror stories with Paypal and them holding or suspending accounts with some merchants.
Oh, I'm aware of those stories =) I'll probably look into something else when I'm doing enough sales to make it worth it. But for someone doing a relatively small number of orders Paypal is more affordable to work with. Just drain your Paypal account into your bank account often so there isn't any money for them to freeze.
Re: merchant account vs. card authorization service
How would you suggest being set up if I am going to travel to events to sell t-shirts and want to be able to take credit card payments? Would I need to have a computer with me and Internet access? I am completely new to this. Thanks.
Re: merchant account vs. card authorization service
Quote:
Originally Posted by lgiglio1
How would you suggest being set up if I am going to travel to events to sell t-shirts and want to be able to take credit card payments? Would I need to have a computer with me and Internet access? I am completely new to this. Thanks.
A mobile terminal perhaps. All it needs is access to a phone line or you can use your cell in some cases depending on the terminal you receive. That should let you swipe cards and have them approved on the spot.
Re: merchant account vs. card authorization service
The other, probably more common, method is to have a manul card slider for events and you later process the cards by hand after the event at an electronic terminal. This way you don't need electricity and a phone line at your booth, which won't be available at all in some cases.
Re: merchant account vs. card authorization service
Though manual card crunchers do have their disadvantages (namely, you can't check to see if the card is rejected before giving the shirt to your customer, and legitimate customers may be turned off by them as extremely insecure).
merchant account vs. card authorization service 
