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thanks to all of you who were kind enough to answer my other posts i really do appreciate your advice.

On merchant accounts i'm not sure if i need it, or how do i get one? Thanks again.:)
 

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Well, it all depends on the stage your company is in. If you're just starting out, a merchant account would be overdoing it and a waste of money. The only thing that would really differ than from using free paypal is that the user wouldn't be taken to the paypal page. If to you that's worth the 55$+ a month of a merchant acccount, then go for it and get one. If not, just use paypal for now.

I got a merchant account when I started and the first 2 months it has been more or less a waste of money since online sales haven't been that signficant. If your company is in its later stages(revenue over $1000 a month) then a merchant account is a good idea. There's the idea that merchant accounts are hard to obtain, but they really aren't. I got mine from http://www.cardserviceunlimited.com/ , if you want to get one.

Keep in mind though, that if you decide to get one, you have to sign a 6 month contract and whenever you cancel, you have to pay a $75 fee. I don't know if every place does that, but my provider does and that was the best deal I was able to find. Good luck.
 

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Keep in mind though, that if you decide to get one, you have to sign a 6 month contract and whenever you cancel, you have to pay a $75 fee.
That's definitely not the norm. Most places don't require any sort of contract.

A merchant account allows you to accept credit cards directly from your customers without having to go through a third party payment service like PayPal, 2Checkout, CCNOw, etc.

It allows you to process transactions under your company name, it can allow you to integrate the payment acceptance into your shopping cart checkout process so the customer never has to leave your site to pay you and they can find out in real time if the transaction was successful with their bank.

Depending on how you plan to start out, you may need one right away, or you may want to wait. If you have the budget for it (there are monthly fees with them), then you should go for it, because it can make accepting online payments much easier, especially from those people that don't want to deal with PayPal. You can also get the money from sales much sooner (usually like 2-3 days from when you process the transaction). It allows you to take mail order and phone credit card sales as well, which can come in handy.
 

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Discussion Starter #4
you people are awesome! thanks for taking the time to help a newbie out. Can't thank you enough.

Steve
 

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so from what ive researched- a merchant account basically gives your bussiness more control over the handling of credit card sales... does it have any benifits in terms of less graft taken off your profit by thiird parties... ie paypal takes 1.9-2.9 percent of the sale plus 30 cents for the credit card fee... am i mistaken in assuming that if you pay the 55 dollar or whatever merchant account fee a month... youll only have to pay something like 30 cents on each transaction and not the addition service percentage of a thrid party service like paypal?...
 

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Hi there ... there are a lot of merchant account options out there! Mine charges $10 a month statement fee and a $10 a month gateway fee (for a secured virtual terminal access to my website).

There is a fee per transaction and a basic percentage ... also additional fees for taking some types of cards (certain reward or corporate cards). I pay a yearly fee.

Also, I only accept Visa and Mastercard.
 

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Many banks with lower rates are more conservative. In order to handle online card orders, many require you've done business for a year "card in hand" before allowing internet processing.

Accepting Visa, MC, AMEX and Discovery go a long way in adding a feel of credibility to your business. PayPal is a money pit in the end.
 

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One of the biggest problems I see with using PayPal rather than a Merchant Provider is the appearance it gives. I personally won't give PayPal another nickel of my money, but that's a personal problem. I also don't shop online with guys that accept PayPal only. It just make them seem less professional or established.
 

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I also don't shop online with guys that accept PayPal only. It just make them seem less professional or established.
it seems there's alot of negative feelings about paypal... i'm not a huge fan at all... however, in canada it seems they offer one of the best rates and easiest ways to establish an ecommerce site that actually competes with many american rates... im not sure why but almost all of the good 'paypal alternative' merchant accounts listed on this site and else where are only available to US-based merchants...there are canadian ones but there rates and monthly fees tend to be alot higher for small businesses starting out with uncertain or growing sales figures.

i've heard many times- in general terms- the US market tends to be more favorable towards the upstart small business entrepenure type where canada tends to be more conservative and by the book... you guys were the guerilla revolutionary ones after all.

but either way, if i dont know how much im gonna sell at first, wouldnt a paypal be a better option since i dont have to pay any monthly fees?
 

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i've heard many times- in general terms- the US market tends to be more favorable towards the upstart small business entrepenure type where canada tends to be more conservative and by the book... you guys were the guerilla revolutionary ones after all.

but either way, if i dont know how much im gonna sell at first, wouldnt a paypal be a better option since i dont have to pay any monthly fees?
I dunno... I used PayPal and eBay for probably 3 years... and suddenly realized I was giving them (eBay) just over $1.00 on EVERY sale I sold... and around 25 cents on everything that didn't. I was lining their pockets. :)

SOoooo.... one day I marched into my bank and opened a Business Checking account with $1000 of my profits. I then told the gal I'd like to setup a merchant account and start my own business (away from eBay(. I suddenly realized bhow much I'd been giving away, and since I didn't have a merchant account of my own this whole time... I didn't qualify to get one through them. Washington Mutual is very conservative and doesn't allow start-ups to accept online payments for the first year. They only allow "card in hand" accounts until you have a proven track record.

Since then I'd started my website, have my own merchant accounts, etc. The fees are just part of doing business and are built into my costs. I was given a $50,000 small business line of credit at my bank last year, and have bought and paid for a $25,000 CNC laser, and now my Epson 4800 dye sub setup.

There's a lot to be said for legitimizing your business early, getting your records keeping started gradually, getting licensed, and playing by the rules. The tax shelters alone are worth it.

Even if payPal is cheaper, it won't always be that way if you're successful and you should assume you will be and head in that direction.

This site will show you how much you're giving them:

eBay Fees Calculator
 

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I dunno... I used PayPal and eBay for probably 3 years... and suddenly realized I was giving them (eBay) just over $1.00 on EVERY sale I sold... and around 25 cents on everything that didn't. I was lining their pockets.
Keep in mind, that they were also lining your profits. you got to put an item up for sale with zero advertising and have it sold. Time and time again. You got to accept payments from dozens of buyers without waiting.

That stuff doesn't come for free, even without eBay or PayPal. Like you said, it's just the cost of doing business and something you have to build into your costs.
 

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That's true Rodney. But, at some point you have to take a business seriously, and consider how you're perceived as an important part of your business.

EBay and PayPal have their place, but when you realize you're handing thousands of dollars over each year, you'll eventually come around to the value of standing on your own.
 

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EBay and PayPal have their place, but when you realize you're handing thousands of dollars over each year, you'll eventually come around to the value of standing on your own.
it seems its impossible to stand on your own with big banks and big credit card companies (and big government) involved in every move you make... its like rodney says the cost of doing business in this economy... :mad:

does anyone have any suggestions on how to set up a canadian merchant account that would minimize the amount of money lost on us to canadian currency conversion discount rates... on paypal its 2.5% ontop of the regular 2.9% on every sale

im becoming very confused with all this...
 

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That's true Rodney. But, at some point you have to take a business seriously, and consider how you're perceived as an important part of your business.

EBay and PayPal have their place, but when you realize you're handing thousands of dollars over each year, you'll eventually come around to the value of standing on your own.
But you're still handing thousands of dollars over to somebody. Whether you hand it over to PayPal for their payment processing or whether you and it over to your bank for their payment process, it's just a cost of doing business.

Same with eBay. Whether you pay eBay for advertising your product to millions or whether you pay your local newspaper/magazine/adwords whatever, you'll still have to pay for advertising. All costs of doing business.

I agree that accepting "only" PayPal is only good for a short time goal of accepting online payments, but I still have a "real" merchant account with my bank and I still accept PayPal because there are still a LOT of customers that like to pay with the money in their PayPal account.

I also agree that if you are an established business, that accepting only PayPal doesn't reflect well on your business.

I just don't think eBay or PayPal are just stealing money or getting money for nothing. They are offering a service that people pay for.
 

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That's true... but most questions are "Merchant account... do I really need one or is PayPal as good?"

Simple answer from me is no...
 

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Many Merchant account providers require a commitment with an early termination penalty.

Many providers have other small costing nickle and dime fees that aren't forwardly disclosed at the time of approving the contract.

Be sure to read over any and all paperwork where you are signing your name or your companies name. Ask questions about things you don't understand. Makes sure all "promises" are in writing or be wary of promises that sound too good to be true.

As someone who works in the industry (Merchant Account Provider) with hundreds of small businesses finding their businesses going under because they didn't take time to read what they were obligating themselves to.
 

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I want to accept credit cards only on my website. I want to get the best rates possible, but I also want protection.

What is my best option?

I am confused. What is the difference between a merchant account, a payment gateway and a server like paypal.

Thanks,
Jonathan
 

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I want to accept credit cards only on my website. I want to get the best rates possible, but I also want protection.

What is my best option?

I am confused. What is the difference between a merchant account, a payment gateway and a server like paypal.

Thanks,
Jonathan
Best rates will probably be your bank. I use my bank and they go through Authorize.net. I have pretty good rates. Much better than PP..plus PP will want to hold 20% of your money for 90 days-eek!
 
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