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Everyone that runs an online business has to answer the question: which merchant account provider should I choose? There are literally thousands of providers out there that offer similar services. The purpose of this article is to clue you in on what you should be looking for in a merchant account provider.

Price

When it comes down to it, money is the most important consideration. Providers have a wide array of fees that they access. Most providers require a setup fee for the service and then a monthly fee. It amazes me how much some people are paying for these services! Try to look for a company that doesn’t require a setup fee and has a low monthly payment.

Another fee that is added is a percentage of each transaction. These interest rates are calculated by how much you process in a month. The more money you process a month, the lower your interest rate will be. Part of the interest rate is accessed by the credit card company (Visa, Mastercard, etc), so there is a limit for how low you can get your rate. The key here is to compare rates between providers to get the lowest rate.

Features

For e-commerce, the provider should have a good interface for your web site. If you’re using a e-commerce software such as osCommerce, make sure your provider is supported. If you, or your developer, is designing the system, make sure the company has good support for interfacing with their payment system. Some providers will offer an API (Application Program Interface) so that you have sample code to connect to the payment system. This is VERY helpful if you are designing your own system.

Recommendations

I try to remain unbiased in all of my articles, but I think I’ve found the perfect merchant account provider. Paypal, owned by Ebay, has recently got into the merchant account business. They have a very low monthly rate, good interest rates, and a great API!

Eric Friese owns custom-ecommerce.com and is President of Tiger Web Solutions. Eric Friese has been in the web development industry for 10 years. Eric can be reached through the Tiger Web Solutions web site.

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No sooner had I blogged on the merits of using Paypal to secure payments from clients that Google has taken the wraps off of its long anticipated payment processing system. Google Checkout has arrived and it promises to be one more program for merchants to consider when setting up payment options for visitors to their websites.

With Google Checkout, customers to your site can make payment for goods and services much as they can do with Paypal. Google is sweetening this deal by charging merchants a lower fee than Paypal and by offering rebates on Google AdWords advertising to merchants using their new program according to an article in the San Francisco Examiner.

Google is also using this service to “collect” and store people’s credit card information in the hopes of making checkout time faster online. In some ways this gives me the creeps as it becomes just one more way for someone out there to have your vital information on hand. Of course, if you use Amazon and similar services they already do the same thing.

Will I switch from using Paypal to using Google Checkout? For the short term that answer is no. However, I will monitor the program’s progress as I consider adding some additional features to at least one of my websitesa storefront perhaps.

Copyright 2006 - For additional information regarding Matt Keegan, The Article Writer, please visit his blog for wit, quips, and freelance writing tips.

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