Barter for Cash

Being able to take credit cards is very important to any business wanting to actively sell their own products on the Internet. When businesses started selling online it was accepted that accepting plastic was a bad idea, because it was trying to apply a dirt-world system to the Internet. Lots of businesses trialled e-currencies eg “flooz”, but none of the e-currencies took off. Therefore, roughly a decade on from the launch of businesses online, still using credit card to make online purchases and therefore accepting credit cards when trying to sell products online is still hugely important.

Basically, there are two different ways to accept credit cards online. Let’s compare merchant accounts. Businesses can either go for a full merchant account, which allows the business to process credit cards directly, or the business can elect to use the services of a third party payment service, who processed the credit card charges for the merchant. Obtaining a full merchant account has higher upfront costs, but has smaller per sale fees. Using the services of a third party solution costs less upfront, but has more expensive per item charges.

The decision as to whether or not to go for a full merchant account or use a third party solution is simply a question of doing the math. Let’s look at two different business types and compare merchant account benefits…

In most cases, merchants who are actively trading offline and simply want to expand online will most likely be more suited to getting a merchant account. Most likely, Usually they will already have a real world merchant card processing account and will tailor that account to also do “MOTO”, which is “Mail Order Telephone Order” credit card orders and only means that the card holder is not present at the point of sale.

For small businesses starting starting to sell on the Internet, it’s think about testing their marketing using a third party processor. The advantage is that there’s hardly any upfront cost which means they can test their market easily and cheaply. If the market is profitable, they can think about decrease the per-item costs by obtaining their own credit card processing account. If the market isn’t profitable, they can at least leave the marketplace without having expended much capital to get their own credit card processing account.