First Paypal, then a Merchant Account… what you need

One of the most confusing pieces of an online business can be the merchant account process- accepting credit cards.

Most people start out by using Paypal to accept debit or credit cards, and it’s a great way to start. You can literally begin accepting credit cards same day and they take 2.9% from your sale. It’s worth it. But, Paypal does have limitations.

One problem I’ve had is that certain cards have been declined, seemingly for no reason. This seems to happen when a person pays with a credit card that is linked to a Paypal account, but does not sign in. Paypal wants a sign in, whenever possible. The other limitations in my eyes, is that there is no coupon capability, or affiliate capability. You can connect some email marketing programs such as aweber or Mailchimp, but it doesn’t work with all of them, so if your program doesn’t integrate with Paypal (iContact), you won’t be able to set up an autoresponder.

Ejunkie is a very affordable option that will integrate with Paypal. It does allow you to set up a basic autoresponder and create coupons. It also has an affiliate component.

If you don’t want to use Paypal at all, then you’ll need to get 3 different accounts: a Merchant Account, Gateway and Shopping Cart.

  1. The Merchant Account is an account with a bank that will allow you to process credit cards. Chase Paymentech is an example, but you can get an account at the bank you normally bank at, if you prefer. Make sure you have the online component.
  2. Gateway: This is the go- between that will do the actual processing of the credit card and send the info to your bank/Merchant Account. is an example.
  3. Shopping Cart: This allows you to create payment or buy now buttons. An example is 1shoppingcart. When someone clicks on your payment button, the credit card information gets sent to your Gateway, then the funds are transferred to the merchant account, and finally… the funds are transferred from your merchant account to your regular bank account.

There are monthly fees and or/percentage fees for each of these. They add up, so you should seriously be bringing in income to warrant the setup and fees. The setup can be somewhat of a pain and a lengthy process. But, the great news is that once it’s all set up, everything will run seamlessly in the background.


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