Online Merchant Account

To set up a payment system online you need an online merchant account. If you expect high volumes of transactions a month, you may have to provide more information about your business to your online merchant account provider: articles of Incorporation, a business license, recent tax returns and the like. A bank can provide an online merchant account, but they rarely take risks with small companies and setting up an online merchant account with a bank can be a lengthy and expensive processes (banks will often charge a set up fee, monthly fee and per-transaction fee).

To offset this problem there are a number of online merchant account and payment processors that require no set-up or monthly charges, and instead charge a per-transaction fee only. Verisign (www.verisign.com) and Paypal (www.paypal.com) are two of the most commonly used - but whichever you choose, be sure that your shopping cart developer software can support it before you get started.

Most online merchant accounts and payment processors like Paypal and Verisign will accept at least four credit cards - very useful, because credit card payment is the quickest and easiest way for a customer to make their payment (you'd be surprised how many customers would rather do this than post a cheque and wait for the goods - if you don't provide a credit card service, they'll use your competitors).

A newer service is to send a cheque online. A customer sends you information and authorization about and from their checking account to your computer, then you use check printing software to 'print' the check and take it to your local bank. Credit card payments provide a much easier and quicker revenue return for your business (the money is in your account within a few days), but if you expect a high volume of orders a month, it may be worth investigating online check acceptance and printing software.

Newer still is the concept of ecash - or, 'digital cash'. This form of payment has major advantages: the 'pay-as-you-go' style card means that you simply extract the existing cash from the card without personal financial details being transmitted online (which eliminates the risk of card fraud), and allows younger consumers who are too young to own a credit card to buy goods online. To set up an ecash merchant account you need the equivalent of an 'ecash register' to accept the digital money: Checkfree (www.checkfree.com) has more information.