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Why You Need A Merchant Account

As a blogger, you can certainly make a nice living from banner ads and affiliate programs. As you become more experienced as an internet marketer however, you will soon discover that the really big money is in having your own product. No matter what type of product you decide to sell, from informational products to physical products, you need a way to process customer orders and collect money. This is when you really need to get hooked up with a merchant account.




What Is a Merchant Account?

If you aren’t too experienced with e-commerce, or commerce in general, a merchant account is a special line of credit extended to a business that allows the business to accept credit cards for payments. It is a middle man between your business bank account and the credit card companies. The merchant account provides you with a loan that covers the charge until the transaction has been finalized with the credit card company and the funds are transferred to you. So, it isn’t enough to simply have a credit card reader, you also need this merchant account to extend you a line of credit and deal with the back end processing of the credit card transaction.

Why You Need A Merchant Account

If you are offering a product online (and offline), you need to be able to accept credit cards if you want to maximize your income potential.Focus on banking with Small Business

When you are just getting started in e-commerce you can do this through Paypal or Skrill, but this does put your business at a unique risk. You see, if you use Paypal or a similar service rather than choosing a merchant account provider, you always run the risk of losing your ability to process credit cards, and you can even have your account frozen with all its funds, or lose the account totally.

What Paypal does is allows their customers to use their own merchant account. Naturally they need to protect their own account, so they monitor their clients usage of the account and anything that points to a problem with fraud will set off red flags at Paypal. Their answer to this is to freeze the client account while they investigate what’s happening. Once your account is frozen, you can no longer accept credit cards for your product, and you even lose all access to any money that is still being held by Paypal. It doesn’t matter if it’s $100 or $100,000, once Paypal freezes your account you have no other recourse but to wait for them to finish their investigation into your transactions.

As I said, when you are just getting started, Paypal can be a quick and easy way to accept credit cards, but I don’t think they are a good long term solution. You need to move to your own merchant account for credit card processing as quickly as possible.

Where Can You Get A Merchant Account

Just do a quick search for merchant accounts or merchant account reviews and you will soon see that there are literally hundreds of businesses offering merchant accounts as well as payment gateways and all the ancillary services that go with accepting credit cards or digital checks. If you don’t want to deal with an online firm, there is a good chance that your current personal bank can offer you a merchant account.

Once you’ve decided on a merchant account provider it is really quite simple to add a shopping cart to your site and start accepting credit cards. With some of the companies you can have this set up in as little as 10 minutes.

So, don’t think that you need to be a large established business to be able to accept credit cards. Merchant account providers are happy to work with even the smallest online businesses. The upside is that since people are more likely to have a credit card than a Paypal account, you make the transaction process both easier for the consumer and give your business more credibility in their eyes. Don’t lose sales because you can’t accept credit cards. Get started with a merchant account as soon as you begin selling your own product.

One Response to “Why You Need A Merchant Account”


  1. Looking to launch my own online product to hopefully take my income generation to that next level. Doing some research on merchant accounts and there are some really great services that can cater to the specific type of product you are selling. Since my product would be a digital on I am looking at merchants like eJunkie that specialize in those types of products.

    I really dislike Paypal, and not only had some of the problems you have mentioned, but unexpected fees and problems with their customer service really put me off on using them, especially for something as important as my business.



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