If you're interested in running any type of online business then the ability to accept payments via credit card, or through a merchant account, is critical. The question now arises: Why This is because of the fact that people just don't use money anymore. As a matter of fact we live in a plastic society, as evidenced by the mounting credit card debt in the United States alone. In addition, we are a people of the philosophy, "give it to me now, I'll pay for it later." In theory, it is doubtful that is going to change anytime soon.

Thats why, so just how do you go about getting a merchant account and what are the things you should know and look out for when doing so

For the start up, there are 3 ways to get a merchant account.

1. You cam get one from the bank you already deal with.

2. You can also use a broker or intermediary to gain your own merchant account.

3. You can also use a third party service.

Of all the above three mentioned steps, the easiest way of course is to get one through the bank you already deal with. But the fact remains that most of the large banks are reluctant to give merchant accounts to new small businesses. As a matter of fact many banks require up to 12 months of audited accounts of your business. According to experts, if you're just starting up, this of course, is not possible. Blame it to the greater risk of fraud, since the card does not have to be swiped and signed for, banks are very reluctant to give merchant accounts to new businesses. It is worth mentioning in this regard that though banks are starting to come around slowly but given the economic climate of today it would probably be a better choice to get a merchant account through the second method mentioned above, and that is through a broker or intermediary.

According to experts, these brokers or companies form what they call a defense between you and the bank. As a matter of fact they will pitch your business for you and put you in the best possible light. In other words, they will try their absolute hardest to get that account for you. Thats why, the best way to get approved through this method is to minimize the risk of your business as much as possible. Theoretically speaking, if a broker can convince a bank that this is a good investment for them there is a much better chance of you getting the account. If experts are to be believed, the best way to minimize this risk is to start off by selling low priced items, say around the $10 range. It is worth pointing that this is much less risky than trying to sell an item that goes for several thousand or even hundred dollars. Another way by which you can show minimal risk is to show that youre financially solvent, that you don't have a lot of debt, that your mortgage is paid, etc. This process will add your reputation and will make you very attractive to a bank. Moreover, including guarantees with your products is another way to make you look more attractive to a bank. With the entire above mentioned steps, if you do get accepted, you will also find that you get a much better rate.

The third way by which you can get a merchant account is to use a third party service. In this scenario you don't actually get your own merchant ID but use the merchant account of another company. According to experts, this is actually the easiest of the 3 methods as it usually takes only minutes and is many times free or can be gotten for a small fee, but there is a negative side to going this route.

In theory, where with getting your own merchant account you are paid in 24 to 48 hours, on the other hand with third party accounts it can take up to 28 days to get paid depending on what company you are dealing with. Clickbank for instance pays every 15 days or twice a month.

Another negative aspect, and this is quite a big one, is that the fees charged by third party companies are much higher than fees charged by banks. For instance, Clickbank charges around 12.5% for each transaction on average. On the other hand most banks charge around 5%. In theory, this can really eat into your profits.

In addition, also there is the problem that when dealing with a third party company you are sending visitors to THEIR web site and therefore are not as much in control of things as with your own bank. As a matter of fact this makes you look less professional in the eyes of your customer. Because of all of the above-mentioned steps it is advisable that you use a third party company as a last resort.

Yes, there is no denying that getting a merchant account is great for doing business online. But one can easily make up the point that getting one is not as easy as it looks. So its your responsibility to spend considerable time on this part of setting up your business. It is worth noting that it could mean the difference between making a profit and not.

Every individual that runs an online business has to answer the question: which merchant account provider should I choose In theory, there are literally thousands of providers out there that offer similar services. But while choosing you must take into account price consideration first.

Fact remains that providers have a wide array of fees that they access. Moreover, most providers require a setup fee for the service and then a monthly fee. Its amazing how much some people are paying for these services! It is advisable to look for a company that doesnt require a setup fee and has a low monthly payment.