There are a number of services enabling websites to accept payments securely online, each offering different features along with varying rates. This post summarises the two main routes you can go down:

1) Separate Gateway & Merchant Bank Account

The payment gateway can be seen as the virtual card machine, which bolts on to the site and securely transmits and verifies card details. A leading example is SagePay, who are our recommended choice.

To use a provider such as SagePay you also require a merchant bank account, which uses the encrypted data provided by the payment gateway to accept or decline a transaction. This then issues a response back to the payment gateway and collects/reserves the funds if successful.

Your existing business bank or card services provider can provide you with a merchant account but shop around for the best rates. (Streamline card services also offer a merchant account with no setup fees for FSB members, yet this may not be the cheapest per transaction)

2) Or – All in One Solutions

A quicker and simpler way to get setup accepting payments online is to use an all in one service such as PayPal or Nochex who handle both parts of the transaction. There are usually fewer hoops to jump through to get set up but for larger volumes this is not going to be the cheapest option. With PayPal being so widely used and enabling customers to pay for goods using their PayPal balance it can be wise to offer this option alongside a dedicated payment gateway for PayPal account holders.

So which is best?

If you are serious about selling online then setting up a separate gateway and merchant account is the way to go as not only should it be cheaper in the long run but also a more professional approach. However there is usually a minimum contract term, setup fees as well as credit checks involved to acquire a merchant account.

This entry was posted on Saturday, September 19th, 2009 at 10:33 am and is filed under Web. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.