Popular Alternatives to Merchant Accounts

December 28, 2006

If you are going to do business online, you are going to need a way to collect payments from your customers. The easiest and simplest form is PayPal. Alternatively, if you want control of the order process you will need a Merchant Account. Merchant Accounts can be costly and time consuming to setup, in addition you will need a secure certificate for your web host provider, and a business bank account. For a small business, or a starting business that doesn’t know how many orders they will be handling this step might be intimidating at first. Fortunately for you, there are great alternatives out there, that allow you to have more control over the order process, present a professional looking check out process to your customers, and handle credit card transactions of all kinds.

Most of these services will charge a small or no start up fee in order to use their service. They make money by taking a small percent out of every transaction made. You might think this isn’t fair, well even if you had a merchant account of your own, you will still have a small percent taken out of every transaction; it would usually just be a smaller percent. These services handle the complete order process, and give you ways to track orders, refund orders, and handle the business side of things without worrying about the details. At the end of every month you get paid for the orders through check, or most of the time direct deposit. Some businesses prefer these services over merchant accounts for several reasons:

Lost cost to startup: initial startup fee, and small percent out of every transaction.
No software to buy or build, and no secure certificate needed: you use what the service already has.
Many of these services have advanced fraud detection systems: and they are good because they process many orders daily so they stay on top of the latest fraud techniques.
These services handle affiliate communities and payouts: Not having to worry about complicated affiliate software, and payouts.
Automatic handling of printing, stamping, and mailing CDs for software sales.
Easy to setup: no complicated installs or builds, just an online control panel.

Interested, Ok lets take a look at some of these services in detail.

RegNow

I have used RegNow in the past, and they are definitely in the top three, if not the best for selling goods online. They offer a low $19.95 startup fee, a great affiliate program, a low 6.9% + $1 order process fee, and an extensive control panel that gives you many options for your order process. The control panel is extensive, and once familiar you can control look and feel, confirmation emails, and more. RegNow also offers a CD service for businesses that sell software.

eSellerate

I currently use eSellerate for ComputerSmarts.net and BlueCrestStudios, as they are geared more toward software sales. They have a 10% service charge of all orders placed, and no sign up fee. eSellerate differs from the rest by offering a licensing SDK for software developers, which handles the registration process for your applications. This can save a lot of money and time in the long run, which is the reason for their higher service charge percent from others.

2Checkout

With a higher sign up fee at $49 dollars, 2Checkout will only take 5.5% plus $0.45 of every order. I have never used 2Checkout, but heard good things. The service claims you can be up and running in a matter of minutes, which can be good for some. 2Checkout offers a unique membership service, which allows you to handle selling memberships to customers. 2Checkout does not handle CD sales.

Other notable services are:

Development