Accepting Credit Cards-Third Party Credit Card Processors

Credit card processing

A third party credit card processor is essentially a company that accepts credit card payments on behalf of you or your company. In other words, your customers' payments are processed through a third party's merchant account, and you are paid by the third party processor (minus a 6% - 15% commission, of course). There is no need to pay for processing software, a virtual terminal or gateway, monthly fees, etc. You only pay a percentage fee on each sale. A third party processor, is basically a payment gateway and merchant account rolled into one. A third party credit card processor is a company that accepts credit card orders on behalf of other online businesses.

If you intend using a third party credit card processor that combines gateway services with a merchant account, added to the points already mentioned, ensure you also check on monthly gateway fees, AVS costs, and any other added fraud protection you wish to implement. A few examples of third party processors are Pay pal, 2Checkout.com and Click Bank. Third party credit card processors are the best option for small and just starting businesses, as well as for international (non-US) businesses where obtaining your own merchant account is too expensive or hard to get. Third party credit card processors are cheaper as long as your total sales are low.

Here are a few things to consider when researching third-party processors:

• How much is the set-up fees. • Transaction fees. • Are there additional fees for accepting online checks and telephone orders. • Settlement fees. • Pay Frequency. • Reliability. • Customer Service.

Third party credit card processor is a good choice for start-up businesses because of the relatively simple set-up and commission structure favorable to low-volume merchants. An established, high-volume business will be better off with a "real" Merchant Account. As your sales grow, it will definitely be beneficial for you to open your own merchant account, but in the mean time you could save money with third party merchant account if you do not generate a lot of sales.

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