Credit Card Merchant Account vs. 3rd Party Processor

Business owners should be glad to know that by hiring the services of a third part credit card processor they will be able to accept transactions through credit cards. Merchant accounts are not easily obtainable for all businesses that need to process credit card payments.

Banks are reluctant as there are no signatures involved nor is the card present in such transactions. A third party processor is basically a merchant account cum payment gateway rolled into one.

Let’s read more about third party processors and credit card merchant accounts-

1. A Boon for New Businesses

Small businesses that are launching a new product in the market can avail the services of a third party credit card processor; usually, they are not sure if their product will do well in the market or not. A third party credit card processor will accept orders by credit on behalf of the business.

2. Select a Merchant Account or a Third Party Processor

If the sales volume of a business entity is less than $1000 a month and it has limited funds, then it should venture out with a third party credit card processor in the first stage. They might charge more than a merchant account but for a good reason.

3. Switch to A Credit Card Merchant Account As The Business Grows

Once the merchant feels that his business model is actually working, he can upgrade his business to a credit card merchant account. Some of these accounts also come with a shopping cart and don’t forget that time bound contracts are involved too.  

4. Things to Keep In Mind

Before deciding to go for a third party credit card processor, be very clear about the fees, the AVS costs and availability of additional fraud protection packages.