A Guide To Online Payment Processors
Below is a MRR and PLR article in category Internet Business -> subcategory Other.
A Comprehensive Guide to Online Payment Processors
Introduction
When running an online business, selecting a credit card processing company is a crucial decision. It can be costly, so understanding your options is essential. You generally have two choices: free accounts or dedicated merchant accounts. Here's what sets them apart.
Understanding Merchant Accounts
Merchant accounts, such as those provided by ICann, WorldPay, or 2Checkout, require you to register as a legitimate business. This involves paying a setup fee?"often several hundred dollars?"and an annual subscription or support fee, typically a few hundred dollars more. Additionally, a percentage of each transaction, sometimes up to 4.75%, is charged.
For small businesses, these costs can add up quickly, making merchant accounts a significant investment, especially if you're still testing the waters with your products or services.
Be aware of the policies of these accounts. For example, 2Checkout occasionally calls customers to verify receipt of goods. If verification fails for any reason, they may refund all sales and potentially cancel your account, as was the case with one online marketer who lost $5,000 due to a misunderstanding.
Exploring Free Accounts
Contrary to the term "free," these accounts do charge a percentage of each transaction, usually between 1.5% and 4%. The primary providers are PayPal and StormPay. Although similar, they have distinct pros and cons.
PayPal vs. StormPay:
- Fees: StormPay might charge slightly higher transaction fees, but PayPal often charges more for withdrawals.
- Security Policies: PayPal is quick to respond to suspicious activity, sometimes locking accounts even when no foul play is proven. Personal ID verification can be strict and sometimes arbitrary, as experienced by a small-scale eBay seller.
- Reliability: StormPay links your credit card and address during setup, ensuring a smoother user experience. It is known for its fair handling of security issues.
Market Presence:
- PayPal is the industry standard.
- StormPay is rapidly growing and gaining market share due to its efficient sign-up process.
Considerations for Refunds and Geography
Regardless of your choice, remember that most processors will favor customer refund requests unless you provide substantial proof otherwise. This typically requires tracking and delivery confirmation for tangible goods.
Geographic restrictions also apply. Many free services don't support payments from regions like Central Africa or Southeast Asia due to high fraud levels.
Conclusion
If you're just starting your business with limited clientele, a free account like StormPay is advisable. As your business expands, you might consider shifting to a dedicated merchant account for added functionalities.
For StormPay registration, you can use this link: [StormPay Signup](http://www.stormpay.com/?2430996).
You can find the original non-AI version of this article here: A Guide To Online Payment Processors.
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