Your eCommerce Website and Accepting Credit Cards

The article, “Accepting Credit Cards and PayPal on Your eCommerce Site” by writer Rich Mintzer  provides a good understanding for someone starting an online business focused on eCommerce sales. The article suggests that in order to set up a credit card account on your website, the most commonly used methods of accepting these credit card payments is by either using your own merchant account, or by using a payment gateway account  (third party merchant).

Providers such a PayPal or Authorize.Net can assist to help you set one up and offer a payment gateway in a convenient package. Unfortunately, credit cards are not cheap to process. There are monthly fees for small volume accounts (less than 1,000 monthly transactions) ranging from $10 – $100 while also including transaction fees of about 3-5% per transaction.

The article describes advantages and disadvantages to merchant and third party accounts.

Some advantages of merchant accounts include:

  • Ease of transaction
  • Protection. FDIC protects bank
    s and there’s fraud protection for merchant accounts.
  • You maintain control because the transaction is between the customer and your merchant account so there’s no intermediary handling.
  • Typically receive payments quicker rather than using a third party payment service.
  • Your business name is on the transaction statement

credit card - eCommerce

However, there are disadvantages for merchant accounts such as cost, handling disputes (e.g. chargebacks or fraud/security issues), and hidden fees.

Third party merchant account advantages include:

  • Not needing approval for merchant services by a bank. Low credit scores or no credit does not mean you won’t be approved.
  • The third party can play the middleman when disputes arise. It’s reassuring to have the company backing you up.
  • PayPal or Authorize.Net are well known and trusted for service transactions.

Along with advantages, the article states that third party merchant accounts also do come with disadvantages such as potential higher fees, their own company name is on the transaction, and some company’s reputation for having fraud backgrounds.


In the website design industry, building an effective and efficient eCommerce website requires a secure and reliable third party merchant account such as PayPal or Authorize.Net. Both are great to have featured on your website, however, we typically use Authorize.Net when possible because it is a great credit card processor and is easy to implement, saving time and money. PayPal is more difficult to implement and takes a larger percentage of each transaction compared to Authorize.Net, thus raising costs. However, PayPal can increase the ease of checkout because users don’t need to give their credit card or other bank account information to the end retailer. This makes one feel more secure about making payments.

Also, it’s important that each eCommerce website integrates the transaction process (shopping cart, secure checkout, confirmation, etc.) into the website itself, so users are not being brought to an external site. This can cause confusion, decreased customer experience, decreased user experience, and ultimately decreased conversions. A custom eCommerce solution can be a great fit for businesses looking to sell more online, but it will be important to find a company to partner with that is great in custom eCommerce development.

Read the full article. by Rich Mintzer

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