FutureQuest, Inc. FutureQuest, Inc. FutureQuest, Inc.
Accept Credit Cards without a Merchant Account
Posted on 28 October 2003 09:15 AM

This tutorial will help to explain ways you can accept credit cards on-line without having your own merchant account. Many are surprised when they find out that they do not need a merchant account or expensive software to accept credit cards on the Internet. A credit card processing service will allow you not only the ability to accept credit cards online, but will also help you to avoid paying for special software, application fees, setup fees, monthly fees, gateway fees, a secure server, or even minimum transaction fees! The majority of third-party processing services only require a percentage of your transactions, however, this percentage is about four times the amount it would be if you had your own merchant account. Though, at the same time, it allows you to owe nothing if you sell nothing. It will be up to you to take the time to do the math and consider the costs involved with obtaining your own merchant account, and then compare those costs to the percentages of sales that a third-party will require. It all depends on your own volume of transactions and needs. For some, having their own merchant account is the obvious choice. For others, a third-party processing service is best.

Third-party merchants (companies who accept credit cards on your behalf) are useful for:

  • Those who would rather not work with credit card numbers provided by visitors nor handle the transactions.

  • Those who do not wish to obtain, or do not have, a Secure Server to accept the credit card information.

  • Those who have less than $1,000 in transactions each month.

  • Those who may have difficulty in obtaining their own merchant account due to the type of business/organization they are operating, an unsightly credit history, or non-US businesses needing a US alternative.

  • Those who would like to first see if accepting credit cards will actually boost sales before obtaining their own merchant's account.

The advantages are that you simply link your products to the validation service that accepts credit card payments on your behalf. They check the card, process the card, and send you a monthly payment for the amount you are owed. This is a simple solution that is easy to set up and costs nothing to begin.

The main disadvantage is that they will charge a higher percentage for each transaction in comparison to having your own online merchant account. Third-party processing services are more of a stepping stone for your organization. Initially you will pay more per order but 100% less on setup fees, software fees, as well as owe nothing if you sell nothing in any given month. If your business is a success, you will pay a large setup fee for your own online merchant account, but then pay less per order. Again, the decision on which is best for you is all in the math and it will be important for you to sit down and calculate the advantages and disadvantages for each of your options.

If a third-party processing service is something you think may be a viable solution for you, visiting the following web sites will help get you started. This is a list of third-party processors that will accept credit cards on your behalf. As always, it will be important for you to do some homework. Compare their rules and prices and read any and all small print. FutureQuest® does not recommend or vouch for any third-party processor. This list is provided for informational purposes only and is supplied in an effort to help you realize more of the options that are available for your own success. The information and fees provided below are what was listed on the processing service's web site at the time of this article. Visiting the web site and seeking out this information from them will assure accuracy.

ProPay.com is for any type of business that requires instant credit card processing services. Requires a postal payment of $35 to be activated. One-time $35 activation fee plus 3.5% of total sale and $0.35 per transaction.

2Checkout.com is for any type of business that requires instant credit card processing services which can be setup in 3 minutes! One-time $49 activation fee, and 5.5% plus $0.45 per sale.

CC Now for any type of business. The cost is 9% per transaction and only 8% during the November and December holiday season. CC Now also provides complete solutions for online auctions.

Credit Card Billing (CCB) for companies who are selling website content or services. Requires 5% holding of first 26 weeks of sales as charge back protection. Percentage of sale varies around 14.5%.

Register Now for software/shareware vendors. Costs are 20% per transaction or 21% per transaction if they provide the download site/bandwidth for the software.

Clickbank is for businesses that deliver unique products or services over the Internet itself (via web pages, files, or email). Clickbank is not for businesses that ship products or provide other offline services. Clickbank has a one-time $39.95 activation fee, and a $1 + 7.5% fee per sale.

Shareit is for developers of shareware applications. Shareit will also provide a download site for your application as well as the registration/payment service. $2.95 plus 4% for the first 1000 transactions and $1.95 plus 4% for each additional transaction.

Visage Services for developers of shareware applications. Transaction fees vary. Average transaction fee is $3.00 plus 3%.