It all started when one of my clients wanted to pay me with a credit card. It is odd that I have been in business for 18 years and this is the first time that I have been paid in this way. It is doubly ironic in that I used to teach classes on eCommerce back in the early days of the Web and hadn’t ever gotten around to getting a merchant account, which is what you need to take credit card payments.
If you want to accept credit cards, you enter a brave new world where there is an entire collection of jargon to use your secret decoder ring. For example, “discount rate” is the fee that the card issuer (like American Express or Visa) charges you per transaction. Typically these are anywhere from one to four percent, depending on a series of circumstances. Then there is the “virtual terminal” which is a series of Web-based services that allow you to enter the credit card number in your browser and have the transaction completed online. These replace the typical credit card swipe machines that you see in every retail shop.
Since my client wanted to use their American Express card, my first stop was to try my business bank, Bank of America, and see what they could offer me. Online had limited information but I tried the 800 number and got nowhere fast. They suggested that I talk to Amex and see what they could do for me. Within about 30 minutes I was setup with an Amex merchant ID and could start accepting their card via a telephone response number. The issue was that the transactions would take some time to clear and actually end up in my bank. They could also sell me their virtual terminal software, called Payment Express, which would be an extra charge of $20 a month. Amex has many different options that can easily get confusing – my recommendation is if you want to go this way, first sign up online to access your account and then read the various screens that describe Payflow, Payment Express and their physical card payment terminals.
In the interests of research, I pressed on to see what else is available.
Paypal was my next stop. While you can process some credit card payments, once you get beyond a few hundred dollars you need to have a Paypal business account. This means $30 a month, plus transaction fees of 2.4 to 3.1% to use their virtual terminal software. Here is a description of that process.
Intuit was next. Their merchant services are $13 a month, and it took about a day to set me up. They also have their own virtual terminal software and their home page takes something to get used to. They also charge less per transaction, with fees ranging from 1.9 to 2.9%. They have a great series of online demos here on their Web site.
So which do I recommend? If I had to start over knowing what I know now, I would go first to Inuit. They are geared towards their online product, they have a simple sign up process, and if you already use Quickbooks they can integrate with that too if you end up with lots of transactions. (I have been a happy Quickbooks user for nearly two decades, starting with the DOS version, can you believe it?) I would steer clear of Paypal, I just think they charge too much for too little.
There are dozens of other payment processors online, and this isn’t meant to be a comprehensive review. And feel free to share your own experiences on my blog or via Twitter.