Q:  The question I have is in terms of merchant accounts. Should I try and set up my shopping cart to accept credit card versus PayPal? What do you recommend? I looked under the 1ShoppingCartOnline and they said that they takes all sorts of merchant accounts and it is like $99 setup a year or something to go through them. That seems really expensive to me. When I looked at PayPal, they have offered different ways to get setup. Do you have a recommendation on where there is an inexpensive vendor to get merchant account?

Here are a couple things I want to give you to think about when it comes to merchant accounts. It may not be a bad thing if it is expensive to setup. You do not want to mess around and try to find the cheapest solution for your merchant account because it may not be beneficial for you down the road. There are a number of things you got to take into consideration. Number one, the amount of transactions you expect to do each month, so the number of sales. You also have to factor in what the revenue amount is. So it is not the number of sales but the volume of sales. For example you may have 10 transactions but they may be at $1000 each so that is $10,000 a month or you could have 100 transactions at $100 apiece. Those are there are two very different scenarios there.

A merchant account will look at both of those. In addition, you want to look at the amount that you are going to be charged per transaction and the amount that you are going to be charged to process that order, i.e., how much does it cost for your credit card transactions, for MasterCard, VISA, and American Express, Discover and so forth. All of these play a major factor because I have heard a number of horror stories especially in my particular industry when you are processing a lot of revenue perhaps during a confined period of time because you are doing an online promotion. For example, you may process tens to thousands of dollars in a short period of time. Now with any normal merchant account, a red flag is going to go up if they see a completely different level of activity from what you are used to. They are going to freeze your account and all of a sudden now you cannot process anymore orders which is a catastrophe.

The other major thing that I have seen happen and many of my colleagues have experienced is where they will process a lot of money all at once and then the merchant account will freeze the account and they cannot get any of that money out. It goes in to a waiting period of like six months where they cannot even touch that money. So you have to be very selective of which merchant account you use because it can mean a lot of things to your business.

One merchant account that I highly recommend is PowerPay.biz. You want to talk to Jud Smith. He provides merchant accounts to a lot of information marketers, coaches, small business owners and so forth. They are well established, very respectable merchant account provider. In addition to that, they have great rates. So their rates are exceptional when it comes to the amount that you are paying per transaction with credit cards. In addition to that, they understand the fluctuations that can sometimes happen with online promotions, teleseminars and things like that. They are very sensitive to that and are keenly aware of the flow that some of these businesses have and are not trigger happy to freeze an account. In my opinion they are probably the best solution as far as merchant account providers go.

The next one is PayPal. I use PayPal in addition to the merchant account that I have primarily because there will always be a percentage of people that prefer paying through PayPal. It is good to give them that option and when you are getting started. PayPal is great because there is little to no fees to get up and get going. My recommendation though is to look to get setup with PowerPay.biz.

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