So you are looking to grow your new or current online business? You need to accept credit and debit cards, but what is the best option for you?
There are two main options; a traditional merchant account or starting a Pay Pal account. Which one is best for your business depends on several factors, including the volume of transactions you will have, how customized you want your check out experience to be and your budget.
With a Pay Pal account a customer makes a purchase on your website and they are then redirected to Pay Pal. Once there, they enter their financial information where it is processed through their own merchant account. One disadvantage is that you are not in control of the customer’s checkout experience. Pay Pal does not charge a monthly fee but rather charge a percentage of each transaction. While Pay Pal is well known and trusted by most online shoppers, the extra steps while checking out can often result in abandoned shopping carts. Another issue with Pay Pal is calculating shipping. They offer several shipping options but cannot calculate specific shipping amounts which can be a real problem depending on your type of business. PayPal also reserves the right to shut down your account if they suspect fraud. While resolving the issue your funds are locked away and cannot be accessed.
A traditional merchant account is set up with a bank or other financial institution and a payment processing company. The payment processor accepts your customers’ card information through your website’s payment gateway. After processing, the funds are deposited into your bank account, usually within 2 business days as opposed to Pay Pal which first deposits the funds into your Pay Pal account and then transfers the amount to your bank account, which can take up to a week. A traditional merchant account will carry monthly fees, but in return your company gets a level of service and flexibility that Pay Pal can’t match. In the case of Frontline Processing we also offer a dedicated support team that knows your account and are ready to help. A traditional merchant account carries greater customer confidence and flexibility to create customer accounts, mailing lists and discount codes. Also, you can set up the shipping options in any way you like.
A traditional merchant account will also need a secure payment gateway to use with your website. You can be confident in the security that protects your customers’ data because it never leaves your own website except through the payment processor’s secure gateway. Payment card processing companies are held to strict industry standards about privacy, and will never share any of your customers’ data. PayPal has different policies about customer privacy. They openly state that they share customer information with their parent company, eBay and third-party market research companies.
Overall, Pay Pal is a common payment solution for small businesses who need a quick way to start accepting credit cards. A traditional merchant account is an excellent solution for businesses who need more options, flexibility and want an option that will grow with their business. Frontline Processing offers comprehensive internet gateways to use with your website combined with our credit card processing and other merchant services. We offer a one stop shop. Having all your merchant processing needs from one source that offers superior customer service not only saves you time but frustration of dealing with multiple service providers.
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