Most websites the average surfer will come across have some kind of revenue generating element contained within the site. The most obvious are the online shops which actively sell you products and accept credit cards online for payment. The advantages of taking credit cards online are obvious when you consider the latest research in to online ecommerce.

Research firm eMarketer predicts that 2003 will see online sales reaching US $58.2 billion excluding travel. According to Forrester Research business to consumer e-commerce will hit US $230 billion by the year 2008. While offline retail sales are staggering online retail sales will show a hefty 19 percent consecutive year over year growth. And by 2008, two thirds of all US households will buy some kind of products and services online. In 2003 alone 97 million consumers will make a purchase over the Internet.

So how do you start taking credit cards online? Well, the 2 basic options are merchant accounts and payment processors.

Bank Merchant Accounts

If you already have an established offline business, chances are you already accept credit cards and you have a merchant account from your bank and have some kind of electronic terminal in your shop/workplace for swiping credit cards through. Please note, if you DO have a merchant account already, you will need to apply for a new, seperate Internet merchant account. If you don't already have a merchant account, the system works like this - you apply for a merchant account from a bank (doesn't have to be the bank you currently bank with, but that is of course helpful) who supply you with a merchant account. This is just an ID or account number, but without it you can't take credit cards.

In addition, you will need a credit card processor (the bank will do this, or will recommend partner companies) who will then actually look after the transaction details. They will charge a fee which usually includes a setup fee, a monthly minimum and then a percentage (rates vary) of each transaction. You will need a merchant account to take Visa/mastercard etc and a further merchant account to take American Express.

Pros and Cons - It can take anything up to 2 weeks to apply for a merchant account, it's is unlikely you will be able to get a merchant account as a new business without a great deal of security, initial fees are likely to be high. On the plus side, once you have one you are in complete control of your business.

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Payment Processors

On the other side of the coin are the payment processors. The most common/well known payment processor is Paypal who built their business mainly through Ebay. Payment Processors essentially let you use their merchant account for a fee (which varies) and in most cases you can be setup within hours and taking credit cards right away. This is far and away the best option if you are just starting out in ecommerce.

Pros and Cons - Easy and fast to setup, fee's vary but are very competitive, good support and most shopping cart software is catered for. On the minus side you have far less control over pricing, discount etc than you would with a merchant account.

x2cms Credit Card Payment Processor Review

x2cms as an online retailer has used a number of different payment processors since it was launched. Here is our quick rundown on the good, the bad and the ugly -

Paypal

Best known through its rapid growth and use on Ebay, Paypal is the simplest and fastest payment processor to setup and use. The system includes a very handy "button maker" so you really don't need to know or learn any of the complicated in and outs of how to use it. For the more adventurous it does have all the powerful back end systems to communicate with your database through the IPN system. Recently Paypal dropped their system of only allowing customers to make credit card payments after they had authorised their account - which meant that customers had to wait till their credit card statement had been received before they could purchase anything. Now that this has been scrapped, Paypal is the ideal first choice for ecommerce users and their rates are low. x2cms rating - 10/10

More Details/Signup for a Paypal Account

2checkout

2checkout (2co) is an excellent payment processor based in the USA. Despite a few issues last year with denial of service attacks, this year it has been excellent and recently became x2cms processor of choice when we redesigned our own website. The ability to customise the payment pages was important to x2cms and 2co was the only processor we found where we had complete control over the design. Easy to use and setup it has it's own cart system and effortlessly handles recurring payments and integration with other carts. The fastest setup time we have come across (minutes!) plus good rates and fast payouts make it ideal as a starting point. Signup costs just $49. x2cms rating - 10/10

More Details/Signup for a 2checkout account

WorldPay

Worldpay is ideal for UK businesses and is part of the Royal Bank of Scotland. Its an excellent payment processor and the fees involved in startup can be quickly recovered. As a respected name in online payment processing, your customers should feel comfortable using Worldpay. Fully customisable, the features Worldpay offer can often overshadow our two top rated processors however this is reflected in the signup costs. x2cms rating - 9/10

More Details/Signup for a WorldPay account

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