Whats the best Payment Gateway & Merchant Account to use for my new internet business

I think that the best gateway and merchant accounts will differ for each business. I can give you some criteria to help you evaluate what is best for your business though.

Payment Gateways

A payment gateway is basically your online credit card terminal. The most important feature of a payment gateway is that it works with your shopping cart software. This will eliminate a good chunk of payment gateways. Second you want to eliminate payment gateways which don't meet your other requirements. Do you need recurring billing, virtual terminal access, echeck, certain payment cards? Comparing some features like fraud detection/online account access/customer service may be a little more difficult to quantify and compare.

Finally once you have a list of payment gateways that meet your requirements, you can compare fees (setup fee, monthly fee, transaction fee, etc). Some gateways/merchant accounts also have some kickbacks that you might want to consider as well (i.e. Google Checkout's Adwords Credits).

Merchant Accounts

I think that merchant accounts are a little bit easier to compare because it's more about the fees. In this case, the cost of your products may weight in on your decision. Specifically the transaction fee usually has part fixed fee and part percentage. If you have a high average cost of your products, you want a low percentage and care less about the fixed fee. If your products cost only a few dollars, then the fixed fee is going to be more impactful for you. I suggest taking the average price of your goods and computing the transaction cost, and comparing that number between your options. Other fees you might have to pay with merchant accounts are statement fees, annual fees, and chargeback fees. One other thing that isn't always obvious is if the merchant account will charge you for your customer's rewards cards. Paypal does not pass this charge on the merchant account, but most will.

My Choices

For payment gateways, I don't think you can go wrong with Authorize.net. They work with almost every shopping cart, and offer almost every feature you could imagine. Their fees are fairly competitive. I don't have a recommended merchant account, because I haven't used enough of them to have a favorite.

One thing I have been experimenting with lately is using google checkout exclusively. I want to do this because it has a huge potential to save me money through the adwords kickback. I do worry that forcing everyone through the google checkout process may cost me some conversions, so I'm still testing this setup.

Hey David!

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Best Regards, Alex Hager Social Business Bank

http://www.1shoppingcart.com/ is pretty good, depending on what kind of internet service you are providing.