When setting up an ecommerce merchant account or when accepting credit cards online, you usually have two components, the merchant account itself and what’s called a “gateway account”. If you have done any research into this topic, you’ll probably have heard of a few different gateway companies. This article is about the gateway account and how that relates to the internet merchant account.
A gateway is a software package that allows transactions to get from your customer through the internet to the merchant bank for processing. This gateway also makes sure the transaction is submitted using encryption so that there is a significantly less chance of any financial data being lost along the way. There are dozens of pretty good gateway companies out there but probably one of the more common gateway companies is Authorize.net.
One of the features of a gateway company is the ability of the merchant to run transactions manually assuming a phone / fax or even a “live” transaction needs to take place before a product or service can be delivered. The virtual terminal is usually accessed via the login to the gateway and an easy link is there to allow the owner to input the credit card information and the billing information as well to process the transaction.
The fees for the gateway account are typically around $.05 to $.10 per transaction, about $15 or so per month and a setup of around $100 or so. Of course this will vary based on the pricing of the reseller, but with most gateways, it doesn’t matter where you get the gateway from as the provider is indifferent to who setup the account and will usually provide the same service no matter who the reseller was. Don’t get too caught up in the fees, but make sure that you’re getting a good deal. If you have a high ticket amount, the per transaction fee represents an extremely small part of the overall fees, so work on keeping your monthly fees lower. Try to keep your overall cost of processing transactions down.
As there are several different “layers” of credit card processing and several entities involved in the process, I’ll keep this simple. Most gateway accounts are compatible with only certain payment platforms. There are several larger payment platforms in the US for which most gateways are “certified” or able to send transaction information to. If the gateway is being advertised by the merchant account company you’ve selected, you shouldn’t have any problems getting setup and won’t even need to worry about the payment platforms. However, if you are using a lesser known gateway provider that is only certified with certain types of payment platforms, you may need to double check with your merchant account that they can setup accounts on a compatible platform. Again, this doesn’t affect most merchants and unless you are using a custom coded solution, you’re very likely to end up with a competitive gateway that will be very compatible with any merchant account provider out there (such as Authorize.Net).
If your account is setup as a retail account where you are paying a “swiped” rate for transactions where the card is physically present at the time of the transaction, you can setup your account so that it is a “card present” account and still use Authorize.Net. They have an option for a USB card reader which uses Internet Explorer and an ActiveX component so that the card data typically sent via the phone line or internet line through a credit card terminal can be sent via this secure Authorize.Net / ActiveX component. This USB reader typically costs about $50 or so. Keep in mind that this requires your internet connect to be available. This works very well for trade shows if you have some wireless internet card on your laptop or other internet access. The advantage is not only in time, but also should reflect a cost savings for you because you’ll be charged the “swiped” rate instead of the card not present rate (which is more expensive).
Some payment platforms will allow you to submit transactions directly from your website or web server to the gateway. This would mean that the code on your website itself would be acting in much the same way the gateway acts. This does typically require some expertise in custom coding a website and shopping cart. If your business processes a lot of transactions, and I mean a lot, then this may be a solution that you should look into. You’ll also want to check with your payment processor on this fact as well. They should be able to tell you if this is even possible for you based on the payment platform they’ve setup your account with.
In conclusion, the gateway account for most merchants is a valuable component to any ecommerce or online payment processing situation. This is typically very easy to setup and most merchant account service providers can set this up for you at the same time as your merchant account is setup. And, some can even do this for less expensive than if you were to contact your gateway provider directly. This is based on volume discounts that some of the larger providers can get with the gateway companies. This is pretty easy to get setup.
If you enjoyed this article, I have put together a couple of videos on Youtube the explain more about internet merchant account basics and all about setting up an ecommerce merchant account. If you are a business owner, repricing your existing merchant account could very well be the most effective use of your time related to your earnings per hour.
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Tags: Accept Credit Cards, authorize.net, checkout process, eCommerce, internet business, internet credit cards, Internet merchant Account, merchant account, online business, online credit cards, online payment processing, online payments, Shopping Cart, website