Canadian Internet Merchant Account Services
September 27, 2008 by Admin
There are basically 2 types of internet merchant accounts.
- Third Party Payment Processors – like PayPal, Google Checkout, 2CheckOut, etc.
- True Merchant Accounts – through a Bank or a Merchant Account ISO
Side Note: Google Checkout is currently not available to Canadians
Third Party Payment Processors:
- Do not perform credit check
- Rates are not negotiable
- They can not be used with a separate processing gateway
- The Third Party Processor’s name appears on your customer’s credit card statement
- You can discontinue the relationship at any time without incurring a penalty
- It can take up to one month to receive any deposited funds
- Discount rates can be as high as 6% and $1 per transaction
- Purchasers have to go to a separate site for payment processing
- Promotes Third Party Processor’s business
True Merchant Accounts Processors:
- In applying for a True Merchant Account you’ll undergo a full credit check
- High risk businesses will pay much higher rates (usually 4%-12%)
- Rates are somewhat negotiable
- A Merchant Account can be used with a separate processing gateway (Most of the time, but some providers do require certain security standards and will only approve certain gateway providers.)
- Your Business Name appears on your customers statements
- You may be locked into a multi year contract (usually 3 years)
- Funds are usually deposited into your bank account within 1-3 business days
- Discount rates can be lower then Third Party Processors (usually 2-3%)
- Purchasers don’t have to go to a separate site for Payment Processing (major benefit – less shopping cart abandonment.)
- Appears more reputable & have ownership of the relationship with your customers right down to purchasing
Both Third Party Processors and True Internet Merchant Account Processors have their ‘pros‘ and ‘cons‘. Most Internet start-ups do not survive beyond two years. If you are only testing the waters then you may want to just start out with PayPal, where you will have no contracts and approvals are instant.
For those that are committed to building an online business then you will require true internet merchant accounts and the savvy merchants will offer both – they will let their clients choose which way they’d prefer to check-out. There are no rules saying, you can only have one type of processor when it comes to internet merchant accounts.
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