Ok, so you've spent the last few weeks developing your new ecommerce storefront. You started with a piece of open source software, like osCommerce or Zen-Cart, and you customized it fully to adhere to your business model. You've integrated your professionally designed template, you've added all of your products and descriptions. you've search engine optimized all of the pages, adding dynamic meta title tags and good internal link structure. You've got just about everything figured out and developed....except how are you going to collect the money? Obviously, you're not collecting cash here. you're going to want the ability to accept credit cards.


Allot of people are going to immediately point you to PayPal. And for a start up company, with no advertising budget and low sales expectations for the near future, this is an excellent suggestion. However, you have to keep in mind that some customers are going to be turned off by being sent to a third party website to make their payments. Not to mention that using PayPal will make your checkout process a few pages longer than it would be otherwise, and everyone has heard that a longer checkout means more abandoned carts and lost sales. So, if you really want a professional solution, you're going to have to look into getting a merchant account and payment gateway.


The merchant account an payment gateway from has changed a great deal in the past few years. it used to be that if you wanted a good payment gateway, like authorize.net, that you were going to pay a couple hundred dollars for a 'setup fee'. Luckily for us, nowadays you can get free setup of a payment gateway when you open a merchant account. The merchant account and payment gateway fee structure works similar to the way PayPal does, in that they will charge you a percentage of each transaction, plus a per transaction fee. The best ones are normally around 1.25% of each transaction plus $0.25 per transaction. PayPal's fees are a bit higher than that, however a merchant account also charges a per month fee, usually around $20-$30. If you're going to be processing allot of transactions, like over $1000 in transactions per month, then you'll probably save money with the merchant account and payment gateway, otherwise it will probably be less expensive using PayPal.