merchant accounts, payment gateway services

Before you can start trading on the internet, you will need to set up a means of taking payment.

Many people will use Paypal, particularly if they are testing the market, or if the volume of transactions is likely to be low. The advantage of using Paypal to process online payments is that there are no setup costs. All you need to do is create a Paypal account and link it to a bank account, a very quick process. The disadvantage is that Paypal transaction charges can be quite high.

If you are confident that your market will establish quickly, or if it is already established, you should consider using a dedicated Payment Gateway Provider, which will offer a more robust and refined process. The options open to you depend on the likely volume of transactions, and their value.

If you take this route, you will need an Internet Merchant Account. You may already have a Merchant Account for a card payment terminal, if you have a shop, but this will not be sufficient.

Your bank will most probably be able to offer you an Internet Merchant Account. Some Payment Gateway Providers offer services which integrate a Merchant Account, meaning you don't have to have your own.

In my experience, high street banks levy very steep setup and transaction charges. Also, dual purpose Merchant Account / Payment Gateway services can have higher transaction charges.

Often, a combination of separate Internet Merchant Account and Payment Gateway Provider is the most cost effective option. If you are a member of the Federation of Small Businesses, you should be eligible for preferential Internet Merchant Account rates through Streamline ( as well as free banking with the Co-op ). This, combined with Sagepay's Go service is an ideal starting point for many people.

I have implemented systems from a number of payment service providers, and have consistently found Sage Pay's framework and customer service to be the most satisfying to work with. This, coupled with very cost effective pricing, makes Sage Pay my default recommendation to those wishing to sell via the internet.

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