At one time, you needed your own merchant account in order to accept credit cards online. These days there are several 3rd party credit card processing services you can use instead. It's a development that has revolutionized the Internet, making it easy for anyone to set up shop and sell their own products.
Credit card processing services take a percentage of each sale, usually in the region of 5-15%. They generally also charge an additional dollar amount on each transaction, typically between $0.50-$1.00.
Although it may not appear much at first glance, it's considerably more than you would pay with your own merchant account, and so usually not the best long-term option if you make many sales each month. But there's no easier, cheaper, or better way to get started!
Many of the credit card processing companies also include advanced services at no additional charge. For example, in addition to processing card payments on single charge items and services, some of them also provide you with full shopping cart functionality, membership site management with automatic assignment of passwords etc., recurring billing for subscriptions, and more.
Below are my recommend 3rd party credit card processing services. I've listed them in order of what I consider the best choice for the average person in terms of the services offered, ease of use, and overall cost:
- 2CheckOut - intangibles and tangibles (digital and physical goods)
- Verotel - intangibles (and tangibles with subsidiary, Verza)
- ClickBank - intangibles only
- DigiBuy - intangibles only
- CCNow - tangibles only (physical goods)
- iFulfill - tangibles only
ClickBank also sets you up with your own affiliate program to promote whatever you sell. It's basic, but free (if you don't count the $49 it costs to open an account). You simply set what percentage of the selling price is to be paid as commission, and ClickBank take care of the rest. Everything, including affiliate payments, is handled for you.
This combination has made it the most popular choice amongst internet marketers selling digital products like software and ebooks, etc., despite its higher rates. The downside is that unless you buy third party software enabling you to sell multiple items from a single account, you'll need to open a new ClickBank account for each product. On top of that, the sales links you provide to your affiliates all point to the ClickBank site. In other words, you'll be building ClickBank's link popularity, not your own.
To be honest, although touted by many as the best thing since sliced bread, unless you particularly want the included affiliate program functionality (which is good in the sense that it enables anyone to sell your products without having to join your affiliate program), I'd choose one of the other credit card processors listed above. Your rates will be lower, you won't be restricted to single-item purchases, and you'll have a more professional-looking order form (ClickBank's is pretty ugly).
If you need affiliate program functionality, but want more control over your affiliates check out Verotel. Although per transaction rates are slightly higher than ClickBank's for low-volume sales, opening an account with Verotel is free, and they too have affiliate program fuctionality built-in, but one that you can manage independently, while Verotel pay the commissions for you.
I feel 2CheckOut is probably the best 3rd party credit card processing service, but on the downside it's only a credit card processor; there's no integrated affilate program. However, they offer a wide range of services including shopping cart, have the best rates, good fraud protection and offer full support for most third party affiliate software.
Later on, if you are selling in large quantities, need more options, and have the budget, your own merchant account may be the best way to go. Beware though that there are a lot of scam artists in the merchant field. And many companies charging over-the-top rates.