Accept Credit Cards Online

Even if you don’t have a merchant account!

By Diane M. Aull

Do you need to accept credit cards?

Whether you plan to sell an infoproduct, run online auctions, or ship out tangible goods (like craft items or gift baskets), if you want to be successful selling online, you need to be able to accept credit cards for customer orders. If you want to sell something downloadable, such as an e-book or software, it’s crucial.

For tangible goods and auctions, you may be able to get by with requiring people to mail you a check or money order, but, frankly, you’re going to limit your sales potential. Remember, if you make your sales process too difficult, there are plenty of other people out there in cyberspace who have made it easy. If you don’t accept credit card orders, you’re going to lose sales — potentially lots of sales — if you don’t accept credit cards.

For "infoproducts" and software, people generally expect to be able to download the product instantly. You essentially must accept credit card payments or you risk making no sales at all.

What are the options?

Traditional merchant account

Of course, the usual way for brick-and-mortar businesses to accept credit cards is to obtain a merchant account. There are tons of places you can do this. However, if you’re just starting out, if your personal or business credit isn’t all that great, or if the merchant account provider feels there is too much risk of fraud with your particular type of product, you may find it difficult to obtain a merchant account, or you may find yourself paying a higher discount rate.

If you go to your favorite search engine and type in "merchant accounts", you’ll probably find a long list of potential providers. You might also check with any professional organizations or business groups to which you belong. Sometimes they’ve worked out discount deals or other special arrangements with one or more merchant account providers. If you’re a member of a warehouse club, check with them as well.

A word of warning. Before you sign anything, make sure you’re clear on all the fees and charges. A business associate of mine once decided to apply for a merchant account from a particular provider based on that provider’s stated low fees — only to find out that the provider charged a not-very-well publicized (but rather hefty!) non-refundable "application fee" which was payable whether they approved your application or not. She was not a happy camper when she found out!

Third-party payment processor

You have other options for accepting credit cards online. While a merchant account will generally be less expensive, there are various reasons why a third-party payment processor might be more appropriate. The best thing to do is to review each processor’s offerings, fee structure and terms of service (TOS) very carefully to determine which one offers the best combination of features and price for your particular business.

You do need to be careful that you abide by their terms of service (TOS). For instance, don’t try to get away with selling goods or services that aren’t allowed by the TOS — and don’t assume that just because something’s allowed on one service, it’s okay everywhere else. If you do violate their TOS, many of these processors will not only disable your account, they may freeze the undisbursed funds that may be in the account at the time, and you may or may not be able to recover that money. Make sure that the products or services you want to sell are allowed by the processing provider that you’ve selected!

Here are a few providers to consider:

  • CCNow is an "online retailer" of your tangible goods. They only process payments for goods that can be physically shipped to a customer (no downloads, no site subscriptions or membership fees, etc.). There is a monthly fee plus per-transaction fees. You’re responsible for product fulfillment (i.e. shipping the goods to the customer); CCNow simply processes the credit card payment and notifies you that a sale has taken place. CCNow also supports credit card processing for online auction sales.
  • 2CheckOut will process credit card payments for tangible goods, services or subscriptions. As with CCNow, you are responsible for product fulfillment of tangible goods. Be sure to check their FAQs to find out what sorts of products and services are allowed and what sorts aren’t.
  • ClickBank is exclusively for downloadable digital products (software, e-books, etc.). You upload your product to ClickBank; they take care of processing the credit card payments and downloading a copy of the product to the purchaser. Once your digital product is registered with ClickBank, it becomes available to be promoted by their network of over 100,000 affiliates (you set the affiliate payout when you set up the product). They say that among their top-selling products, 75% of sales come from affiliate sites. There is a one-time setup fee for each product, plus per-transaction fees for each sale.
  • PayPal is the payment processing system just about everybody’s heard of. With a verified business account, you can accept credit card payments for single items or use the PayPal shopping cart system for multiple items. Many third-party shopping carts also support PayPal. Allowable items include physical goods, digital products, services, and donations. PayPal is owned by eBay, so if you’re a seller you can easily offer PayPal as a payment option for your auction sales. You can also send electronic invoices, which the recipient can remit through PayPal.
  • Google Checkout is a relatively new offering from Google. Customers pay for your goods and services through their own Google Account. Google Checkout integrates with AdWords and displays a special icon on ads run by Checkout merchants. Payment processing is fee-free through the end of 2007. The service includes fraud and chargeback protection.
  • RegSoft is also strictly for digital products. They don’t require any set-up fee or monthly listing fee. You pay only per-transaction fees. (So, if you don’t sell anything, you don’t owe them anything.) There is an option to make your products available on CD, and customers can order through their 800 number as well as online. Products registered with them are listed on the retail sales site, and you have the option of publishing them through the affiliate network of
  • SetSystems processes credit card payments for software. They can set up an online order form (you handle product fulfillment) or they can handle fulfillment by shipping CDs, offering downloads or sending software via e-mail on your behalf. They offer simplified submission to the major software download sites such as ZDNet, and others.

The bottom line

It’s pretty much a given — if you’re going to sell online, you need to be able to accept credit cards in some fashion. With all the payment processing options available, you can still offer this option to your customers or clients, even if you can’t qualify (or don’t want to pursue) a traditional merchant account.

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Copyright © Diane M. Aull, an online consultant for small and mid-sized businesses. For more information about her services, visit or BootstrapSEO. For resources and tools for home based workers, visit Torka's Home for Wayward Girls.

For any other intended use, you must contact me in advance. If you do use this article on your website, I'd love to know about it; please send me the URL!

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