'I wish to implement online credit card processing for my website. How do I do this? Which one should I choose?' We hear this statement all the time! There are basically two ways of implementing credit card processing:
a) real time with merchant account from a bank
b) Third party payment gateway like paypal(www.paypal.com.au), paymate (www.paymate.com.au) and there are many other vendors.

Choice of implementation depends on the nature of your online business and estimated transaction amount per month. If you are starting out we usually recommend using the third party payment gateway like paypal. Implementation of third party payment gateway involves less development cost and you only pay percentage of transaction when someone purchases a product. What this means is if there was no transaction then you dont pay anything. Additionally, you do not have to buy "Digital Certificate" which can range from $100 to $1500 per year to implement third party payment gateway. Known brand for Digital Certificates are Veri Sign (www.verisign.com) and Thawte (www.thawte.com).

Implementation of real time payment system using Merchant account from a bank involves firstly, researching the right Merchant Account from a Bank. Selecting the right one involves a lot of time as you need to enquire with all the major banks the facilities they provide and also do your maths as cost varies from bank to bank. Bank charges administrative cost for establising Merchant account service. Most Bank requires you to sign a contract from 1 year to 3years and they charge monthly for Merchant account services irrespective you make any transaction or not. Banks further charge percentage of transaction depending on what you negotiated while signing the contract. To implement SSL (secure socket layer) you will require Digital Certificate which is renewable every year. There are also cases when your requirements could be complicated and Bank may not necessary support all your requirements and in this scenario you may have to signup with gateway provider like(www.eway.com.au) to implement your requirements. Before even starting the developement work you would have to pay close to $2000 leaving aside development cost. Implementation of Merchant account would be beneficial if estimated transaction ammount exceeds $10,000 per month. Some of the benefits of implementing merchant account will be when your business requires complicated model like for running a batch process, validating credit card for membership activation without account transfer and if you wish to retain the look and feel of your website and not go to some other website for payment.

If you are starting with online payment we normally reccommend to start with third party payment gateway for credit card processing. Implementation of Merchant account for credit card processing can always be developed at a later stage when your online business grows and you require more functionalities but doing the reverse could be a costly mistake.

Suraj Rai
NETable team.

[+/-] About the Author
Suraj Rai is a web consultant with NETable with over 5 years experience in the web industry and manages projects at NETable.

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