Free merchant accounts - how to accept credit cards online with no ecommerce merchant account needed.

Free Merchant Accounts


You don't need an expensive regular ecommerce merchant account to start selling your products to Internet shoppers today. If you want the least expensive and easiest way to accept credit cards online, take a look at "free" merchant accounts - 3rd party credit card processors.

Only large volume trader would benefit from having their own ecommerce merchant account. With a free merchant account, you'll avoid the up-front expense and time required to set up ecommerce software, internet merchant account, customer service and more.

3rd party credit card processors are companies that accept credit card orders on behalf of other online businesses. They check the cards, process them and send you a monthly payment for the amount you are owed. They make their profits by taking a percentage of your transactions. If you sell nothing, you pay nothing.

Main reasons to use a free merchant account...

  • No need to pay for expensive processing software, a secure server, customer service fees, monthly gateway fees or minimum transaction fees.
  • With some of free merchant accounts there are no setup fees or monthly fees.
  • International sales.
  • No credit check.
  • Some of 3rd party credit card processors can run an affiliate program for you.
  • You can start accepting online payments within minutes.

The only disadvantage is that the credit card processors charge you a few extra percentage points on transactions in comparison to having your own ecommerce merchant account.

Perhaps the best way to look at using a free merchant account is to consider it as a stepping stone for your business. Initially you'll pay more per sale but with no setup fees. Then, if your business is successful and you perform a lot of high volume sales, investing in a real ecommerce merchant account for your company will be essential - you'll pay a large setup fee, but then pay less per sale.

Here are the most important things you should consider when searching for the right 3rd party credit card processor...

  • Setup fee - a fee that is charged to activate your acccount.
  • Transaction fee - a fee charged for each credit card transaction completed.
  • Reserve - many credit card processors temporarily hold 5-10% of your profits to use against future returns or chargebacks.
  • Ordering alternatives - some free merchant accounts allow you to collect payments via online checks, over the phone, by fax or mail.
  • Restrictions and limitations - do they handle only tangible goods, services or software? Is there a minimum and a maximum price that you can set for your product or service?

See Free Credit Card Processing for direct comparison of 3rd party credit card processors and their fees.

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