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Third Party vs. Merchant Account Payment Processing
...continued from page 1 Canadian payment processing

Canadian Internet Merchant Account Risk

A few examples of huge mainstream industries not able to be approved by conventional Canadian merchant account solutions are travel and tourism, second hand merchandise and auctions, telephone services, any service that relies on outbound telemarketing and a host of others as well as a few more obvious examples such as gambling and adult content. It is important to understand how the Canadian banking system operates in relation to online transactions and the securities they will require in order to approve an internet merchant account application.

With all of these hoops to jump through, and these just being the initial ones, you might ask why any company would bother with a professional merchant account solution for your online store. The answer to this goes back to the concept that the single most important obstacle that you need to overcome with your online store is to alleviate the fear of buying in your customer. A professional merchant account solution will allow you to present the most professional, most secure and best integrated payment processing experience possible.

3rd Party Payment Processing - Integration Importance

When a user clicks to buy through a third party payment processing solution they will be taken to a new web page where they can begin the payment process. The look and feel of this page will usually differ from your website greatly. This is the integration level touched on earlier, where a true merchant account solution will allow you to create a shopping experience where the customer is not redirected to another page, and if they are, the page will resemble the look, feel and dynamic of your website. This congruency of theme throughout the transaction process is critical in creating the confidence to buy in your customer.

Ultimately you can use either third party or direct merchant account solutions for your new ebusiness or both in some cases. The advantages of a low cost third party payment processing solution that is easy to set up holds great appeal for businesses just starting, but the reality is that most successful online businesses have their own professional merchant account solution to maximise the selling potential of the website. It all boils down to control.

Advantages Of Bank Direct Merchant Account Solutions

Control of the customer, control of the sale and control of the costs are critical factors when considering the validity of a true merchant account solution over a third party payment processing service. When just starting out online it can be quite acceptable to let your customer leave your website, and ultimately your creative and vested control, to complete the transaction with a third party service.

Once you have established your business online you will appreciate less and less the deviation from your website by the customer to complete the transaction, and the relative dependency on an outside party for the most important aspect of your online store - the sale. In the beginning third party payment processors provide a fantastic value and a low commitment approach to online credit card transactions. Once established online you may find the processing rates of third party processors too high and the integration and customization of the payment processing to be too limiting. In the event of disputed transactions you may also find that you have more flexibility and security with a true merchant account over a third party processing agreement.

Plan Ahead For Integration Of Your Payment Processor

Whichever payment processing method you choose for your online business you will need to integrate the solution with your website as well as any software that you will be using such as a shopping cart. You should choose software that will easily integrate with multiple payment processing solutions that you are considering for your business now and in the future.

The importance of addressing this issue now is that planning ahead can save you a huge amount of thankless work in the future should you want to make a major change to your website. Perhaps as a new business going with a third party solution would be beneficial to begin with, but you should be familiar with professional payment solutions as well. If your internet business does well you will likely want to switch to a merchant account solution in the future to get maximum control over your customers experience on your website without needing to rebuild your website from the bottom up.

When you build your website it will be important to choose software that will be compatible with more than one payment processing solution. If you have a shopping cart now that will work with a third party payment processing solution, you may find in the future that this shopping cart will not be compatible with a processional merchant account solution that is attractive to you. Since there are only a handful of Canadian merchant account providers and each one has its own unique application and technical criteria it will be important to know which merchant account solution you would likely work with in the future should your business grow.

There are far more shopping cart solutions than credit card processing solutions available for Canadian companies. Find which online payment processors you may work with and make this part of the criteria that you require when searching for your shopping cart solution.

Find out in page 3 of this article The fundamental difference between Canadian and American merchant accounts and why this is one of the most confusing issues involved with setting up a Canadian ebusiness.
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