Accepting Online Payments and Selecting the Right Merchant Account Provider


The process of setting up online payment may appear confusing at first, but the hard work is choosing the right service provider. In my search I spoke to everyone from sales agents to bank representatives and I now have a collection of contracts with    best high risk payment processor   very tiny print. I put together a summary of the process, things to watch out for, and a comparison of rates. I hope this helps.


Customer enters payment information into our secure site (aka Shopping Cart/Checkout).

The payment details are sent to the Payment Gateway for approval.

Gateway forwards the transaction to our Merchant Bank.

Our Merchant Bank forwards the transaction to the Credit Card Issuing Bank for verification.

Credit card bank verifies transaction and sends response code (Approve, Deny) back to our Merchant Bank.

Our Merchant Bank forwards the response to the payment gateway.

Payment gateway stores the results and response back to our online store. Payment information is displayed to the customer; i.e. “credit card was charged”, “credit card was denied”, etc.

This process happens in a matter of seconds.


Banks. Most banks use First Data Corporation network for their credit card payment process. FDC network clears about 80% of all credit card transaction. Merchant Service Providers (MSPs). I refer to them as Vendors in this article. Advantages of MSP over Banks:

MSP have many bank affiliates and third-party account database, which mean higher approval rates (especially if your business is considered high risk).

MSP will make recommendation on the best suited solutions or packages. Banks are limited on options.

Better chances of negotiating lowers rates and contract terms with vendors than at a bank.

What are the requirements? Requirements vary depending on the provider and the amount of risk they are willing take. Three vendors told me they only needed a Tax ID or SS#, business checking account, and an address (which is not completely accurate). I later found out that the vendor submits our application to the underwriter and the underwriter will request additional information for approval. Most underwriters will ask for both application and website information as follow:

The Applicant & Business Info:

Applicant must be a principal owner of the business

Business License (Tax ID) or DBA (SS#)

Checking Account


Driver’s License and Contact Info of Principal

Credit check – for new business, the personal credit history is a influential element

On the Website

Must be a live site

Company name or DBA name on the site

Shows Product and Price

Terms of Service

Return/Refund Policy

Shipping Methods

Privacy Policy

Contact info for support (email, form, etc.)

Working Shopping Cart/Check out page Ë Secure

Alternatives Service Providers Alternative payment service such as PayPal, Google Checkout and Amazon FPS are becoming more and more popular with new small businesses. These companies provide packages that fit most business model, they are simple to implement, low cost, and you can get started almost immediately.


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