Make Money Online - You Probably Need A Merchant Account

It seems everyone is trying to make money online. As businesses are started, and products and services are put up for sale, there is usually a common question in the not too distant future, "How do I get paid?" Considering the hazards of checks and money orders, the most logical choice is to start researching merchant accounts. If you're seriously thinking about getting into the burgeoning Internet marketplace to make your fortune, here are seven things to know about online merchant accounts.

1. A merchant account is a way for merchants (ie. you), to be able to collect the money someone owes you after they buy from you or hires you. It contains two separate entities: one that processes and clears the payment, and the second one that actually funds your account.

2. They can be very expensive. Read the fine print. Look at "discount points". Who knows why they call them discount points, because they have nothing to do with a discount. This is the percentage of the sale that you are charged for each transaction. These points average 2.5 to over 6.0 in some cases. They usually vary from bank to bank, but no matter what, American Express is always the most expensive - which is why many stores don't take Amex cards.

3. Read the fine print. (Did we say that already?) Many of these accounts are more concerned with the money they collect from you rather than providing a service to you. Before signing anything, make sure you aren't locked into a contract with a heavy penalty for early cancellation. Sometimes you may end up in a two year commitment without knowing it.

4. Look for things in the agreement that talk about automatic checking account debits and charges. They already have your checking account information because that's where they deposit your earnings. Just make sure they don't plan on charging monthly maintenance fees or anything else they can conjure up.

5. As you borrow someone's glasses to continue reading the print that continues to shrink before your eyes, look for penalties and minimum monthly charges. Some merchant companies want to penalize you if you don't make enough money that month! Perhaps they have a $500 limit - if you don't process that much during the month, you'll be hit with penalty surcharges. Like you don't have enough to worry about as your business suffers, right?

6. You don't get paid right away! Unlike users of PayPal who are used to seeing sales appear in their account immediately, merchant accounts don't fund you for sometimes 7 - 10 days! Not fun. Especially if you really need the money to survive.

7. And rest assured, during your worst month in business, you will log on to see your checking account activity one morning only to find that you are overdrawn and heavy fees have been assessed by your bank! What happened? A customer wasn't happy and went to his credit card company to complain. Without even asking for your side of the story, the money is taken away from you. If you're selling products or services for substantial amounts of money, this can put you out of business if you have lost your operating capital. It can months to provide paperwork and information proving that the customer is wrong. And in many cases it won't matter. Merchant account companies don't give a blast about you, the merchant!

If you really want to check out a merchant account, stick with well known processors. Just know that to make money online with your own business outside of affiliate marketing, you will need a merchant account.

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