If you’re planning an online business or e-Commerce site that will sell products or services, or require membership fees to access content through the website, you must have a way to accept credit cards.
You simply won’t be successful if you expect your customers to stop using your site, write and mail a check, and wait for it to clear before they can buy something from your website or access content in membership areas. Indeed, consumers have come to expect instant access and ordering through the use of their credit and debit cards. But how can a small online business or startup company accept credit cards affordably and securely?

Two Credit Card Processing Options for Small Businesses
With an Internet-based business, you have the option of getting a merchant account or working with a third-party processor. For most new businesses, particularly those selling exclusively online, a third-party processor is the ideal method for getting started. Once your business is more established and processes a higher volume of credit card orders, you may want to switch to a merchant account at that time.
Merchant Account: this is the traditional method of accepting credit cards from customers. You need to apply to the credit card processing company and get approved for a merchant account. Not all businesses will be approved. If you are classified as a higher risk business, you may find it difficult, if not impossible, to get a merchant account. Some merchant accounts require an application or setup fee to get started, and ongoing charges include monthly fees, transaction fees, and monthly minimum requirements. For most new online businesses, a merchant account may be too costly and eat into your profits.
Third Party Processor: popular with new online businesses, retailers, and e-Commerce site owners, third-party processors (like PayPal and 2CheckOut) allow you to set up an account without an application fee and no minimum monthly requirements to meet.  With a merchant account, you process credit card orders right on your website, but with a third-party processor, your shopping cart or ordering system links to the third-party processor that handles the payments for you. In exchange for processing orders for their customers, third-party processors then take a percentage of each sale as their payment, and the rest is deposited into your account.
Challenges for New Online Businesses Accepting Credit Cards
Credit card processing companies label each business as normal risk or high risk – and the amount a business pays to process credit cards is based on their particular risk level. The lower the risk to the processing companies, the less a business will pay for credit card processing.
High risk businesses are generally those that deal with gambling, phone sales, auctions, and adult services. Some credit card processing companies label all kinds of Internet-based business as high risk and can make it difficult for the company to get a traditional merchant account; at the very least, it can cause the business to pay higher processing fees to accept credit cards.
About the author: David Rodwell is experienced in e-commerce, retail and online business. You can find more of his article located at CreditCardProcessing.net.