Hey guys. Im starting a new online business. In the past ive always used PayPal however due to the specifics of this business I will not be able to use PayPal or Google Checkout.

My business sells tangible/deliverable items within the same country as me which is Canada.

I am the only employee of the business and I preferably would like to avoid registering a company if at all possible and instead proceed with this business as a sole trader.

I am not a website designer or developer so I have very limited knowledge about all this.


My website is very abstract in its design and layout. Therefore, we cannot simply load some shopping cart template into it as it will not be at all compatible with the site design.

My website designer says he will write me a "custom" shopping cart for my website, however he first needs me to decide upon a payment processor.

I find this payment processor/merchant account/payment gateway/e-solutions stuff far too overwhelming. Im being bombarded with 50 different things and im not sure where im even supposed to start?



1) Does anyone have any recommendations for a payment processor for my situation?

2) Do I need to have a merchant account setup before I can select a payment processor?

3) Where should I get a Merchant Account? Should I do that at my local bank or are there places online (for Canadians) where I can do this?

4) Do I need to have a payment processor before I can setup a shopping cart?

5) How do payment processors work? You integrate their system into your cart, all the cart organizing/tallying is done on my website but then when the customer selects checkout theyre taken to the payment processors website to fill out their information?

6) Do I need to be in the same country as my "payment processor"?

7) Does my Merchant Account need to be in the same country as my "payment processor"?


I dont know if im even asking the right questions. Gaaaaah I really hate sorting through this, way to much to learn and I simply don't have the time to learn it all :(

Dear Overwhelmed.

Follow this process and you should be fine.

1. Get Organized.
- Payment processors will check to see if you are a real merchant, so register your business as a Sole Proprietor ($60 online) or Incorporate ($200). Once registered you will have a business #. You will now have a legal business name.
- Have a void cheque ready which shows your business name preprinted on it. As a sole proprietor it may be your personal name.
- Your website will be reviewed when you apply so ensure the DBA (doing business as) name corresponds with your website name. This DBA name can be different from your legal business name. Choose one that fits well. You may wish to register the DBA as well but that is optional.
- Be able to show that you have a secure SSL payment processing page.
- The transaction currency US or CDN must be displayed.
- A refund policy must be posted on the site.
- Customer service contact information must be clearly displayed.
- The country in which the business is registered must display immediately prior to completion of a transaction.
- An appropriate Visa or MasterCard acceptance mark is displayed.
- Security policy is disclosed.
- Privacy policy is disclosed.
- Be able to provide a test URL if the website is not live.

2. The payment gateway has two functions.
- To transmit the credit card information securely to the payment processor
- To transmit the approval code and any confirmation details back to your shopping cart
- Each payment gateway has its own proprietary method of connecting and passing data. Thus it takes special programming and testing to set up a shopping cart for a particular payment gateway.
- Two good payment gateways in Canada are PSIGate and Beanstream. Both would be willing to supply the API codes to your website designer in order to get the shopping cart to connect with their gateway.
- Expect to pay a setup fee ($199 to $299) and monthly gateway fee (< $29 to $39/mth) and a transaction fee of $0.15 to $0.25 per transaction.

3. The payment processor provides you with the merchant account number for your business. The above gateways work with First Data, TD Bank, Home Trust and more.
- Once the payment gateway accepts the order from the shopping cart, it is sent to the processor for real time authorization. A check is made by the processor to determine
- The credit card number, expiration date, and security code information are correct and up-to-date.
- There is sufficient credit available in the purchaser's account.
- The card has not been reported stolen.
- The order is then accepted or declined and your shopping cart is advised next steps.
- At the end of the day, the processor settles the transactions with clients banks and you receive deposits into your merchant account within 48 hours.
- A Canadian merchant that wants to sell only in Canada only needs a CDN merchant account #.
- A Canadian merchant that sells in US Funds needs to be issued a US merchant # and this is also issued by the same Canadian processor. You will want to open a US funds account at your Canadian bank.
- There will be an application fee typically $25 for Visa and $25 for MC. The monthly Admin charge should only be $10 per month. And you will need to negotiate your merchant discount rate for the business. Typically this will be > 2% plus surcharge (0.50% to 1.0%) for non qualified business sold to customers using special reward cards (Visa Infinite) or Corporate or Purchasing cards. MC also charges a cross border fee (0.40% to 0.80%)

Finally, you should read up on chargebacks, especially the Fraud Guide for Merchants on their Canadian website.

That should be your guideline. If you have further questions, I would be pleased to help you through this process.

Warm regards, Murray
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1) Does anyone have any recommendations for a payment processor for my situation?
Have a look at 2checkout.com

Use Paypal Website Payments Pro Canada much more simple.

Pricing
•$35.00 CAD monthly
•No set-up fee
•No cancellation fee
Transaction fees
1.9% to 2.9% + $0.30 CAD†

CardSolve, that was an incredible reply. Loads of Info, thanks! I'm sure I'll return later and use this info when I need it!

CardSolve, that was an incredible reply. Loads of Info, thanks! I'm sure I'll return later and use this info when I need it!
I have to agree. CardSolve, that was one of the best replies to any thread I've seen in quite a while.

Expect to pay a setup fee ($199 to $299) and monthly gateway fee (< $29 to $39/mth) and a transaction fee of $0.15 to $0.25 per transaction.
Is this accurate? The transaction fees seem high -- but then again, I don't reside in Canada.

Everything else is right on from my experience. Great post.