Originally posted by Alphavillage why do i need merchant Provider?
i thought befor billing systems are enough..
Well if you want to process credit cards you will need a merchant account or yo ucan use paypal or 2CO or what ever that name is. Though if you are not accepting credit cards only cash then you do not need one.
Well, it depends on how you want to collect payment. You could use 2CO and PaySystems to handle all your credit card transactions and they would do fine. All they ask for is some percentage of your prices and they will handle the work for you. They either would pay you weekly, forthnightly or monthly.
However, if your sales volume is relatively high and you want to be able to see money get into your bank account almost right away and with volume, you can save on the middleman charges then getting your own merchant account would make sense. Do it if you know what to expect and want to handle everything in-house and that it is profitable for you to do so.
If you are just starting off then start off with a payment provider and just weigh your options as when you are ready to use them.
Get a good billing program in place. I wrote my own, but I know that a lot of people will recommend either ClientExec or ModernBill. Whichever route you go, you will want your billing program to be able to integrate with your chosen payment solution (PayPal, 2CO, Authorize.net, etc.).
PayPal and 2CO are widely popular and just about any billing application out there will integrate with them.
As you may know, having a merchant account to accept credit cards actually involves two parties: the merchant account provider and the gateway provider (this is the integration point). The most popular gateway provider I know of is Authorize.net, and again, just about every major billing application will integrate with them.
SolidState - Open Source Billing Solution for Web Hosts
Why a merchant account? I think it's important to point out a couple good reasons to go with a merchant account over something like 2CO or PayPal.
With PayPal you run the risk of frozen assets. This has never happened to me but it has happened to a lot of people. Generally I feel you probably did something fishy to get this to happen to you, but I have heard of honest cases where it was PayPal just being lousy.
In the long run you pay more in fees with PayPal than you will with a real merchant account. Especially if you choose wisely (avoid BankCard USA).
I'm not sure what 2CO's fee structure is, but the idea of not getting my money from transactions right away doesn't sit well with me. And I imagine it causes some problems for beginning hosts who might be tighter on funds.
Finally, I think from a users point of view it can be more professional looking to stay on a hosts site to complete a transaction instead of getting shipped off to PayPal or 2CO. This is just my opinion though, you could also turn it around and say it could provide the customer some shred of security by going to a site such as PayPal where they might feel more secure providing payment information.