How to create a merchant account?

There are several ways to take payments online. You can accept credit card payments through your website or you can take orders through your online store and charge them later. When it comes to taking payments from the customers though, there is a slight difference between the two.

Accepting credit cards from your website does not require setting up a merchant account and website integration. All you need to do is contact your bank and ask them about the service they offer for merchants.

On the other hand, when you create an online store and sell products on it, you need to set up a merchant account and integrate your website with the payment processor. The first step towards this is getting a registration/eIN from IRS and applying for an EIN, if you do not have one already.

Once you get the registration, login to the official site of credit card processors such as PayPal, ClickBank or 2CheckOut and look for the 'application' link. After you have filled in the form, your account will be reviewed and if everything is in order, it will be approved within a few days.

The next step is to create a payment button or a shopping cart. This can be done through the same site where you applied for the merchant account. After you have created the shopping cart or button, all you need to do is write some code and integrate it with your existing website.

When we say 'integration', what we mean is that after a customer reaches your site as a result of Google search, he should be able to click on the payment button and enter his credit card information without leaving your website. This can be done by setting up a 'frame' on your site and including the code in it.

If you are not comfortable with doing all this yourself, you can always hire a web developer to do it for you. The cost of hiring a developer would be around $200-300 and it might take anywhere from 2-5 hours to get the integration done.

One more thing that you need to do is get a merchant account. You can go for either of the following in this regard:

1. Go for Starter Account in PayPal and then upgrade it to Business or Premier Account when your sales volume grows up (the fee for this is $5 per month).

2. Apply for a merchant account with your local bank and get a payment gateway such as Authorize.net, Beanstream or Chase Paymentech.

3. Sign up with an online payment processor such as 2CheckOut, ClickBank or PayPal.

4. Use a service like Square to start taking payments through your iPhone or Android phone.

The advantage of using a service like Square is that there is no need for a merchant account and you can start processing payments immediately. The downside, however, is that the fees are a little bit higher (2.75% + $0.15 per transaction).

So, stage is set. Your products are live, your website is ready and you have been getting some orders already. Very good! It's time to go the next step and get a payment processor that can help you get paid from your customers.