How to Accept Credit Cards Online

Being able to accept credit cards is important to any
business. It is quick and convenient for your customers,
and that is good for business. But the application fees,
discount rates, monthly premiums, and transaction
software that go hand-in-hand with having your own
merchant account can be very expensive for small
businesses. In this, the first of a two-part series of
articles, we will look at some alternative ways to accept
credit card payments.

The first alternative we will look at is something
called an Email Payments Network. Probably the two most
well known are PayPal (http://www.x.com/) and PayPlace
(https://www.payplace.com/). These services allow
customers to pay you with their credit card, and the
funds will be instantly transferred into your PayPal or
PayPlace account. You will then receive a notification
email with the name of the person who sent you money,
the amount, and instructions on how to collect it. You
may opt to have the network send you a check, or with
PayPal you can have it automatically deposited into
your bank account. You can also leave it in your
account and use it to make payments yourself.

PayPal is the original, so we'll start with them. PayPal
accepts MasterCard and Visa. They offer Personal and
Business accounts. Personal accounts are free and have
a $500 spending limit. Once you verify your bank
account, you may charge up to $2000 in each six month
period. Businesses must now use a Business account.
Business account will be charged a 1.9% per transaction
fee when receiving money. Sending money is always free.

Business Accounts have no limit on credit card funds
received. Buyers who have reached their PayPal $2,000
credit card spending limit can still charge their card
when sending a payment Business account.

The Business account offers a lot of extra services,
like auto-sweep , a 24/7 customer service call center,
Batch Pay, Web Accept, and downloadable transaction logs.
Auto-sweep (optional, carries a 0.6% fee) will
automatically sweep all your funds into your bank account
at the end of each day. Web Accept (optional, 1.9% on
payments received) Lets buyers click a button on your
website, pay you, and then be returned to your website
while your payment is sent directly to your account.
Batch Pay (optional, cost 2% or $0.25 per payment,
whichever is less) lets you send payment to multiple
people at once. This is good for paying employees or for
paying your customers if you run your own affiliate
program. They also plan to offer debit cards, interest,
and checking accounts in the future.

PayPal is currently available through email, Palm
organizers and Internet-enabled mobile phones in the
U.S. The PayPal platform will soon be extended to
other wireless devices, such as Web-enabled pagers.

PayPlace is very similar to PayPal's personal account.
PayPlace accepts MasterCard and Visa as well as American
Express. Sending and receiving money is free. The
maximum you can charge on PayPlace with your credit card
in a 30-day period is $500. PayPlace is only available
through email.

To use either service, customers must also have an
account. Signing up is quick and easy, and PayPal is
currently offering a $5 incentive for signing up and
$5 for each person you refer whom signs up and verifies
their bank account. PayPlace is no longer offering sign-
up incentives, but both companies say they will have
ongoing bonuses for members in the future. PayPal and
PayPlace are currently only available to US residents,
but PayPal plans to expand to international users soon.

Both services are easy to use and you can have accounts
with both at the same time. They offer an easy,
inexpensive alternative to merchant accounts, but be
wary of copycat services. Some are not legitimate.