If you're a retailer, and you're not managing your own online sales, you should stop and think: What's stopping me?

These days, there isn't much. Sure, plenty of third-party sites - think eBay or Etsy - exist to pedal small merchants' goods online. But if you're ready for autonomy from those fee structures and site-design limitations, it's time to set up your own retail site, including payment processing.

Handling Online Credit Card Processing: Find a Provider

For small businesses with a website already equipped with a store and shopping cart system (a few options are Volusion, Shopify, or Magento, or you can upload products to Google's product search, Base), it's extraordinarily simple to set up online payment processing with the help of a credit card processing service.

Most of the services are similarly easy to use: they offer either to route your site's customers from their shopping cart on your site through a secure payment system on their own site, or to allow you to directly embed their payment button on your site. Because secure encryption can be difficult for the non-tech-savvy, you might want to contract a web developer to help with set up. If that's not possible, most of the credit card processing gateways offer extensive customer service and set-up assistance.

If your business does not yet have an online store and shopping cart with credit card processing, you'll need a merchant account, which is an agreement with a bank to process credit cards, and a payment gateway, which is the infrastructure that enables you to accept credit cards.

There are two types of merchant accounts:

Dedicated Account

If a bank makes a contract with you to provide you with your own merchant account, then this is a dedicated account -- yours alone. To determine your eligibility, banks will require a comprehensive review of your business and, as a small business owner you'll also have to provide personal information, according to Nell Gable of PaySimple, a payment management solution provider. PaySimple also outlines the top questions to ask when opening a merchant account.

Third-Party Processors

Whereas setting up a dedicated merchant account can be time consuming and require an extensive assessment of your business, third-party processing services might be attractive to businesses that process relatively low volumes of transactions because they can be fast and easy to set up according to Merchant Maverick, a review and rating site for small businesses.

These types of merchant accounts are aggregated accounts, meaning your money is pooled with that of other companies. Merchant Maverick cautions that because of the minimal business analysis prior to your approval for service with third-party processors, these vendors tend to assess your activities more critically and could put a hold on your account or terminate your service without warning. Even so, the review site explains that many small businesses use third-party vendors for the benefits of:

  • Predictable, flat-rate pricing

  • Month-to-month agreements

  • Little or no monthly or annual fees

  • No monthly minimum to qualify

When Nikhil Roychowdhury, founder and owner of the online shop The Simple Leaf Tea, set up his online payment system several years ago, he shopped around for months for a payment site with a pay structure that matched his needs. He expected sales to grow, but wanted to leave room for them to boom. He went with a company called Authorize.net, but declined to accept American Express due to the higher fees involved.

Editor's Note: Looking for Credit Card Processing for your company? If you would like information to help you choose the one that's right for you, use the questionnaire below to have our partner, BuyerZone, provide you with information for free:

"Before we went live with them, it was pretty straightforward to set up," Roychowdhury said. "And you know it's working almost immediately, because funds go into your account within 48 or 72 hours."

Basically, you want your processing service to be reliable (customers will flee if the process isn't consistent), versatile (it should enable you to accept all forms of payment from anywhere at anytime) and secure. Be prepared to pay - and negotiate - gateway fees, statement fees and a percentage fee per transaction.

Out of hundreds of services to choose from - and keep in mind that most use a parent gateway - here are a few payment gateway options, with approximate costs (though some may be flexible and negotiable).


According to its site, established in 1996, Authorize.net today is used by more than 430,000 merchants and processes more than $149 billion in payments every year.  It is one of the largest services, though it is sold primarily through its third-party resale partners. It allows merchants to either link to or host their own secure payment form. It offers online shopping cart tools and a developer directory for help starting out and can handle recurring billing.

Cost: If you have a merchant account, there is no setup fee and the gateway access fee is $10 per month. Transaction costs also are $.10. According to the website, there is no monthly fee if you use Authorize.net to set up your merchant account through a third-party processor, but transaction fees are then 2.9% plus $.30 per transaction.

What else you should know: Many other payment gateways simply use Authorize.net as a portal - so before adding another middleman to the process, check out all steps involved. Also, due to its large user base and transaction load, it has had at least two major outages, in September 2004 and July 2009.


Stripe is a merchant services provider with the payment gateway built into their payment platform. This company describes its platform as being fully integrated, global and developer-oriented. They offer account management, migration assistance, dedicated support and volume discounts.

Cost: This is a pay-as-you-go plan with a fee of 2.9% plus $.30 per successful card charge. There are no set up or monthly fees.

PayPal Payflow Link

PayPal Payflow Link is a service of PayPal that may be a cost-efficient option for small businesses. It is PCI compliant and works with most merchant accounts, processors and shopping carts. It has up to a 44% higher online checkout conversion with PayPal according to the website. Optional features include recurring billing, buyer authentication and fraud protection.

Cost: No monthly fee and $.10 per transaction.

Handling Online Credit Card Processing: A Final Thought

Online merchants may also want to be flexible with the forms of payment they accept on their sites by including PayPal and Google Pay. Google Pay was launched early in 2018 to combine all previous forms of Google payment methods.

See all of our Best Credit Card Processor selections.

This article was updated October 23, 2018.

Editor's Note: Looking for Credit Card Processing for your company? If you would like information to help you choose the one that's right for you, use the questionnaire below to have our partner, BuyerZone, provide you with information for free:

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