Third party payment processors are growing in popularity. More and more merchants are utilizing third party payment processors for Visa card processing and Mastercard processing because they’re easy to set up and are low maintenance. The information below will enable a merchant to choose whether or not a third party payment processor is definitely the right choice.
What Is a Third Party Payment Processor?
A third party payment processor is a tool that enables a merchant to accept payments without needing to go through the steps involved in applying for a merchant account. A third party payment processor can be integrated with a website, as many have free shopping carts and buy now buttons that you can put on your website. Many of these features cost nothing and make it so customers can buy from merchants without difficulty.
What Does a Third Party Payment Processor Do?
A third party payment processor enables merchants to accept payments with ease. Third party payment processors do have merchant accounts that operate under their firms that are utilized to process various transactions for merchants. When a customer pays for goods, the money then goes into an account that the merchant has with the third party payment processor. When the merchant wants the money, he or she can transfer it to the bank account that is connected to the third party payment processor account.
Examples of Third Party Payment Processors
There are a few third party payment processors that the merchant can choose from. Below are examples of the top and most popular ones.
• 2CheckOut, Inc.
• Google Checkout
Paypal and 2CheckOut, Inc. have merchant accounts for merchants who outgrow the basics. All three of the third party payment processors right here have proven track records, allowing merchants to be able to put implicit trust in them.
Advantages and Disadvantages of Third Party Payment Processors
Before a merchant decides if a third party payment processor is definitely the right option for her or his business, pros and cons need to be considered. To allow merchants to make an educated decision, some advantage and disadvantages of payment processors are listed below.
Benefits of Third Party Payment Processors
• A variety of free shopping carts
• Options which facilitate recurring Billing
• Integration of the shipping costs
• Integration with the design of the merchant’s website
• Support for digital products
• Low monthly fees or no monthly fees at all
Disadvantages of Third Party Payment Processors
• Higher transaction fees–four to five percent
• Some require customers to get an account (This type of requirement can cause a merchant to give up sales, particularly if a customer doesn’t want to register.)
• Sometimes will not fit with certain website designs
Since a merchant understands enough about third party payment processors in making an educated choice, there are a few things that can be done to insure that a merchant chooses a reputable company that will provide merchant services. Talking with other colleagues and doing a bit of background research on each company will insure that the merchant makes the best choice. Once the choice has been made, the merchant has the ability to run her or his business with no trouble.