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Credit Card Processing

Q: Which service providers do automatic processing of credit card orders via the Web?

  • 1st Merchants Bancard; Contact: Jetta Chasse; (800) 477-0173. Jetta Chase is easy to talk to and understands that the Internet changes the way some things are done. 1st Merchants only requires that you have a checking account with them; while some processors require a merchant account. 1st Merchants does not have a minimum monthly fee; while many others charge an average of $25 per month (whether you use their services or not). Further, 1st Merchants does not charge a fee for use of CyberCash CashRegister. [Raj Khera; Russ Williams,]
  • First USA Paymentech, processes MasterCard, Visa, Amex, Discover, and direct debits from checking accounts. They can verify the cards in real time. The cost for these services is about 2.5%, including card charges and fees from Paymentech.
    [Neil Harris,]
  • Open Market ( has a solution (called the Crew Program) which is especially convenient for small to mid-size businesses. All the backend banking is handled by "Service Providers". You can do the online store development however you wish. Then when your customer purchases an item, they get an online form that is housed at the CSP (we use First Union Bank). The fulfillment is then handled via a GUI browser-based application. This solution does require some technical expertise…some C++, plus the coding for the online store or shopping cart. It also requires some administration by either you or your client (to fulfill the orders). However, the cost is great -- $150 per month for hosting the form and the administrative piece, plus 25 cents per transaction.
    [Robert Rose,, Antony Calvo,]
  • GlobalCenter (, a hosting service provider, uses iCat Commerce. Their price for this service is quite good. They also provide design services and host some very high traffic Web sites, such as Netscape's, which require high service reliability. Other options can be found through iCat as well as Cybercash - they both partner with hosting services to deliver e-commerce solutions without high investment on the part of the netpreneur.
    [Ben Cruz,]
  • Intershop ( has some partners listed on their site.
    [Ben Cruz,]
  • Card Service International, is a Cybercash partner. They handle online transactions and charge fair discount and transaction rates. They can at least help you get started and with several months of low charge-back rates, you can switch to a lower fee Bank merchant account. CSI can also give you a real-life terminal if you need that. Cybercash,, has a great listing of other CSI-type organizations on their Web site. [Phillip Zakas,]
  • Wells Fargo, for merchant accounts. Wells Fargo will allow you to set up a merchant account without equipment (using Internet only). There are no set up fees if you keep the account for one year, and they take a minimum of $25/month.

    Credit Card Network, can be used to process the credit cards, if you (or your ISP) do not have server-based software to do this yourself (e.g., IC-Verify or PC-Authorize). They charged me a $300 signup fee, $25 monthly, plus 1% of the transaction revenue. There may be better deals out there now, so check around. [Steven Rubenstein]

  • TABNET,, accepts and processes our credit cards online via Net Payment. There is a $400 setup fee and an annual fee plus a per transaction charge, but everything is automated. Customers buy our merchandise online, and the credit card transaction is completely processed via a secured server that communicates directly with our merchant bank. We don't ever have to manually run card numbers or do any work as far as the credit transaction is concerned. In the nine months we've used it, we haven't encountered any problems. [Michael Crouse]
  • Mid-Atlantic Credit Card Service, a local company, set up my merchant account. I was the first Net-based business they attempted to set up. The process took almost eight weeks to complete in spite of the fact that the salesman told me I was "already approved." I use software called Global Retail PC and process the transactions via modem, not over the Net. The only "words of wisdom" I can pass on are "Be patient". The process was very slow and ridiculous. [Dan Barton]

On Using CyberCash:

Most everyone requires CyberCash CashRegister software to accept payments via the Internet. This entails downloading the CashRegister (free) from the CyberCash Web site,, and installing it. Many processors do not charge a fee for using it, but some do, so beware. Find a vendor who understands how it works and does not charge for it. What's more, using CashRegister does not require that all your customers need the CyberCash wallet to pay you. CashRegister comes with a direct payment option. You just have to edit and set up a script. [Russ Williams,]

Here are some tips when choosing a credit card service:

  1. Don't pay more than 2.7 or 2.9% transaction fees. Don't pay more than $40/month in general fees. Don't pay more than $100-$200 to process your merchant account application. Go directly to the card service organization rather than through a vendor (like a Web hosting company) unless you are sure they've negotiated a special rate for their customers.
  2. Don't "key-in" your online orders into a real-life (offline) terminal. This is flagged by your bank, and can result in termination of your merchant account, or higher transaction fees.
  3. Don't overestimate your online orders, and try not to underestimate them. The lower the transaction volume and average sale per transaction, the better. For example, if you think you'll average $1000-$2000 in gross online sales, with each ticket averaging $25 or less, you'll probably get through the application process quickly. Higher volumes or ticket amounts will cause the merchant application to take longer to process.
  4. Have a merchant bank account already set up, or use a company that will process and deposit funds directly into your personal account, before you sign up for a merchant account.
  5. Don't use a processor who is incompatible with your Web hosting company's payment system (Cybercash is popular). You don't want to wait 10 weeks for your processor to figure out how to help you create a Cybercash ID (which follows the sign-up for a merchant ID).
  6. Make sure your Web hosting company's payment system provides full merchant account services including: authorization, capture, batch processing, refunds, etc. Your merchant agreement may force you to use your online system for all of your merchant transactions.
  7. Shop around to find these services with a local bank first. They will usually charge the lowest rates, and you'll have a face/office to work with as you go through problems. [Phillip Zakas,]


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