Useful information on Internet Merchant Account

Choosing An Internet Merchant Account:


Surf to Google and perform a search on "Internet Merchant Account". The results are staggering (2,300,000 results!) If you have created a web based business and need to accept credit card payments, your choices are limitless. Before you partner with a provider, take time to understand the different components of Internet credit card processing, and know what to look for in a merchant provider.


How It Works:

Accepting credit card payments through your web site actually requires multiple components. Between a paying customer and your bank account, three layers exist:

Payment Gateway - This is the code that will transmit a customer's order to and from an Internet merchant account provider. The payment gateway provides you the ability to accept customer billing information (credit card number, credit card type, expiration date, and payment amount) and the necessary validation steps that must be followed before the credit card is actually billed.

Internet Merchant Account - A Merchant Account is an account with a financial institution or bank, which enables you to accept credit card payments from your clients. The payment gateway actually transmits the billing information to the Internet merchant account provider. Unfortunately, most local banks do not provide Internet merchant account capability.

The main reason why most local financial institutions or banks do not want to provide online merchant accounts is because transactions conducted over the Internet are totally different from face to face transactions where a signature is required to authorize the purchase. This makes online transactions prone to credit card fraud. Fraud protection should be one of your primary considerations when choosing an Internet merchant account provider.

Web Site - Regardless of which merchant provider and gateway service you choose, your web site will need to integrate with your service providers. Most providers include detailed web integration instructions.


How Much Does It Cost ?

Understanding the total costs of your merchant provider can be tricky. Remember my Google example - there are more merchant account providers than there are people looking for internet merchant accounts so ask questions and be picky! Typically, an internet merchant account will have three types of costs:

- Up Front Application Fees
- On Going Fixed Fee
- Discount Rate
- Fixed Transaction Fee
- Termination Fees
- Miscellaneous Fees

Let us discuss each type of cost:

* Up Front Application Fees

Many Internet merchant accounts will require an up front application fee. This fee, supposedly, is to cover their costs for processing your application. In case you choose not to open an Internet merchant account, they still cover their initial costs. Although common, many providers waive these fees and I recommend that you choose a provider that does not require an up front fee.

* On Going Fixed Fee

Most all Internet merchant providers require a monthly fixed fee or "statement fee" as it is commonly named, which is simply another way to cover their costs and make money. You will be hard pressed to find a provider that does not require this type of fee on a monthly basis. However, do not choose an Internet merchant account that requires more than $10 per month. Additionally, most Internet merchant providers require a monthly minimum (usually $25). The bottom line is that you will be paying at least $25 per month (on top of the monthly statement fee) for your account.

* Discount Rate

Usually, the discount rate will be between 2 and 4 percent. The discount rate is the sales commission the provider earns on each sale. For example, if the discount rate offered is 3%, and you receive a sale over your web site for $20, you will owe 60 cents to your Internet merchant provider.

* Fixed Transaction Fee

Usually between $0.20 and $0.30, the fixed transaction fee is the fixed fee portion of each sale. Unlike the discount rate, the fixed transaction fee is the same for every transaction. Whether you get a $1 sale or a $100 sale, the transaction fee will be the same.

* Termination Fee

A bit more hidden in the small print, a termination fee can apply if you cancel your merchant account within a specified period of time (usually within one year). But beware, some merchant providers require a three year commitment!

* Miscellaneous Fees

If a customer requests a refund and they want their credit card credited, an Internet merchant provider will charge you a separate fee (usually between $10 - $20). Read the contract carefully, as other special fees may apply.


Putting It All Together

Now that the different fees have been explained, let us look at an example set of transactions to help understand what an Internet merchant account may cost your business on a monthly basis.

I have created a simple formula to help you calculate your monthly charges:

Total Charges = Statement Fee + Number of Transactions x (Average Sale x Discount Rate + Fixed Transaction Fee) + (Number of Charge backs x Charge back Fee)

For example, let us see you sell widgets over the Internet. The sales price for each widget is $10. You typically have 100 sales per month and about 5 people request refunds (charge backs). For this example, let us assume you have signed up with Jones&Jones Internet merchant account services and have the following terms:

Discount Rate - %2.5
Statement Fee - $10
Fixed Transaction Fee - $0.30
Charge back Fee - $15

Using my formula above, your monthly Jones&Jones charges will be:

Total Charges = 10 + 100 x (10 x .025 + 0.3) + (5 x 15) = $140

You can calculate your monthly sales revenue by multiplying your sales volume by your price:

Monthly Sales Revenue = 100 x $10 = $1000

Your Internet merchant provider is costing you 14% of your total sales.


Making Your Decision

Before you choose and Internet merchant provider, understand all of the cost components. Use your current or projected sales data to forecast what your Internet merchant account costs will be. Planning ahead can save you time and money.

I hope this insight will provide a good use for those who want to do business on the web.

The Most Effective Link Building Strategies for Your Website

Google and other major search engines should be your top priority if you wish to make money online. To reach the top of Google, your website will need to offer something of value, provide quality content, and build a lot of inbound links.

Inbound links are a key factor for improving Google rankings. How do you build links to your website? There are a number of strategies that have proven effective time and again. Use these seven strategies for building links and improving search engine rankings.

1. Identify the right websites for link targeting. Getting links from other websites is beneficial, but not if you don't have a plan. Trying to acquire links from just any old website won't generate the type of return you're looking for. To determine the best sites for link targeting purpose, simply visit Google and type the keyword or keyword phrase you're trying to optimize for. Record the #1 Google ranked website for that keyword and see who's linking to that website. By targeting the same sites, you can mirror the achievements of the #1 ranked website. There are many tools that can help you do this. One is to type in "link:" into the Google search box and the name of the top ranked website. This will list all of the sites that link to the top ranked site.

2. Build a links page. Before starting any link building program, I strongly encourages those I consult for to build their own Partner page. A partner page or links page is where you can post links from your website to those who may be placing your link on their own website. This is referred to as reciprocal linking and is a great way to start building valuable links to your website. This links page can also be used for other types of link exchanges like 3-way linking. The key is to have some real estate on your own website that you can use to barter for links on other sites.

3. Contacting other websites. Once you've identified the sites you should be getting links from, the next step is to begin contacting them and asking for a link exchange or post. There are a variety of ways to acquire links from these sites but one of the best, and most simple ways, is to ask with a contextual email. This is simply an email you send to the websmaster of the site revealing your intentions. The key is to spend some time on the website you're targeting and to reference something on the site and the fact that a link exchange would be beneficial for both parties.

4. Directory submissions. Getting links from quality directories is a great way to start building links to your website. There are many free directories, and some paid, that can provide one-way links to your site. One-way links are the most valuable kinds of links because each serves as a vote from another website to yours. These are even more valuable if the site that is linking to yours has a high Google PR and only a few other links present on the page where your link is placed.

5. Article Submission. Distributing valuable content in the form of article marketing is a great way to build valuable one-way links. When you create article content and distribute the content via article directories or submissions, you benefit by the links which are present in the "About the Author" section of your article. As others post your articles to their own websites, they include your author box and links back to your website. Article marketing is one of the quickest and most powerful way to build meaningful links.

Link building is the most important SEO strategy you can employ for improving search engine rankings. As we've discussed in this article, start by identifying the right sites to target. Contact other websites and ask for a link exchange. Submit to website and article directories and include links back to your website in the about the author section. Using these top SEO strategies are sure to improve your search engine rankings.

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