I've recently been considering using a merchant account and payment gateway rather than paypal (which is what i've been using for the past yr) and am a bit confused by all the options that I'm faced with. First of all - is there a difference between a third party processor and a payment gateway? Are paypal and Authorize.net both third party payment processors? Secondly - I understand that i'd need to open an online merchant account. Is it possible to have a company do my payment processing and NOT have a bank account with them? I noticed that some companies offering payment processing do have merchant account links on their webpages and some do not. For instance, Authorize.net doesn't have a merchant account link but first atlantic commerce does. Does this mean that first atlantic commerce offers merchant accounts in addition to payment processing and authorize.net doesn't?? Or will first atlantic help me open a merchant account at some bank? As you can probably tell I'm quite confused at the moment and am confusing myself more with all the reading and research/reading i'm doing. Any help clarifying my spinning head will be much appreciated!!
For the first question a payment gateway connects the merchant account to the website. It does nothing more than provide a method to actually process transactions through the website. It does not work without a merchant account. A 3rd party processor is a company that processes transactions for a business or website. They essentially replace a merchant account and payment gateway. Question 2: The only companies that I have seen that require you to bank with them if you process with them are banks. If you process through a US based merchant service provider (Non-bank MSP), you will be able to use any US bank that you choose for the funds to be deposited into. In many cases you can use a personal checking account as well. (Personally I recommend to get a business account to separate your business and personal banking). Authorize.net doesn't have a merchant account link because they resell to thousands of providers. If they were to offer merchant accounts themselves they would upset the companies that resell their service. Here's a brief overview comparing 3rd party processors to MSP's and also covering the basic steps to start accepting cards on a website: http://www.merchantaccountblog.com/archives/227 Also check out Stymiee's website for a lot of good information on what your asking about: http://www.merchant-account-services.org/
If you look for 3 party processing then I would go with 2co, which is more expansive then if you go for a merchant account. There are alot of options for you and as jestep also suggested then take a look at the link's and also make a search on google, compare the different service to each other and then make a decission. Once of the biggest banks in Europe are Pago, Euroline, EuroConex, Streamline, Barclays and Worldpay and many more. For all of them you will need to find a payment gateway provider too, however they can recommand one for you. Only if you have a volume of more then $10.000/month I would suggest you to go for your own merchant account, because then the fees you have to pay are less then what you would pay with a 3 party processor. Also a good payment gateway and your own merchant account will safe you from alot of troubles because your customers do not recognize the charge on the bank statement and therefore make chargebacks. But as I already said, then take a look at the options out there and then decide, if you can find some reading about the ups/downs of a Merchant Account or 3 party processing then it would be a good idea to take the time it needs to avoid any troubles or to be dissatisfied.
This may be true if you only care about price, but as far as creating a more professional checkout system, the merchant account/payment gateway combo is much better. So far paypal is the only 3PP that has any sort of API functionality. With a merchant account, your visitors never need to leave your website, and your business name shows up on their statement.
I've REALLY liked Obopay recently. Paypal and Alert Pay have also been trust worthy and solid payment processing programs to work with. Best.
I am holding a 2CO account now, never used them for years as they had very weak anti-fraud system. I'm not sure whether they are better now but do filter the fraud orders carefully. I received a few fraud orders processed by 2CO in the past. Chargeback filed by owner, funds refunded + US$25/transaction + no dispute with 2CO = Stopped using 2CO until now Thanks.