Easy Online Credit Card Billing Solutions for Startups and SMBs

If you plan to sell products or services on the internet you will likely need a solution to take credit card payments. There is an ever increasing number of online billing companies and solutions of one kind or another, but it is a bit of a minefield to navigate and find one suitable for your needs.

When it comes to accepting credit card payments online, there are generally two ways you could go – get your own merchant account and online billing gateway, or use a 3rd party billing service. There are of course pros and cons to both options and which one you choose depends on on your specific circumstances or personal preference.


Merchant Accounts

If you go with the merchant account option the set-up process can be a little more complicated, requiring more custom coding and complex regulatory compliance obligations. Even getting a merchant account approved can be difficult and in some cases impossible depending on what you are selling, where you are, your or your company’s credit history etc.

You’ll also need a billing gateway which, as the name implies, acts as the gateway between your billing page on your site, and your merchant account at the bank. There are a number of well known payment gateways you could use such as Authorize and Vantiv.


3rd Party

On the other hand you could go with 3rd party billing. These billing services are basically processing credit card (and other) payments on your behalf through their merchant account. They provide a much simplified set-up, often with little to no custom coding required (but with an optional API so you can better integrate with your own systems if you choose) and almost instant sign up and approval. They take a small percentage of each charge processed on your behalf, and some may also charge a minimal set up fee.

3rd party billing offers several advantages, besides easy of approval and set-up. One such advantage is that you get to benefit from their advanced fraud screening procedures which operate across countless merchants using their system which allows the billers to better spot dubious payments.

Some also offer a built-in affiliate program which provides everything from click & sales tracking to monthly payments sent to your affiliates. You don’t have to do anything but persuade your visitors to register to your affiliate program and then sit back and watch the money roll in! (well almost) In fact in some cases you get to benefit from their existing pool of affiliates since your affiliate program will appear in their browsable list of programs which they promote for you which can give you an early boost.

Some of the best known and well established 3rd party billing services for small businesses are Bluesnap, 2Checkout, ClickbankMoneybookers and of course Paypal.



There are some disadvantages to 3rd party billing services though such as slightly higher transaction charges. Also sometimes a rolling holdback of up to 6 months, meaning they will hold an additional quite large percentage of the transaction which will be released after a few months if there were no chargebacks or disputes in the meantime.

Holdbacks can make it a bit difficult in those first few months, until the first holdbacks start to be released. You may not have anything heldback though, it depends on a number of factors so you should check about this and any other issues you want to clarify, with the billing company before starting.


Cha Cha Changes

The online billing landscape is changing fast and now there are relatively young upstarts such as Stripe, which made a name for itself as being developer friendly, and can do pretty much anything you need with just a bit of coding. There are also other newcomers which require using a merchant account and gateway, such as Recurly and Chargify.

There are also new forms of currency such as bitcoin which may be worth considering and billing solutions exist for that as well.

Whichever billing solution you choose, make sure you read the small print and know exactly what you are getting, how much it will cost you, and what your obligations are – billing customers is serious business and your business depends on it!



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