If you’ve got an online business (or any type of business, for that matter) it’s likely that at some point you’ll want to set up a merchant account. To do this, of course, you’ll need to find a merchant account provider.

Although a merchant account provider is going to cost you some of your hard-earned income from your business, you need one if you want to accept credit cards. Of course, if you run an online business especially, you’ll need to accept credit cards.

To start looking for a merchant account provider, one of the best ways to go about this may be to start with your local bank. Your local bank, first of all, knows you as a customer and second of all, because they’re local, you’ll be able to deal with them directly instead of with a faceless third-party provider, for example.

The drawback to using your bank as a merchant account provider is that the bank will require a lot of you; they will probably require you to prove both your personal solvency and the health of your business. If your business is at start up stage, for example, many banks don’t want to provide merchant accounts to businesses there are too new and have no history. Second of all, your own credit history must be well established and in good standing. If you don’t have credit history or if you’ve had some difficulties, then again, your bank is less likely to establish a merchant account for you.

Another way you can find a merchant account provider is by using an intermediary. The intermediary basically does what you would do when you do with your bank to set up a merchant account. However, because the intermediary is very experienced in dealing with banks, the intermediary will know exactly what the bank is asking for and what you need. This is often helpful if you know that your business is a good risk, is well established, and you simply don’t quite know how to handle this yourself.

Many new business owners without the required credit history and the like use third-party services to set up a merchant account provider. Third-party services abound on the Internet, and it’s likely that you’ve used at least one in your own purchases as a customer if you do any online shopping at all. Do a search for these services and check them out to find out which one may be best for you, if this is the method you choose. Third-party services are a good option for those who don’t have the resources or solvency necessary (or the credit history, for example), to establish a merchant account through traditional means or through an intermediary. The drawback to third-party services is that you don’t have the flexibility or control you have with intermediary or direct services; you may be at the mercy of the company’s policies as to when you get paid, for example, and you also have much less control over customer difficulties with payment, for example. The fees these types merchant account providers charge for their services also are quite a bit higher than they are for the intermediary or direct accounts. However, the convenience they provide and the speed at which you can have your merchant accounts up and running make them attractive for many e-commerce owners.

Whichever method you choose, do your homework and make sure you know what your own credit history and financial standing are before you start contacting any merchant account providers. By doing your homework, you can get the best possible set up and processing fees for the merchant account provider you choose.

If you’ve got an online business or are running any type of business, at some point, you’ll want to set up a merchant account in order to accept credit cards. To do this, you’ll need to find a merchant account provider. The question is, should you use an offshore merchant account?

There are pros and cons to using a domestic versus offshore merchant account. First of all, of course, tax liability will generally be lower with an offshore merchant account versus a domestic one. However, it should be noted that if you use a domestic merchant account, you’ll likely take advantage of increased competition, which has been good for both consumers and merchants. For example, competition has driven interest rates down from approximately 7% per transaction to about 3%.

With an offshore merchant account, of course, set up is generally easier, often with no deposit or set up fee required, and tax liability is reduced, both for what you bring in and what you keep. However, fees for offshore merchant accounts are generally higher; do your homework and make sure not to buy into hype.

Make sure as well but what you’re doing is perfectly legal, since no savings is worth any headaches you might acquire by doing something illegal, even if you do so unknowingly. Make sure that the offshore merchant account you use, if applicable, is legal and aboveboard; it should be well established and have a good reputation. You can find most of this information quite easily on the Internet, by reading up on a particular company you’re investigating.

Some places also do not actually require you to have a merchant account but in fact you can do third party processing offshore as well. Do your homework for these types of situations. Of course, make sure that the company you choose, as with any merchant account provider, is an established business that has a good reputation and will handle your money with care.

Finally, make sure that the offshore third-party provider you choose, if you do so, is also well enough recognized by customers that they will have no qualms buying through you with a third-party provider. Some of these establishments are not yet well known, but will be. Others may not be fully aboveboard.

Therefore, again, it behooves you do your homework. You should also know that many if not most merchant account providers these days provide currency exchanges so that you can service customers from around the world, whatever their currency. Again, this is a service you want to look into if you expect to be doing any selling to customers from other countries with different currencies, and if you’re in e-commerce, it’s likely that you will.