Should You Take Credit Cards on Your Site?

If you’re an ecommerce merchant, then it’s more or less mandatory. But even other merchants should consider it: Thanks to the growth of ecommerce over the last decade, it has become relatively straight-forward to set up and maintain a credit card account on your site.

Here at Spilled Milkshake, we’re experienced and qualified when it comes to building credit card capabilities right into your website. However, there are a few things that you will have to take care of first.

The Merchant Account

There are two commonly used ways of accepting credit card payments: through your own merchant account or via a payment gateway account provided by a third-party merchant. An internet merchant account–usually obtainable through your current bank–allows you to process credit cards by effectively extending you a line of credit that is used to cover the costs of transactions until funds are officially placed in your account.

You’ll need to apply for this status, just as you would a loan. Try your own bank first, but don’t be afraid to shop around for better rates or terms.

The Gateway

You’ll also possibly need a payment gateway account. Gateways are online credit card processors that already has the clearance to connect your customers’ credit card accounts to your internet merchant account for the transferring of funds. The payment gateway interacts with the card issuer’s bank to authorize the credit card in real time when a purchase is made on a website. That means you get paid and the customer gets your product or service, even if the bank is closed at the time of the transaction.

As you would suspect, there is a cost involved for this service. Credit cards processing isn’t cheap, especially for a startup. A small-volume (under 1,000 transactions monthly) account would incur monthly processing fees that could range from $10 to $100. There are also transaction fees, typically 3 to 5 percent per transaction. Providers like to charge set-up fees, too, but you can often get that fee waived if you ask.

Then There’s PayPal

PayPal is what is considered an electronic wallet. The service allows individuals or businesses to easily and securely transfer funds online. According to their site, PayPal has more than 87 million active accounts in 190 markets and 24 currencies around the world.

There are a number of good reasons to use PayPal:

  • Easy to setup and use.
  • Global name recognition.
  • You won’t need a merchant account.
  • Customers don’t have to have a PayPal account to pay you.
  • Built-in invoicing tools.
  • Lower fees than many merchant accounts.
  • Easily integrated with popular shopping cart systems.


Still, PayPal isn’t the perfect solution for every small business. Some people refuse to use PayPal, which may result in lost business. There are stiff fines for chargebacks, and at any time, you’re subject to account suspension–which can freeze up your funds for months. And finally, while there has been marked improvement, PayPal’s customer service department doesn’t have a reputation for being accessible or easy to work with.

Look at Your Options

So is accepting online payments worth the hassle? Should you go with PayPal or simply take credit cards? What about mobile payments? There’s no universal right or wrong answer. You have several options, so spend a little time investigating the pros and cons before you make your decision.

Whatever you choose, be assured that Spilled Milkshake is here to help you implement secure web technology and guide you through each step of the process.