A merchant account enables you to begin accepting credit card payments over the Internet. It's a "close contact account" linking your customer's credit card account with your own business account.

It would be simple, simple at least as normal visa or bank accounts, if all merchant accounts are alike. They are not. Differences in what they offer, in quality of service, fees and rates, difference between US only, other national and international merchant account are huge and ask for very careful shopping.

Our, and the most common suggestion is that you start by talking with your bank, and see what they offer in merchant accounts that work on-line. Here's what you have to look at:

- Transaction Fees: A transaction fee is a fixed charge for every online transaction performed online. If you are selling a small number of high-end, high-margin products, the transaction fee is going to be basically irrelevant. However, if you're selling books or CD's or similar low- margin products, a high transaction fee has the potential to take a sizable chunk out of your profit -- so beware.

- Discount Rates: A discount rate will be a percentage charged to you for every online sale you transact. Remember that, by itself, a low discount rate means nothing. Look at a merchant account's entire rate and fee schedule, as well as other service features.

- Charge back Rates: Charge backs stem from returned or repudiated (i.e., disputed and overturned) purchases. Charge back rates are implemented to protect the merchant account provider in the case of returned merchandise or repudiated transactions. Your charge back rate will take a percentage of your total monthly sales -- and the specific percentage is determined by what kind of product or service you sell, as well as your charge back history.

- Charge back Fees: Some merchant account providers will charge you a fee (beyond your charge back rate) for every charge back you incur. If your business typically receives a disproportionately high amount of charge backs, charge back fees -- compiled with a charge back rate -- can hit hard.

Ask also about not refundable application fee (if any), account opening/setup charges and any hidden charges, and any potential additional expanses led by particular merchant account.

When researching a prospective merchant account provider, you need to evaluate the full rate spectrum in relation to your business model, the amount of business you expect to transact, your per transaction profit margin and the category of goods or services you sell. In effect, make sure that your merchant provider does not subject you to a one-size-fits-all approach: There are critical differences between small owner-operated businesses and monolithic corporations.

Obviously, an e-business selling a few luxury items will have different merchant account needs than a business relying on high-volume low-margin merchandise.

Though significant, rates and fees are still just the tip of the iceberg. You need to balance price with the best overall fit for your company. Here are critical factors to evaluate:

- Charge backs: Do a meticulous analysis of the charge back policy and find out where you merchant account provider stands. Charge backs are becoming an increasingly touchy issue with credit card companies and merchants alike, and the dynamics of card-not-present transactions have pushed merchant account providers to 'deduct' an increasingly high percentage of transaction proceeds. So evaluate policy.

- Customer Service: Communication is critical. Make sure your merchant account provider has the customer care platform to swiftly and reliably answer questions and resolve problems. Integrity is important -- and the flight-by-night providers don't like to answer the phone.

- Online Experience: Make sure your prospective merchant account provider has extensive experience working with a wide spectrum of different of business models, both Internet startups and "brick and click" enterprises.

Remember, rates and fees are simply a part of the big picture. Getting a wider perspective on initially intangible items like sensible policies and superior customer service is essential in choosing the best provider for your unique business needs. Look for the details that distinguish one provider from next. First-step decisions like choosing a merchant account provider need to be among your most intelligent strategic moves.