subject: Do Third Party Payments Affect Internet Merchant Account Arrangements? [print this page] While not too long ago a merchant required an Internet merchant account to process payment of purchases online, an increasing number of third party payment systems are popping up and providing alternatives. These companies offer both flexibility and challenge on both sides of the transaction.
Disruptive or Not?
Third party payers such as PayPal are considered disruptive because they are changing the way that payment is managed online. Initially used primarily for person to person transactions, PayPal has expanded its services to include micropayments, business to business interactions as well as mobile payments. With a quick set up and plenty of convenience, third party payment systems offer businesses an alternative to traditional payment methods.
Not Enough Clout
Even with the advantages offered by such systems, it is difficult for any company to exist on PayPal alone. While third party arrangements are growing in popularity, most people shopping online still prefer to use credit and debit cards. That means that any company doing business on the Web must have an Internet merchant account as well in order to processing credit cards for customers.
For merchants the news is positive, though. An increasing number of alternate payment providers are turning up; Google Checkout, Square and Amazon Payments are among them. Any time more options exist it is likely to be good for business since competition drives prices downwards.
Merchant Accounts Still Critical
There arent many businesses that can conduct all of the transactions in one format. On the Internet, customer convenience equals success and can lead to repeat business. Losing customers to other vendors which offer more payment options is a poor way of staying ahead of the competition.
An Internet merchant account is fairly simple to get, offers many payment advantages, and provides customers with a familiar format and convenience. That being said, it is the wise merchant who offers both traditional and non-traditional check out options. In addition to third party payment and credit cards, electronic check payment is also available, and mobile alternatives can be added if necessary.
With the Internet marketplace growing on a daily basis, no vendor can neglect any angle that will increase revenue. Competition is fierce and ease of payment can make the difference when closing the sale. While third party payment systems may decrease the market share of traditional credit card companies, wise entrepreneurs will tap in to every option available to provide additional service to customers.
