Preparation

If you want to sell things and you don't already have a merchant account, you'll need a third-party credit card processing solution.

• PayPal - is so simple, safe, and such a good deal, it's hardly worth having your own merchant account. Your customers will pay money into your 'business' PayPal account and you can transfer it out when you like. PayPal offer four ways you take payments from your website: single-item sale, shopping cart, subscriptions and donations. They accept all kinds of different currencies, not just US$.
  
  Open a business account, and if you have 2 credit cards, open a personal account as well - it'll simplify testing later on.
  
  
• A good alternative is iFulfill who will process credit cards for you for a flat fee of 9% of the transaction. They will post you a cheque every month, but it'll be in US$ so ensure you can actually bank these before you get set up! iFulfill doesn't currently provide a 'Shopping Cart' facility, nor will their interface support you building your own. You can only sell one item at a time.
  
  

There are no start-up costs for either of these, although PayPal requires 'authentication' of a credit card. This basically means that they've proved it's really your card by getting you to enter a 4-digit code from your bank statement...

• PayPal charge $1 to your credit card.
• Your bank statement arrives at your address.
• The transaction says something like PayPal 1234.
• You click on a link in an email PayPal sent you.
• You enter the 4-digit number into the box and press 'submit'.
• Your credit card is now authorised!

This process is required every time you add a new card to your account (you can have many).

Your PayPal account is just like a bank account - they even offer a debit card for their accounts. You can do the usual things you would with a bank account: add money, send money, get a statement... Plus you can also use it to accept money from customers on your websites. More later.

When anyone uses PayPal to make a payment, a personal account is set up for them automatically. This first time payment is just like any internet credit card purchase. Once this account is set up however, subsequent purchases only require them to login using email address and password. This saves having to enter your details every time you buy something from a site which uses PayPal.

PayPal also offers a greater degree of security for customers. All websites have to agree to comply with a minimum code of conduct - including a money back guarantee. Customers can review their transactions, request refunds, cancel subscriptions etc. Read their Terms and Conditions for full details.

INFO: To read a separate review of payment methods read this article. In summary: 'PayPal costs look very, very good on paper. In direct costs, the merchant account/gateway route is only cheaper at monthly sales of $50,000 or more.'

Another alternative to PayPal are the various 'No Programming' solutions you see where you add someone's 'Buy Button' to your web pages... These services can cost $50/month or so - before processing fees! This is an expensive option and not worth bothering with.

If you decide to investigate further, you'll discover that you have two options:

1) Get your own merchant account - i.e. a bank account that allows you to accept credit cards. You'll then have to find a processing solution - i.e. a way of getting money from customer's credit cards into that account (in shops you'd use a 'point of sale' machine - which reads the card). On the Internet you'd use a company like iBill to do that.

This can be fairly complicated as there are so many different companies and options (and charges) out there.

2) The second option is to use someone else's merchant account. This is what you get with PayPal or iFulfill.

OTHER OPTIONS:

• Clickbank
• CCNow
• Verza
• iBill
• Digibuy
• Verisign

If you want to run your websites under a business entity (i.e. a Limited Company, Corporation etc), you should organise this now - these things take time. It's not usually necessary as most countries allow you to trade under your own name. You should check if you're unsure.

It can be useful to have a dedicated bank account. This is up to you. You should apply now if you do. Most countries will allow you to open a business bank account with a domain name (as well as your name) as the account name so you can receive cheques payable to yourdomain.com.

It's always a good idea to keep accounts - i.e. write down how much money you spend and make from your websites. The best way to do this is to use a spreadsheet program. See the Tools page for info about StarOffice. Remember to keep all your receipts!