There are many new players to the "webmaster for profit" world, specifically, "Internet Marketers". It is very likely the vast majority of these will end up using a merchant account whether they realise it or not.
A merchant account is used to contract a line of credit from an acquiring bank, this basically means that the bank will accept the payment from a credit card on behalf of the merchant. The benefits of this is not limited to the online world, as you can make your business more productive by taking a wireless credit card processor directly to your customers.
It is also possible to set up a system so that you can process payments over the phone, fully automated, allowing you to take payments out of hours when hiring a sales rep may be unfeasible, especially if you run a small business, a merchant account would be more economical here.
Different banks offer different arrangements for this service. Some take a small fee per transaction, others take a small percentage overall, or a minimum where you must pay a specific amount no matter what volume of funds you deal in, possibly with the other fees on top.
For most people, you will never need your own merchant account, as there are many owned by other people that you can use. The biggest of these is PayPal, who allow you to use their merchant account for transaction fees, where they make their money. It's a very simple business concept, much like a landlord renting out a house and eBay made a very good investment by buying PayPal to integrate it into the eBay auction system.
There are of course the advantages of having your own merchant account, not least of these is expansion. Once your business has it's own account it essentially becomes that bit more professional and self reliant (which generally also saves on costs in the long run) as well as giving you more freedom with your processing and potentially even offering more routes of payment that service providers such as PayPal won't offer, although you will need to make sure that it is operational at all times or risk losing customers to your competitors, therefor you should not rely on it as your sole payment processing method.
However, you should weigh up the advantages and disadvantages and talk it over with your business advisors and/or business partners and anyone you know who may be in this finance sector to see if you really need or could profit substantially from a merchant account, or if it will just be a drain on resources (including funds) causing more trouble than it's worth.
Applying for this is as easy as applying for a personal credit card, and you will usually be approved or denied in two business days. Like applying for a credit card, you will be expected to have a good credit history and prove this if requested.
Remember, not everyone gets accepted for a merchant account, so be proud if you do. Be responsible with it, treat it as a valuable pillar of your business, much like the worker, without which you would have more work to do yourself, which could lead to the downfall of your business.
