“Make everything as simple as possible, but not simpler.” – Albert Einstein

It still amazes me how many bright business owners spend countless hours developing their offers only to neglect one of the key elements of closing the sale — making it EASY for customers to buy.

There is nothing easier than paying by credit card. That’s the way 90% of all Internet payments are made — and that’s why your first priority should be to get yourself set up with this payment option as quickly as possible. We’ve seen online businesses increase their sales by as much as 400% right after they gave their buyers this convenience.

Accepting credit-card payments also builds credibility for your business, encourages buyers to make impulse purchases, and provides you with a fully automated payment collection and tracking system. And this means no more trips to the bank, bounced checks to deal with, or hours spent manually processing orders and accompanying paperwork.

The first step to being able to accept credit cards on your website is to become an authorized Credit Card Merchant. You can apply by contacting a Merchant Account Provider (also known as an Independent Service Organization), which provides the hardware and software you need.

Merchant Account Providers fall into three main categories:

1. Direct Processors

Direct processors, such as banks, offer direct access to the credit-card processing centers. The completed order form is transmitted from your site through a “Payment Gateway,” which is a secure server that captures the credit-card information and then passes it along to the bank. Banks, in general, are cautious about granting Credit Card Merchant status to any business that does not have a majority of its transaction slips personally signed by the cardholders. That’s why many banks will charge a hefty deposit of several thousand dollars in addition to a minimum monthly fee, whether you have any sales that month or not.

2. Brokers

A broker acts as an intermediary between you and the merchant account providers. A good broker should be able to get you a discount rate of 2% to 3%.

(The discount rate is the amount of each sale that you will be charged by the supplier for providing a payment service. In other words, a 5% discount rate means that if your product sells for $100, the merchant account provider will keep $5 of every sale and you will receive $95.)

3. Third-Party Processors

Third-party processors send the credit-card payments from your website’s order page to a direct processor. They often provide “extra” services (such as fraud control, transaction reporting, and shopping-cart functionality) beyond those offered by direct processors and can be divided into two categories:

a. Fulfillment Houses

A fulfillment house will take orders for your products through their 800 number, provide a “live” operator for your buyers, package your goods, and then ship them — and will provide you with a complete online record of the transactions.

Many netrepreneurs start out doing all of the work themselves and then, once their business is thriving and reaches a point where their time is better spent focusing on the promotions rather than the chores, the order processing is offloaded to a fulfillment house. Fulfillment houses charge around a 5% discount rate.

b. Service Providers

When you sign up with a service provider, the payments your buyers make are actually being processed through the service provider’s credit-card merchant account. In other words, you do not have to qualify for merchant status on your own since the service bureau is the legal retail seller and you are their “agent.”

These services are popular with small online businesses, especially those just starting out. Yes, the transaction fees are usually higher than dealing with a direct processor, but there is often no minimum monthly service charge and no hefty deposit requirement. You are charged only for those sales you make.

Service providers can also set you up to accept online checks and payments by phone.

Choosing whether to go with a direct processor or a third-party processor primarily depends on your monthly sales volume. Since rates and services are constantly changing, it would be a wise investment of your time to compare current discount rates, monthly charges, and other fees.

As a very general guideline, if your monthly sales are under $750 to $1,000, and you don’t want to pay for a merchant account, a third-party processor will probably best suit your needs.

Once you’ve reached $750 to $1,000 a month in sales, you may want to look at switching to a direct processor that offers a lower discount rate, reduced processing costs, and shortens the time delay for receiving payments.

One final cautionary note: Before you sign any long-term lease with a service, I suggest you wait until the profits from your business are in your hand and you can accurately forecast future earnings.

(Ed. Note: Corey Rudl, president of the Internet Marketing Center, is the author of “Insider Secrets to Marketing Your Business on the Internet,” a comprehensive “how-to” guide for e-business success.)