A merchant account is kind of bank account that lets you accept credit cards. It is possible that your local bank offers merchant accounts, but it is generally a good idea to shop around for the best rate. The main fees involved in merchant accounts include the discount rate (a percentage of each transaction), a monthly statement fee, a chargeback fee, and sometimes an early cancellation fee if you sign a contract. Discount rates are higher for online sales than in-person sales, and you must tell your issuing bank that you are using your account for online sales as some do not underwrite online merchants.

In order to accept credit cards through your website, you will also need a payment gateway. These are often bundled with online merchant accounts.

When I grew out of PayPal and was shopping around for merchant accounts, I did several months of research and decided to go with e-onlinedata. My criteria were low fees, good customer service reviews, no long term contracts or termination fees, and experience working with online merchants. I was with them for several years and had no problems with their services.

However, the newest generation of merchants like Stripe are making the merchant account / payment gateway combo obsolete by providing both in one and saving you money in the process. Therefore Stripe is my new recommendation.