Those new to ecommerce and internet business often have little idea as to how customers’ online credit card orders will be processed.

The processing is done through an online merchant account, along with what is known as an online payment gateway.

The internet merchant account is actually a banking facility which is obtained via a credit card processing company. Your merchant account must be specifically set up for online transactions, as opposed to a different sort of merchant account that is used for retail brick and mortar stores.

The online payment gateway is software that allows your ecommerce shopping cart to “communicate” with the credit card processing company, to make requests for authorizations whenever your customers submit an online order for your goods or services. This communication is done online, instantly and in a manner that is completely secure.

The large majority of payment gateways for an ecommerce merchant account also come with what is known as a virtual terminal. The virtual terminal will allow you to manually key in through your computer the transaction information for any telephone and mail orders you wish to process (as opposed to orders received via your website’s shopping cart, which are processed automatically when the customer clicks the submit button).

You should be careful to choose an internet processor that can create both the online merchant account and the payment gateway. Doing so will eliminate the possibility of there being any compatibility issues between the merchant account and the gateway.

You will probably be required to submit some supporting documents in addition to the actual application form. These include:

- articles of incorporation, if your business is not a sole proprietorship or partnership

- one voided from the checking account for your business. If your business is a sole proprietorship, you can submit a personal check that shows your name printed on the check.

- documentation to prove that you are the owner of the business, such as a business name registration

The provider will ask that the application form itself be signed by the actual owner of your business. If the business in incorporated, one of the company’s signing officers must sign the application.

A credit check will also be required.

Usually the processing company will be looking for a minimum score of 600 on the credit check to approve the application for the internet merchant account, and if the score is less than 600, a guarantor will likely be required to co-sign the documents. If you have a poor credit history, don’t be too concerned, as there are quite a number of processing companies who will still offer you an online merchant account – although if accepted, you will probably have to pay significantly higher fees to process your customers’ credit card orders.