We have had several different merchant accounts and bank accounts over the years, and have found that your bank is probably the last place from which you want t

We have had several different merchant accounts and bank accounts over the years, and have found that your bank is probably the last place from which you want to obtain a merchant account. These days most businesses (online businesses, at least) obtain a merchant account through an Independent Sales Organization (ISO). The ISO is basically an independent sales rep for a Merchant Services Provider (MSP) associated with a bank. When your account is set up, the funds from your customer pass seamlessly through the MSP's bank and are deposited into your local bank account. The ISO makes his/her money through fees on your account. The more sales you have, the more they earn. Competition between ISOs is intense, so it pays to shop around. Every local bank I've dealt with "outsources" their merchant accounts to an ISO. I assume the bank receives referal income from the ISO, as the fees we've been quoted for a merchant account through a local bank have always been higher than we've found elsewhere. A few months ago, we quit having our own merchant account and moved to PayPal, as basic interchange fees have increased to the point where we found that is the least expensive option for our level of sales (>$10,000/month). We use a basic PayPal Website Payments Standard Account using their name-value pair (NVP) interface. Our customers enter their shipping address data on our web site and their credit card information on PayPal's web site so we don't have to worry about PCI compliance. We use custom headers on our order page ("Checkout: Step 1") and our PayPal page ("Checkout: Step 2") to make it look pretty seamless. You can upgrade to a Website Payments Pro account for $20/month if you want to do it all on your own server, however.