Merchant accounts aren’t for everyone. Sometimes, accepting credit cards directly on your website requires too much hassle and legal rope jumping. You can bypass all the registering, applications, credit approvals and other associated- and tedious- tasks you would have to perform to acquire a merchant account by choosing a third-party processor.

If you opt for a third-party option, you’ll save time, have your account up and ready in less than an hour and you won’t have to spend lots of money on monthly fees to use the service like merchant accounts may require.

First, the obvious: PayPal is a great service, but some business owners find that using the service has its drawbacks. At best, it can be a love/hate relationship like Bobette Kyle says. I say that, at worst, it can be like one of those nutty, co-dependent relationships that Lifetime movies are made out of.

I won’t lie to you. Choosing your perfect processor is going to be difficult. Much like finding a perfect mate, it requires a lot of thinking and a very serious weighing of options.

So where to start? Well, the biggest factors are (arguably):

• Set up fees
• Individual transaction fees
• Miscellaneous (and hidden!) fees
• Functionality in different countries (for both merchants and customers)
• Acceptable goods and services
• Payment method and frequency
• Customer service availability and helpfulness

…and that was the short list.

You can probably tell just by reading that list that there is no shortage of factors to consider. To top it off, there is no lack of processors to choose from. It seems like there are as many processors as there are businesses out there (OK, maybe that was an exaggeration, but anyone who’s taken the time to compare the options can maybe relate). Because each business exists in its own ecosystem, with its own commercial variables, it’s almost impossible to advise any of you on which one to pick.

But that didn’t stop people from trying,

For example, WorkZ did a write-up of the differences between Verza and CCNow (and iBill…back when it was still considered, let’s say, a “viable alternative”). Brandon Eley relayed some info about using 2CheckOut’s service. And John Conde created a nice little table comparing costs between PayPal, WorldPay and 2CheckOut back in 2006.

But enough with the dated examples.

Here’s the gist:

Third-party payment processors are best for small business who can’t boast about a great number of sales. Giving up a percentage on transactions is a cost-effective solution for these types of businesses. But those that have a good amount of revenue coming in each month may find that handing over percentages for each transaction takes a sizeable chunk out of their profits. When a business gets to that point, opening a merchant account and offering third-party payment processors as a failsafe- or just a convenient alternative for customers- is a good idea. After all, you want to make sure that your customers pay you…in whatever method they prefer or whatever method is available.

And, generally, third-party payment processors are a great way bypass any trust or security issues that prospects may have if you’re a new business or if your prospects are dealing with you for the first time. There’s always some form of hesitation when prospects are presented with the requirement of handing over their personal and financial information to an unknown entity for the very first time. You can easily exempt yourself from that type of suspicion by choosing a trusted processor to handle payments for you.

The benefits of doing that are many. Amongst other things, they allow prospects and customers to keep their financial information in one, safe place, help them save time and keep tidier purchase records. They can also do many of the same things for you…and more.

It’s worth noting that third-party processors also work for businesses with fair credit, businesses headquartered in countries other than the United States and websites that profit by selling non-goods like services. If your business can be described as having any of these attributes, then deciding to use a third-party processor can actually be one of the smartest choices you can make.

Add that to the fact that, like Brandon says, third-party processors can also offer recurring billing, shopping carts, seamless shipping cost integration and website design integration solutions…and it almost seems like one of the easiest one, too.