I worked for a few years at a bank doing Visa Merchant Service support and am very aware of how the credit card system – as handled by the banks – works for merchants. 

Seeing the card present at the time of the transaction itself is by definition impossible when doing online transactions; and herein lies the risk to the bank (and yourself).  

In order for Visa International to pay on a voucher, NO MATTER WHAT, you require a “signed and imprinted draft”.  This means the card must have been swiped (yes, you can tell by the receipt somewhere), and the customers signature must be present on the draft itself.  If, at the time of the transaction there is sufficient credit; the charge is authorized. The customer then has 60 days to "dispute" the charge.  If there has been no dispute and the card has not been reported lost or stolen then the customer is liable for the charge.   This system does protect the merchant since if you can produce a "signed and imprinted draft" the onus goes back on the consumer… “If it was stolen how could you have used it since?   If the charge gets refused it's returned to the issuing bank and the merchant is debited.  If the customer loses the dispute, they pay.  In bogus or disputed charges either way, advantage Visa.

Banks don’t want to get involved with online transactions except with select merchants.  Their preferred setup is a retail store with a quick turnover.

They have allowed a whole other market to emerge to handle these online transactions; leaving themselves as the “settling agent” for the end user.  All disputes are then between the customer and someone else; either way the bank gets paid.

Getting a Credit Card Merchant Agreement

Under a traditional credit card Merchant Agreement you are required to have a letter of credit or demand note for one months expected sales or a minimum of $10K.  Based on your transactions you are charged a “discount rate”; or % of sales, usually in the 1-5% range depending on your volume, relationship with the bank and risk profile. (Grocery stores would pay 1%; adult bookstores closer to 5% for example…)

The banks are most interested in “bulk processing orders”, if you are an ISP with 5,000 customers who are billed monthly they would be very interested but if you are starting a little business selling some jewelry that you made or your mother’s home made BBQ sauce and want to take “orders over the Internet”, they will smile and try and dissuade you since they know without the “signed and imprinted draft” you personally will be liable for all chargebacks. 

If you are persistent they may ask for the $10K bond and ask you to install some special software and bingo; you now can accept credit cards.

Probably a better way to go is to use a payment “clearing service” like PayPal or Google Checkout.

Read more....  Using PayPal and Google Checkout