A payment gateway allows you to accept credit cards and online checks over the internet. This is especially important if you have a product to sell (whether it is your own product or someone else's product).

Imagine the customer has come to your site, which is one long sales letter. The whole idea you put forward makes sense to him/her and the customer feels all worked up that he/she just got to have your product. He/she reaches into the wallet and whips out the shinning brand new credit card....only to find when she reaches the end of the page that you do not accept credit card. They have got to go to a bank, fill up a bank in slip, wait in line for their turn, bank in the money into your account BEFORE sending you another email in which you will reply and instruct them to go to another site to download the product. What are the chances of you losing the sale ? VERY likely. When they get all worked up about something (which is what your sales letter suppose to do), they want it NOW. When it all cools down again and they have doubts entering their mind, you have lost the sale, not to mention all the tedious things they have got to go through to send the money to you. In addition, they may not trust you enough to bank in the money or send it to you. At least there is some form of protection with the credit card.

So, consider it as a MUST unless you're selling some kind of services which is complicated and the chargeable amount is not known immediately but based on customization for the customer.

There are many companies that offers shopping carts which require you to have your own merchant account with a bank as well as a credit card company. In addition, some of them require you to have your own secured hosting. Others allow you to upload your products' pictures to their site and setup a functional store within minutes.

These packages vary considerably in features, cost and ease of use. Some are software programs which requires extensive programming whilst others are web based and only requires signing up an account. The cost vary considerably among them as well.

Below are some payment gateway providers you need to research, to find the best one that fits your need and pocket.

Click bank - If you are selling digital products (ebooks & softwares), this is one of the MUST HAVES. They are one of the largest processing house for digital products with inventory in access of over 10,000 products. If you sign up as a vendor, there is a one time set-up fee of US$50 with no recurring monthly charge. Charges are based on sales and checks issued.

If you sign up as an affiliate to sell other people's products, your registration is free. They only charge you processing fees and for cutting the check. You keep the product in your own server for download. You place a link in your sales letter when the customer is ready to pay which brings them to Clickbank's processing site. They are responsible for keeping track of your sales and pay the net once every fortnight or when the checks exceeds an amount determined by you.

Clickbank also runs an affiliate program which allows you to sell other people's products as well as allow others to sell your products. They keep track of all the commissions so that you don't have to worry about that. If you want to sell other people's digital products, many of them belong to Clickbank's affiliate program, so I highly recommend that you sign up for one... its free !

Paypal - Also one of the popular accounts to pay and to accept payments. Recently acquired by eBay and you will need one in order to trade on eBay. Free to sign up as well and they even deposit the checks into your bank account, local or foreign.

2Checkout - Clickbank and Paypal doesn't deal with some countries due to high risk of credit card fraud. If you are residing in those countries, you may need to check out 2Checkout (no pun intended). Allows you to accept credit cards but without the ready made products to sell as well as the affiliate program. One time setup fee of US$50 with no monthly recurring charge. Charges are based on sales and checks issued.

1ShoppingCart - Integrates real time credit card processing with shopping cart. Has many additional features as well as integrated affiliate's program. With a monthly charge starting from US$19 per month, they offer features that are too many to list here. Check it out yourself.