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In today's marketplace, it is suicide not to accept online payments. Potential customers will simply go elsewhere rather than send you check and wait additional time for merchandise. So many others are willing to ship the same items fast and have this feature. In regard to the fees, you can't get away from that. You'll have to pay for this service because someone has to process the payments.
Lastly, I have to disagree with your comment about poor (or no) customer service. I have never had a customer service problem with PayPal. They have numbers you can call and the reps are knowledgeable and courteous.
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Is a merchant account really necassary? Yes a merchant account is the only way to run credit cards for your business. Paypal, Google Checkout, Amazon webpay are easy to use an integrate but, yes there is a but so when you integrate with them you are subject to their Terms & Conditions. Those are HIGH RATES & absolutely no Customer Service. More information on merchant accounts and PCI security can be found at http://www.servicesmerchants.com it is a information only website.