Merchant accounts and accepting credit card payments

We appreciate that the subject of accepting card payments online can be confusing if you have never had to deal with it before.

Our aim is to clarify the whole process for you and make it as simple as possible to start taking card payments online.

What do I need to take card payments over the Internet?

This is basically what you will need :-

• 1) An Internet merchant account
• 2) An online payment gateway
• 3) A web site with shopping cart or a simple order form

1) Internet Merchant account
This is a financial contract that you will need with a merchant acquiring institution. This provides your business with the facility to accept credit/debit card payments. The vast majority of merchant accounts in the UK are provided by the major UK high street banks, though it is possible to use a "bureau" style merchant account with companies such as Worldpay or Paypal. Whilst the bureau merchant accounts may at first seem attractive due to their simpler application procedures, you will end up paying a large premium on your transactions for the privilege. For example, Worldpay levy a 4.5% charge on your card transactions, compared with an average rate of about 2% for a direct bank acquired merchant account.

We therefore strongly recommend that you set up a proper merchant account. We have much experience in assisting businesses in obtaining merchant accounts, and can often advise you of the best deal for your business. You do NOT have to obtain a merchant account from your usual bank, which makes it possible to shop around. Please contact us for more details and advice on obtaining a merchant account on 0870 241 2236, or download our free guide to obtaining a merchant account which contains step by step advice and many tips to reduce bank setup and transaction fees.

You may already have a merchant account for taking telephone/mail order card payments and use a manual credit card terminal. Whilst it is possible to use our service to collect your orders online and process them offline using your terminal, we advise you to process your transactions automatically online, for which you will need an Internet merchant number. If you already have a merchant account for telephone/mail order, we will contact your bank to arrange for the Internet merchant number add-on as part of our service.


2) Online payment gateway
This is the part that connects your main web site to your merchant acquiring bank over the Internet. Normally a payment gateway will provide an area on a secure server to host your payment forms, and will forward the transaction payment data in real-time to your merchant acquiring bank for authorisation. If your bank authorises the transaction the payment gateway will return a confirmation page back to your customer and send you notification of the successful order.

You need a payment gateway in addition to your merchant account, as the merchant account itself is useless without one! Some banks confuse the issue by offering their own payment gateways as an optional extra with their merchant accounts - beware however as the banks will charge you a hefty premium for this, typically an extra 2% on each card transaction! You are under no obligation to use the bank's payment gateway, and you will save a great deal of money by using an independent one such as our UPG payment gateway service.


3) Shopping cart / order forms
Your web site will need to have a system to allow your customers to select items from your web site and proceed to the secure payment gateway to "check out". If you have a large number of items for sale you will need a shopping cart system to allow your customers to browse your items and add to a basket as they navigate around your online catalogue. We have a shopping cart solution SH Store which integrates seamlessly with our payment gateway, however you can get a developer to build your own cart system, or purchase a third party cart that has already been integrated with our payment gateway.

If you only have a small number of items for sale you can create a simple order form, or use the "Buy Buttons" feature included in our eCOM Standard service to quickly add shopping functionality to your site.



We hope the above helps to clarify the situation a little more. We speak to confused merchants every day and are only too pleased to speak to you if you have any questions regarding the whole process. Please call us on 0870 241 2236, or place a question through our contact page.

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