If you intend to operate an online shop which accepts credit card payments, you will need two things:
- An internet merchant account with a bank.
- An account with a payment service provider.
Internet Merchant Accounts
In order to accept credit and debit card payments online, you must have an internet merchant account. Almost all banks offer these accounts.
It isn’t necessary to use the same bank for your business account and your merchant account. Rates vary, so it is worth shopping around.
You should be aware that it can take several weeks to set up a merchant account.
If you already have a Customer Present merchant account (for use in a shop) or a Customer Not Present merchant account (for telephone and mail–order sales), you should be able to obtain an extension allowing you to accept online credit card payments.
Banks can be reluctant to give internet merchant accounts to new businesses. Some payment service providers also offer these accounts; they tend to charge higher rates than banks, but they are usually more accommodating towards new businesses.
Payment Service Providers
Before your customers’ online payments can reach your merchant account, they need to be processed through a payment service provider’s secure software, the online equivalent of a PDQ machine or credit card reader.
Most ecommerce software is compatible with that of all the following payment service providers:
Opening an account with one of these payment service providers will enable you to accept most types of credit card. Some cards, notably American Express, may require you to register separately with them.
Depending on your type of business, your payment service provider will charge you one or more of the following:
- a set–up fee,
- a flat monthly fee,
- or a fee for each transaction.
Rates vary widely, so it’s worth spending some time to find the payment service provider best suited to your needs.
Although it is usual for online shops to accept credit and debit card payments online, it is not compulsory. If you prefer to accept payment only by telephone or post, we will be happy to incorporate this into your online shop.
Your bank or payment service provider will inform you about the need to abide by the Payment Card Industry Data Security Standard. See the PCI Security Standards Council website for full details.
The following websites offer objective advice about electronic payments and running an online shop based in the UK: