accepting card payments

At first glance, having the ability to accept card payments may seem a rather obvious choice for any retailer or small business – mainly because it makes it easier for customers to pay you!

However, once you start investigating the contracts, charges and fees associated with accepting card payments the picture starts to look a lot more confusing.
So where do you start? Which is the best method of accepting card payments? And what are the fees involved? There’s no need to worry, as we’ve prepared all the answers below:


  1. Does your business need to accept card payments?
  2. Benefits of accepting card payments
  3. Accepting card payments in the U.K.
  4. How to accept card payments face-to-face
  5. How to accept card payments online
  6. How to take card payments over the phone
  7. Fees associated with accepting card payments
  8. Next steps: Saving money on card transactions

Does your business need to accept card payments?

If you are considering – or merely unsure – whether or not your business should begin to accept card payments, then check the list below and answer each question ‘yes’ or ‘no’:

  • Have you asked your customers about how valuable they would find it if you were to start accepting payments by credit or debit card?
  • Have you considered your current requirements from a card payment solution?
  • Have you also considered how accepting card payments fits into your long-term business plan?
  • Have you discussed the implementation of accepting card payments on your website with a web design agency or in-house developers?
  • Have you read up on PCI DSS compliance?
  • Have you researched the merchant accounts available to you? (If not, WE can help you here)
  • Have you looked into or requested pricing/ quotes from your shortlisted merchant account or payment gateway providers?

Once you have gathered this information, you will be able to make an informed decision about whether your business should begin to accept card payments.
If most of your answers are ‘yes’, then it might be time to consider getting a PDQ machine!

Benefits of accepting card payments

Customers increasingly expect to be able to pay by card, which means the decision about whether or not you should accept card payments is almost a redundant one at this stage for businesses of all sizes. However, for some small, niche businesses this may be more dependent on your desired customer base.

Regardless of whether you currently do or don’t, there are clear benefits to accepting card payments:

  • No spend limit: The value of a sale is no longer limited by the amount of cash that a customer has on them. Accepting card payments gives your business more opportunity to encourage and close bigger sales.
  • Less waiting around: Payments can be processed at the time of the sale as the money will be deposited in a merchant account before being moved to your business bank account about 4-7 days later– so no more ‘payment on account’ or ‘cheque in the post’ situations.
  • Quicker, safer payments: Paying by card is both quicker than paying cash or with a cheque. Using a chip & pin terminal to accept card payments also minimises the risk of fraud, ensuring your customers are protected.
  • Less cash means fewer problems: You can make business savings by accepting card payments and holding less cash. Not only does having less cash reduce the risk of theft or a break-in – reducing security costs – but you’ll also make fewer trips to the bank.
  • Sell online, all the time!: For online retailers and businesses, accepting credit card payments enables you to sell to a wider range of customers around the world.
  • Transparent fees: You will know in advance exactly how much it costs to accept a card payment, so you can add this into your pricing and business plans accordingly.

Weigh these advantages up against the cost of accepting card payments when considering whether or not your business should begin to accept card payments. After all, if the financial downsides outweigh your financial benefits, is it a wise decision to start accepting card payments?

Accepting card payments in the UK

In order to accept card payments in the U.K., you will need to set up a merchant account.

A merchant account is a special type of bank account that acts as a holding pen for money received from card transactions. It will temporarily hold the payment until the funds are processed and confirmed before being transferred into your normal business bank account.

Most banks offer a merchant account service, but you do not necessarily need to use the same provider as you use for your business bank account. There are numerous costs associated with merchant accounts that vary by business size, industry and volume of transactions processed.

For a clearer picture of the different card processing providers and their typical rates, take a look at our 2017 merchant account buyer’s guide for small businesses.

How to accept card payments face-to-face

To accept a card payment face-to-face, you will need a PDQ card machine. This is usually leased through your merchant account or bought outright. The three types of card terminal are known as countertop, mobile and portable machines.

Each of these machines offers different benefits to different businesses. For a detailed rundown of each terminal and its associated costs, head over to our credit card terminal buyer’s guide.

Third party PDQ machines

Another option is to hire or buy a card payment machine through a third party. If you wish to do this, you will first need to check with your merchant account provider that they are happy for you to accept card payments via a third party card terminal.

Usually, they will be able to give you a list of approved card machine providers that integrate with their systems upon request.

Accepting card payments from overseas customers & tourists

In the UK, most cards issued are chip and pin cards, which offer greater protection for you as a retailer or small business. However, if you take a lot of payments from overseas customers or foreign tourists then you may find that their cards do not incorporate chip and pin security.

You will need to double-check with your provider about how to accept alternate types of card payment security (e.g. metallic strip, signature, chip-no-pin).

Accepting contactless card payments

Another consideration you might want to bear in mind, depending on the value of a typical transaction, is whether your card machine will accept contactless card payments.

Many credit card or debit card cards support contactless payments for transactions of £20 or less. If the value of your typical transaction is less than this amount, it is probably worth confirming with your card machine supplier that the machine you have selected will allow you to accept contactless card payments.

How to accept card payments online

In 2017, by far the most common type of card-not-present transaction is a sale made over the internet. If you have an e-commerce website or virtual shopfront, you will need both a merchant account and a payment gateway to securely accept card payments online. You will also need to comply with the PCI Data Security Standard.

You won’t need a physical card machine to accept card payments online, but you will need to use a payment gateway, which allows the customer to input all the details that would otherwise be read by a card terminal. This may be software provided by your merchant account provider or it could be a third-party software-as-a-service (SaaS) solution.

If your business is entirely online, you may wish to apply for a merchant account via your payment gateway supplier because many offer to manage your merchant account application process as part of their service.

The main advantage to doing this is that it will usually reduce the burden of PCI DSS compliance, because your business will not be directly handling your customers’ sensitive financial data. However, you will need to confirm this status before deciding.

When choosing which solution is going to be best for enabling your business to accept card payments online, you will need to consider:

  • Does it allow you to accept digital payments (such as PayPal) as well as accepting debit and credit card payments?
  • Can it integrate with your e-commerce platform/ shopping cart/ website?
  • What support does the provider offer in terms of guidance/ published APIs?
  • What support on firewalls, security and compliance will you receive?
  • Can you customise the payments page to match your brand?
  • Costs for the service and per transaction?

You will also need to speak with your in-house web developers, or the agency that designed your website, about the changes you need to make to your website in order to integrate the solution and accept card payments – not least the cost of any such development and the necessary additional firewalls and security required to ensure compliance with PCI DSS.

How to accept card payments over the phone

There are two main ways to accept debit and credit card payments over the phone: as an extension to your online payments system using a virtual terminal, or as an extension to your card machine payments system using your usual card machine.

Since mail order and phone order sales are not usually the main source of transactions for most businesses, the method of accepting card payments you chose will generally be determined by the type of business you operate (physical or online).

If you do accept a large number of card payments over the phone, you will probably find that a virtual card machine (or software solution) offers a faster and more practical solution.

Fees for accepting card payments

Typical fees for accepting card payments in the UK will vary depending on the number and average value of transactions. In addition, the fees for accepting card payments by credit card are calculated differently to how the fees for accepting debit card payments are:

  • Accepting credit card payments: Charged a percentage of the transaction value.
  • Accepting debit card payments: Charged a fixed charge per-transaction.

These rates will be negotiated with your merchant account provider (or payment gateway provider if it has applied for a merchant account on your behalf).

For a more detailed insight, why not check out our 2017 guide to UK card processing fees?

Next steps: Saving money on card transactions

When considering any solution, it is important to consider not only how it meets your current business needs but also how the service can be expanded to support your future business plan:

  • If you are a high-street shop with plans to create an online shop, will your chosen card payments solution support this expansion? Does it offer a payments gateway?
  • If you are an e-commerce shop with plans to open physical premises, will your chosen card payments solution be able to support payments via a card machine? Will it provide the necessary hardware?
  • If you offer a subscription-based service, will your chosen card payments solution and merchant account also allow you to take payments via direct debit? Do you want to/can you do this online?

For expert advice on merchant accounts and payment gateways, just complete our simple online form today and one of our team will be in touch to discuss your needs and free price quotes.


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