How to accept debit and credit card payments

If you're still contemplating whether to accept debit and credit card payments, stop now: you simply have to if you want to compete. Credit and debit card transactions accounted for 70% -- or £170bn - of all UK retail spending last year. And it rises annually. This guide will show you some of the advantages of accepting credit card payments and how to get started.

Why take card payments?

  • Card payments have become the norm for most business transactions: they are convenient and flexible for consumers
  • Cards are essential for sales by telephone and online
  • Card transactions will reduce the need for you to have great quantities of cash on your premises
  • It could open new sales channels for you and avoid missing saes opportunities

How to set up card payments

  • Set up a merchant account with your bank: this will allow you to process card payments
  • You don't have to use your usual bank to process card payments, so look around for the best deal
  • When you are setting up a merchant account, be prepared to provide information on your business history and performance, detail on your business accounts and cashflow forecasts.
  • You'll also need to tell the bank about the kind of goods you sell, your suppliers' details and the type and volume of transactions you expect by credit and debit card.
  • Once you have set up an account - it can take from one to four weeks - the bank will lease you a payment terminal: connect it to the telephone line and you're ready to go

How much will it cost?

  • Banks charge various fees depending on factors like the degree to which you may be subject to credit card fraud and the overall value of card transactions
  • Expect different charges for debit and credit cards
  • You will pay a monthly fee to rent the payment terminal
  • You will also pay a charge for each transaction - this will be anything from a few pence to 6% of each transaction
  • Some banks also use a payment service provider (PSP) to process transactions on your behalf



  • After researching the options open to you, choose an acquiring bank with which to trade
  • Be ready to provide details on your business and the kinds of transactions you expect to be made by card
  • Set up your merchant account, researching charges and overall cost
  • Decide whether you want to accept all types of card or limit the range with which you trade


Am I liable for disputed card payments?
When all goes smoothly, purchases made by card are very straightforward to process. However, if a customer later disputes a transaction - and can show they didn't authorize it - you could be asked to refund the sum in full. 'Chargebacks' such as this are usually the result of an individual having their card stolen. If you trade online, you are more likely to encounter this kind of fraud.


Payment service provider (PSP): an agency which processes card transactions on your behalf

Chargebacks: when a customer disputes a card payment and you are required to refund the disputed sum


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