How to manage online payments
Retailers in the UK are now processing more and more online
payments. In fact, in January 2008 there were £4.5bn worth of
online transactions - a 75% increase from the year before. This
guide shows you how to get started with online payments
Why take online payments
- Having an online presence will boost your revenue and
ultimately give your business a more rounded reputation
- Trading online can make you more competitive and attract new
- Taking online payment means your business has a global
What equipment do I need to start trading?
- To start trading online you will need an online merchant
account - even if you already have one for face to face trading,
you'll still need an additional one to trade online.
- You'll also need an online 'shopping cart' and payment system
for your users, which will require you to link your account to your
website using encryption software.
- You don't have to build your own credit card payment system
linking your acquiring bank to your site. Your shopping cart
'payment engine' or 'gateway' feature will link with your payment
service provider and process customers' details
- Payment can also be accepted through a third party such as
Things to consider
- Because online payments are customer not present/ card not
present (CNP) transactions, there is a higher risk you will be
exposed to fraud.
- You should think about taking professional advice to ensure
there are no holes in your site's security and that shoppers are
safe using your service
- Your acquiring bank may request for you to provide a security
bond, in case of card fraud
- Assuming you are not a web developer, you will have to pay for
encryption software and for someone to install it on your
- If you don't accept card payments already, you may prefer to
use a payment processing company, which will charge you a few pence
- When applying for an internet merchant account, you'll have to
supply details of your business's cashflow and of how you
plan to promote your online site
- Be prepared to provide the bank with your suppliers'
- Have your online trading terms and conditions prepared
- Have details of your secure server to hand
Do I need to re-launch my site if I am introducing an
As your online presence counts as a second shop window, it is
worth investing in an impressive, accessible and easily navigated
site. However, if your business is testing out online shopping,
don't feel you have to build a brand new site from scratch. The
level of your investment should ultimately depend on how important
e-commerce is to your business.
Acquirer: a financial institution such as a
high-street bank that offers credit/debit card enabled merchant
Internet merchant account: a merchant account for
Payment service provider (PSP): to take for credit
card payments over the web, you need a payment service provider.
Some Acquiring banks offer PSP as part of their service
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