Credit Card Processing

Credit cards and debit cards are an extremely popular method of payment in the UK, particularly for consumer purchases.

Around two thirds of all UK retail spending is made using cards (based on data from 2010). If you sell products or services to consumers, you'll very likely want to be able to accept credit cards.

Credit card processing can happen in several different situations:

  • online
  • in-store
  • by mail order, telephone order, or fax

Accepting Credit Cards Online

To take credit card payments for purchases online, through a website, you have a couple of alternatives:

1. Get a Merchant Account and Payment Gateway

If you already have some trading history and are processing a healthy number of transactions, getting your own merchant account is a good option to explore.

Merchant accounts are available from many of the major highstreet banks and from certain specialist providers. They normally charge:

  • a setup fee of £100 to £300
  • a monthly minimum fee (e.g. £20)
  • a percentage of each credit card payment (e.g. 1.9%)
  • a fixed amount per debit card payment (e.g. 34p)

You'll also need a payment gateway to connect your website and online buyers to your merchant account.

Payment gateways typically charge:

  • a monthly fee of £10 to £20 (including some free transactions)
  • a fixed fee of 10p to 20p for each transaction after that

2. Use a Third-Party Payment Provider (Bureau)

If you're setting up a new business, you may find it difficult to get a merchant account. In that case, a good way to start taking card payments is using an all-in-one service such as PayPal or WorldPay.

These so-called "third-party" payment providers bundle a merchant account and payment gateway into a single package. This is typically a little more expensive than having your own merchant account.

You'll generally pay a fixed fee per transaction, plus a percentage of the transaction value. For example, 20p + 2.9%.

See our payment gateway comparison table to see which provider would be best for you.

Accepting Credit Cards In-Store (Cardholder Present)

If your customer is present in your premises, they can insert their credit card into a hand-held credit card machine. This reads the chip on their card. The customer can then enter their personal identification number (PIN) to authorise the payment.

This sort of payment is known as a 'cardholder present' transaction (CP).

You can get credit card readers from various suppliers, typically bundled together with a card processing service.

Accepting Credit Cards by Mail Order, Telephone Order, or Fax (MOTO)

You can take credit card payments by phone, fax or post (you'll see this referred to as 'MOTO', which stands for Mail Order & Telephone Order) using a virtual terminal.

A virtual terminal is a secure web page where you can enter the customer's credit card details and submit them to your payment provider.

How to Get Started

Whether you want to take card payments online, in-person, or via the phone, you can get some highly competitive quotes by using entering some details about your business here:

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