Getting Ready to Take Payment Via Debit & Credit Cards

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Getting Ready to Take Payment via Debit and Credit Cards

Many people don't like Paypal, especially if they're buying from your website rather than from ebay. The solution is to get a merchant account so that you can take debit and credit card payments.

This takes quite a lot of organising, and to be honest I found it all quite stressful. It's one of those processes where every time you ring someone you have to give all the information all over again, and they still find something extra that you need to do/fill in/ask for/tell them. It's a real PITA, you just need to be patient.

This guide describes what I did.


If you belong to a business organisation such as the National Market Traders' Federation (NMTF) or the Federation of Small Businesses (FSB) they have packages which you may find suit your needs. I went for the FSB package as it is a much better deal and on the whole I found them more knowledgable about the process.

You will need four things -

  1. a business bank account - no merchant account provider will pay money into a private account under any circumstances.
  2. a gateway system if you want to take credit/debit card payments via your website.
  3. a merchant account provider - if you want to take these payments online and face-face/over the phone you will need two accounts, which can be provided by the same provider.
  4. a card-reader unit, which can be fixed (you can't move it about at all), portable (you can move it about your premises) or mobile (you can take it anywhere).

Stage 1 - Join the FSB

Although this is not compulsory it will save you money - but you must do this before taking any of the other steps to benefit. It costs £100 subscription plus £30 registration fee. I find them quite pushy; they want to come and see you, but you can do everying over the phone if you are firm with them. Emphasise that your primary interest is in taking credit cards and they will ensure that Co-op, Streamline and 123Send are advised so that they can contact you direct. Joining takes approximately a fortnight to get your temporary number and another fortnight to get your permanent number.

Stage 2 - Open your business bank account

I went for the Co-op as they provide free banking for life, have an ethical approach and if you already bank with them for your private needs then it's easier to transfer money between accounts. This takes approximately ten days to do and costs nothing, and takes a further two-three weeks for all your stationery to arrive in dribs and drabs. You can set up access at nominated Post Offices if you don't have a Co-op branch near you.

Stage 3 - Arrange your merchant account(s).

If you go via FSB they will contact Streamline for you, who will then ring you to take your basic details and give you a reference number. Once you have your business bank account you then ring them with the details and they will set up the merchant accounts that you need. I have two, one for e-commerce and one for face-face/telephone payments.

Stage 4 - Contact your GPRS provider

If you go via FSB, 123Send will contact you if you specify that you want a GPRS unit. They take your basic details and send the relevant forms which you return as soon as you have your bank details. They will then send you the GPRS unit which contains a SIM so that when you take a card payment it dials up for you, and also a manual (zip-zap) unit for any black-spots areas where the unit won't work (like your mobile phone). They offer Vodaphone or O2 as routine, but will also offer Orange as GMS only. This takes approximately four weeks to do and has a £25+vat set-up fee.

Stage 5 - Set up your gateway

I use ProtX as this was recommended by FSB and my web-designer, and is free to set up. You will be asked to specify which card-types you would like to take; I opted not to take Amex and Diners Club as they are dearer and take longer to forward the money to you; Amex are now charging £4.50 per mailed statement (but not for on-line ones). It takes approximately 48 hours to set up and you then have to do some test transactions. If you wish to be 3D-Secure enabled, this takes a further fortnight but you can still take payments during this latter period.

Stage 6 - notify your website designer.

I told mine in advance that I was doing all this, so that she was prepared. It then took her 24 hours to adjust my site.

All told, the process took approximately two months.


Once you're set up the fees are approximately as follows, but may vary depending on the volume of trade that you do and the types of cards that you accept -

  • merchant account - 1.9% for credit cards and 30p per transaction for debit cards initially, which is then reviewed after six months, and annually thereafter; you should  be able to reduce these rates to 1.4% and 22p respectively.
  • ProtX - £20+vat per month for up to 1000 transactions per quarter, or 10p per transaction if you do more than this. You should note that they do not charge pro-rata for part months, so if you go live on 31st of the month you'll still pay the full month's fee (as I found out the hard way).
  • 123Send GPRS unit - £25+vat per month, payable quarterly in advance, or you can purchase the unit for £499+vat plus £9.95+vat per month if you prefer.
  • Stationery for your GPRS unit, approximately £1 per roll.

General notes

  • Bear in mind that you are just one of many to these firms, and you need to keep on top of the process. For instance, Streamline set my e-commerce account for Worldpay rather than ProtX which delayed matters for a week or so.
  • 123Send will send you Streamline forms to complete. DO NOT COMPLETE THESE FORMS OR YOU WILL NOT GET THE FSB RATES.
  • All of the firms were fine to deal with, particularly ProtX, apart from 123Send, whom I found less than professional in some aspects, although to be fair, they have been very professional in subsequent dealings.
  • 3D-Secure is the on-line equivalent of Chip'n'Pin but has received almost no publicity. The first time that a buyer uses a 3D-Secure enabled site he/she is directed to 3D-Secure to set up a password, which is then requested for any further transactions at sites which have been enabled. Although this is not widely used so far, it will be rolled out more over time. This protects the seller as the fraud liability shifts from the retailer to the card-issuer.
  • If you have a business account specifically for card payments, don't forget to make sure that there's enough money in the account to cover the direct debits associated with the process.

If you have found this guide helpful, or if you think others would find it helpful, please click the Helpful button below. If you feel it could be improved, please contact me with your views.

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