Accepting online payments

Set up an internet merchant account

Guide

An internet merchant account (IMA) is a type of account that enables you to accept customers' credit and debit card payments directly online.

There are other ways of processing credit and debit card payments for online sales, including online payment processing services, and online market places. These also enable you to receive payment from customers. Make sure you check any ongoing charges, such as monthly fees and transaction charges.

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Several banks and processors offer IMAs. These are referred to as merchant acquirers or acquiring banks - see find a bank to process your online payments.

Even if you already have a merchant account for face-to-face transactions, you will still need one specifically to accept online payments directly from customers' credit or debit cards.

Card users will visit your internet shop to order your goods or services and make payments, and the funds will usually be in your bank account after three or four working days.

Beware of fraud

Online card payments are classed as 'card-not-present' transactions, because you can't physically check the card or the cardholder. If a transaction proves to be fraudulent, the money will be reclaimed from your bank account - this is known as a chargeback. Even if a card-not-present transaction is authorised by the cardholder's bank, this doesn't necessarily guarantee payment.

To help guard against fraud, where a cardholder claims that they did not authorise a payment, check to see if your online payment card processor can offer the card scheme's authentication service - MasterCard SecureCode and Verified by Visa.

The costs

Acquiring banks will charge for their services. There may be a sign-up fee of around £200, and day-to-day charges may be a fixed fee in the case of debit card transactions or a percentage of each transaction for credit cards.

In addition, where you are using a payment service provider, they will charge you for their service.