Accepting debit and credit cards
Set up a merchant account
The first step to accepting credit and debit card payments is to set up a merchant account - these are not bank accounts as such, but accounts that allow card payments and chargebacks to be made to a merchant-nominated bank account.
Ten banks - known as acquiring banks - offer merchant accounts. Most are divisions of high street banks. Ask your existing bank whether they offer merchant accounts, though you do not have to use the same bank to process card payments, so shop around.
You can also consult a list of acquiring banks on the Electronic Payments website - Opens in a new window or find contact details for acquiring banks on the Retailers and Cards website - Opens in a new window.
Before setting up a merchant account for you, your acquiring bank will request a wide range of information. This is used to assess your business and to determine the level of charges you'll have to pay for each transaction. You may be asked to provide information relating to:
- your business history and performance
- business accounts
- your forecast turnover
- expected average transaction values and volumes on credit and debit cards
- transaction frequencies
- the type of goods you sell
- the proportion of transactions you expect to receive face to face, by phone, mail order, or online
- your suppliers' details
- how you deliver your goods or services
You may need to open a number of merchant accounts if you want to accept card payments for different sales channels. For instance, if you sell goods from a retail shop and through an e-commerce website you'll need separate accounts for your online and face-to-face sales. You should talk to your bank about your requirements.
It takes between one and four weeks to open a merchant account. The process may take slightly longer for start-up businesses and banks may want to see additional information such as a business plan and cashflow forecasts.
You can read a guide to online payments on the Electronic Payments website - Opens in a new window.
You can read about setting up a merchant account on the Retailers and Cards website - Opens in a new window.
Subjects covered in this guide
- Introduction
- The advantages and disadvantages of accepting payment by card
- Types of plastic card you could accept
- Accepting card payments: the key steps to take
- Set up a merchant account
- How does the card payment process work?
- The cost of accepting payment by card
- Your liability for disputed card payments
- Safeguards against fraudulent card payments
