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On-line payments

Are you ready for the rush? Online shopping is set to quadruple by 2020, when it will account for almost 40% of all UK retail sales, up from just 2% in 2002.


According to research from the price comparison service, uSwitch, by the year 2020, internet sales are expected to hit £162bn.

So if you're considering a move to on-line trading, or about to start, check out our three-step guide.

Step 1
Create your website and on-line catalogue, which will be your shop window for products and services. Make sure your website includes a shopping cart element, which allows customers to choose what they want to buy.

Step 2
Set up a merchant account with an acquiring bank. This will allow you to take card payments via the web and process payments.

Decide what type of account you need. To accept transactions over the internet, you need an Internet Merchant Account.

To take payments via mail order or over the phone, you will need a Customer Not Present account. And to take payments in a shop you would need a Cardholder Present account.

There are currently nine UK acquiring banks, all with different requirements and fees. To be accepted, you will need to provide details about your business, including estimated figures for online trading, your company's history and suppliers' details.

Acquiring banks usually charge a set-up fee, as well as daily fees such as a commission fee for credit cards and a flat rate for debit cards transactions.

Step 3
Select a payment service provider (PSP). This will provide the software to enable you to take electronic payments via the Internet, and provide a secure link between your website and your acquiring bank, keeping your customers' card details secure during transactions.

Costs will vary according to the level of account you need and the volume of transactions you carry out.

You may also have to shop around to find a PSP that is compatible with your e-commerce software.

Some acquiring banks offer PSP services as well as merchant accounts, so always research and compare the offer from different providers to find the best deal and the most appropriate product for your level of business.

Look on the Web for online payments comparison tools, which can do much of the initial legwork for you.

And once your on-line business and business history with your bank is established, you can usually renegotiate rates.
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