Electronic Payments

Electronic Payment Methods

Online payments

To take online electronic payments you need to get a specific Internet Merchant Service and also a Payment Service Provider to collect the card details over the internet.

Obtaining an Internet Merchant Service from an Acquiring Bank is quicker and easier if you already have "offline" card processing facilities set up with the bank. Banks can be very cautious about setting up these internet merchant accounts, especially for new businesses without a trading history. If you have no prior card processing the bank will carry out a thorough credit check (lasting anything up to eight weeks). The main high street banks will give approved businesses quotes, typically between 2-3 per cent.

A Payment Service Provider (PSP) is a "virtual" PDQ swipe card machine that collects the card details over the internet and passes them to the acquiring bank. If you want to take electronic payments over the web then you will need a PSP and this has a small transaction cost associated with it. Some acquiring banks offer PSP services as part of their product and there are other less expensive options available on the market.

PSPs generally charge:

• an initial set up fee of about £50

• an annual fee of about £150 (which might include processing 2 or 3 different currencies)

• a 1.5-2.0% charge for every credit card transaction and a fee of 20-25p for every debit card transaction, plus an additional fee for every currency being processed.