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Getting a Merchant Account in the UK

When you want to accept payments online, there's more than one way to do it.  There are various well known solutions such as Paypal and Google Checkout.  These can be a great way to get started and are ideal for some businesses, both big and small.  However, most quality online stores prefer to take credit card payments themselves.  It is certainly a more professional way of taking payments - usually it looks better, presents a better image and often it provides for a smoother checkout experience.

So what do you need before you can accept credit card payments online?

Banks will not allow your website to communicate directly with their systems, so you need to use the services of a "payment gateway".  Such payment gateways sit between the banks systems and your website and effectively process credit card payments for you.  They also provide you with an interface to allow you to do refunds, check for fraud data and monitor settlements.

You also need a merchant account in order to receive the money from card payments.  The payment gateway pays into your merchant account and then, after some delay, your bank pays this into your business bank account.

So, apart from a website, you need a payment gateway account, a merchant account and a business bank account.  These can, and often do, come from different suppliers.  There are a number of payment gateways but, in the UK at least, the choice is made easier by the dominance of Sagepay.  They provide good value for money at £20 per month and work with all the UK merchant account providers as well as most popular shopping carts (including Drupal / Ubercart for which Infomagnet developed the integration).

List of UK Merchant Account Providers

Making the choice of merchant account provider in the UK is less easy.  You probably already have a business or company bank account so often this is the first port of call however you really must shop around and compare fees - they vary enormously.  And beware; if you've not been in business for some time, merchant account providers can make it difficult for you.  Try to negotiate the setup fees as well as the percentages (for credit cards) and fee per transaction (for debit cards).  These companies should be competing for your business but it's sometimes hard to believe that's the case!

Don't be persuaded by the merchant account provider who may try to persuade you that you need to use their gateway - it's simply not true.  (Nat West Streamline and Barclays Merchant Services are particularly guilty of this.)  It always pays to use an independent payment gateway as this provides an easier transition should you change merchant account supplier and third party payment gateways are usually cheaper too.

Here is a list of all UK merchant account suppliers - contact all of them and compare quotes before deciding:

  • Lloyds TSB Cardnet - 0126 856 7100
  • Natwest Streamline - 0845 761 6263
  • Halifax Bank of Scotland - 0845 964 5055 or 0800 652 5808
  • Barclays - 0844 811 6666
  • HSBC - 0845 702 3344
  • Elavon - 0845 850 0195
  • AMEX - 0800 339 911 new business, 01273 675533 customer service option 2 then option 0 

Elavon is a newcomer to the merchant services scene and their model is a little different from the high street banks meaning that is might be easier for new businesses to get an account with them.  Their commission rates are very competitive too.

Sagepay are now marketing Elavon's merchant services and have made it possible to combine application for the payment gateway and merchant account at the same time.  There is no minimum term and the rates can be even more competitive than going direct to Elavon.  There is no tie-in either so you can always switch to a different merchant account provider and stick with the Sagepay payment gateway later on.