Merchant Accounts

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Merchant Accounts

If you’re considering taking customer payments or looking for a better deal on card transactions and online payments a merchant account is where it usually begins. Taking online payments securely and safely is crucial for many businesses.

How Merchant Accounts Work

Merchant account payment transactions are processed when a customer presents her card at point-of-sale. Whether this is via card reader in-store, through an ecommerce platform or over-the-phone.

  1. Customer card details are entered or read by a card reader and encrypted together with the details of the transaction and relevant card scheme (e.g. Visa or Mastercard) and are sent over secure connection to the acquiring bank.

  2. The relevant card scheme attempts to authorize the transaction with wth issuing bank (the customer’s bank), checking the customer details are correct and that sufficient funds exist in the account.

  3. The response from the issuing bank and card scheme are used by the acquiring bank to send a response back to the card reader or POS system to say the payment has been authorised and the transaction is complete.

Merchant Account Types

To perhaps oversimplify things a little, UK card processing services today can be arranged into two categories:

Casual and Pay-As-You-Go

Usually without a long-term contract, some merchant services providers will offer to process customer payments for a flat rate, often with no monthly fees. These can be ideal for small businesses or people starting off. However the transactions fees are high, which doesn’t suit businesses with card turnover above £1-2k per month. These providers can be further categorised by the type of payment processing options they offer. For example most will provide the ability to take online payments from customers, but not necessarily payments face-to-face or payments over-the-phone.

Merchant Accounts

Requiring a contract and variable fees often based on the volume of transactions, payment transaction types and which business sector you’re in, these merchant service providers are the old school. However, for a company with all but the most modest monthly transactions a merchant account is by far the cheapest option in the long-run. Although many merchant account providers are currently advertising “no setup fees”, they still have termination fees, monthly fees and further charges. Taking this into account for a company with over a given number or value of payment transactions per-month, the savings on cost-per-transaction outweigh the other fees.

Merchant accounts for customer payments Face-to-Face

Face-to-Face Payments

Face-to-Face payments are taken over-the-counter, at table or anywhere the customer, the payment card and merchant are present in the same location. Face-to-face payments are usually processed using card reader technology such as a PDQ, card reader attached to a till or payment terminal or via a mobile phone app and card reader.

Merchant accounts for online payments

Online Payments

Online payments or e-commerce transactions are made through a secure online store or online payment processing app where the customer and their card are not in the same location as the merchant at point-of-sale, a CNP or Card Not Present transaction. Email payments are offered by some providers but this is generally by providing a link to an online payment processing app that a customer can visit to enter their card details securely.

Merchant accounts for phone payments

Payments by Phone

Payments by phone when the customer, their payment card and the merchant are not at the same location at point-of-sale, a card not present transaction usually facilitated by the customer telephoning the merchant while the merchant performs the card transaction using a virtual terminal or software program to send the payment details securely to the card processor.

Payment Gateways

For businesses wanting a comprehensive ecommerce solution, including a payment gateway that integrates into most shopping carts. A typical payment gateway package can vary from £0 per month to £20 or more depending on the number of processed transactions per month. Call us for more details on the best payment gateway for your business.

Virtual Terminals

Virtual terminals are ideal for businesses who want to take credit or debit card payments over the phone, where the cardholder is not present. Virtual terminal systems can be operated via any web enabled device and funds will be transferred to your account within three working days. Contact us for more information on the right cost package for your business.

Payment by Email

If you are looking for a secure way of receiving payment before dispatching the goods, why not email your potential client a “pay by click” link. Simply email a link to the customer and they will be taken to a payment portal where they will be able to securely input their credit or debit card details. Once they click “Pay” your business will be notified of the payment transaction. Once authorised, you can be confident of a secure transaction and release the goods or services to the customer.

“I cannot speak highly enough of IMS”

I cannot speak highly enough of the entire process especially the service and advice from Darren. Competitive pricing whilst tailor suiting to your needs Process for me was a little daunting and I had no idea how to proceed The communication by the team were excellent Thank you so much

Zoey - 14th Jan 2021

“Excellent service and knowledgeable”

Excellent service and knowledgeable I had a quotes from other card merchants much higher rates I got my account setup and card terminal within a week Definitely highly recommend Independent merchant service

Kai Mi Rice - 9th Jul 2020

“Great honest service “

Great honest service I would reccomend to everyone who s searching for a small company whom cares to put you first Thank you for being honest and help me in finding the best option for my business

Genaro Basilica - 26th Jun 2020