Internet merchant accounts

To take payments online you need an internet merchant account (IMA), which is a special type of bank account for accepting card payments online, as well a payment gateway. IMAs can be obtained directly from acquiring banks or included with an all-in-one bureau service.

  • An IMA is, in essence, a line of credit from a bank.
  • Acquiring banks set strict criteria and not all companies are accepted.
  • An IMA is only one half of the equation; you still need a payment gateway.

A merchant account, internet or not, is basically a line of credit rather than a bank account. The acquiring bank takes on the risk of potential non-payment of the outstanding amount when the card bill is due to be settled – or in the event of goods not being dispatched or returned (or a similar dispute arising which results in non-payment or refund).

If you already have a conventional merchant account service with your bank, then you could get an IMA fairly quickly. The bank will provide you with a unique merchant ID number (known as an MID) and that allows you to be recognised when you request money from a customer debit or credit card.

The benefits of internet merchant accounts:

  • IMAs offer a broad selection of flexible payment options. This means you will be able to accept all major credit and debit card payments online. Alternatively, you also have the option of charging the purchase to a private PayPal account and other types of personal online accounts.
  • IMAs allow you to accept payments in a wide range of currencies.
  • A trustworthy IMA provides your customers with a secure online payment option. Although large numbers of people now shop online, there is still a significant amount of shoppers who do not feel entirely comfortable paying for purchases online.
  • Using an IMA enables you to keep track of all of your transactions. Monthly statements given by merchant service providers are an invaluable tool during the self-assessment period. 

How do I go to get an internet merchant account?

There are two options
Depending on whether you are a new business with little trading history or established, whether your business plan is detailed and structured or whether convenience and simplicity is more important than a cost saving – there are two ways of getting your internet merchant account:

Option 1 – from an acquiring bank
Apply for one directly through your bank, or other high street bank. If you choose to apply for an IMA directly through a high street bank, you will need a payment gateway. A payment gateway securely handles the processing between the shopping cart, credit card company and ultimately the internet merchant account that receives the funds.

You might find that the traditional high street banks are fairly risk-averse to small businesses requesting this service and do not always have experts readily available to talk you through the process.

Option 2 – from a payment service provide
Alternatively, you can apply for an IMA through an independent payment service provider (PSP), like PayPal, SagePay or Realex Payments as part of a full online payments solution.

In both cases, the provider will assess your application business plan, evaluating any potential risks before approving you for an IMA. When starting up an IMA, you will need to be able to pay regular authorisation fees – as well as deductions that cover the risks of accepting online card payments.
View our list of UK acquiring banks

Criteria for an IMA

It should be pointed out, however, that acquiring banks have very strict criteria for accepting applications for IMAs. In order to get an IMA you could be asked to provide some or all of the following information:

  • Details of the directors or partners in the business
  • Your business plan – including details of cash flow and promotional activities
  • Details of your product or service
  • Suppliers' details
  • How you will deliver your product or service
  • Website address complete with your terms and conditions, contact details all visible
  • Estimated average online transaction values, estimated turnover from online sales and predicted number of credit and debit card transactions
  • Details of the secure server you'll use
  • Up to two years audited business accounts and trading history
  • Bank details and authority to the bank to carry out a check with credit reference agencies


  • To set up an IMA with an acquiring bank, costs will vary and there may be a sign-up fee.
  • The payment gateway fees for using the card processing or transaction services will vary and could be a fixed-fee or cost-per-transaction arrangement.
  • Our comparison service lets you compare these fees based on your own business turnover and average transaction value.

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