Payment bureau

A payment bureau or bureau account is where you sign-up for an umbrella service of a payment gateway and an internet merchant account combined.

  • Payment bureaus are one-stop-shops if you can’t get an IMA directly.
  • Customers leave your website to complete the payment process.
  • Payment bureaus limit their risk exposure by holding your funds longer than an acquiring bank.
 
 

A bureau service is the best option when, for whatever reason, you are unable or unlikely to obtain an internet merchant account direct, ie you are not able to accept cards payments directly as a business. Instead, the bureau provider is allowing you to make use of their merchant account and then passing the payments on at a later date.

This is suitable for SME customers who may not be able to obtain their own merchant accounts due to having limited or no trading history, or operate in certain high-risk sectors etc.

  • The bureau collects funds via credit or debit cards using ITS OWN acquiring service
  • The bureau collects money for multiple retailers (tens of thousands of retailers for a large bureau service) to achieve the trading volumes necessary to make the service profitable
  • The bureaus in the UK will generally accept most types of business with a business bank account and an address that confirms the identity of the business.

Payment bureaus are exposed to a far greater risk by accepting any type of business, but they offset this by withholding collected transaction funds for anything between 30-60 days when taking on a new client.

Going down this route will result in costs, outwith those for conventional transaction charges, associated with overdraft and settlement interest periods. As most fraud and refunds occur within the first 30 days after a transaction, this is a very effective means of reducing the exposure of the acquiring service that the bureau uses.

In so doing, the costs of charge-back recovery are minimised as the bureau can simply refund before the retailer banks the money. Additionally, the bureaus normally charge more for debit and credit card payments.

Why a payment bureau?

Advantages: Bureau accounts are typically less stringent in terms of the level of detail required and as a result are often quicker to set up. However, they typically have higher costs associated (you are paying for the privilege of using a third party's set-up) and you have less direct control over payment terms. For many small businesses it is often the most suitable ‘first step’ into the world of eCommerce available.

Disadvantages: Bureau providers will hold onto your money for as long as four weeks (which helps them protect and cover themselves against charge-backs) and the service and transaction fees are typically higher. All bureau services use a hosted payment page model meaning that at the point of payment your customer is redirected to their site to make payment rather than checking out and paying directly on your website.


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