Accept credit card payments

Summary Traditional card payments take place offline. Offline Electronic payments are common and need you to have a Merchant Service and PDQ machine from your acquiring bank. There are ten basic steps to setting up offline payment.

Most high street stores can take offline Electronic payments through their credit and debit card facilities. All banks can process these transactions and some will also process Internet based transactions.

To take offline Electronic payments you usually need to apply for the appropriate facility from your bank. Links to these are provided in the Costs and Considerations section.

Here are some key electronic payment terms to consider:

Merchant service: this is the generic term for the service provided by banks that allow you to ‘swipe’ credit and debit cards at your place of business. PDQ machine: this generic term for the machine that is used to ‘swipe’ a credit or debit card. Acquiring bank: once you have ‘swiped’ the card, the customer’s details are passed to an acquiring bank for processing. The acquiring bank checks the details of the card and authorizes the transaction. The acquiring bank is the bank that provides your merchant service.

Ten steps to setting up offline electronic payment:

1. Apply to a bank for a merchant service.
2. Negotiate the costs.
3. On acceptance, pay the set-up costs.
4. Receive and install a PDQ machine.
5. ‘Swipe’ the customer’s card to collect their credit or debit card details.
6. Wait while the card details are passed to the acquiring bank for approval.
7. Ask the customer to sign the sales voucher.
8. Verify the signature and process the payment.
9. A transaction charge is automatically paid to the bank.
10. The customer leaves with the goods or service.

For electronic payment in a shop, the customer is present to sign the sales voucher. If the transaction takes place via the phone or the Internet, the customer is not present so there is an increased fraud risk.

Any merchant service (whether offline or online) is provided at the discretion of the financial institution concerned. There are few set rules as to which businesses can and cannot be approved for a merchant service. Be prepared to negotiate the product at a price that suits your needs. There is information in the Costs and Considerations section to help you with this.

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