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Your Guide to Taking Card Payments In-Person and Online
Taking card payments is key to business growth, here’s how it works in-person and online.
Taking card payments is key to any business that wants to grow its profits. The modern consumer is opting for card payments more and more as time goes on, with 2023 seeing a massive 24.5 billion debit card transactions in the UK alone. This only means one thing: if your business isn’t taking card payments, it’s running the risk of being left behind.
This guide isn’t just aimed at businesses yet to adopt card payments. If your company does currently take card payments, it could still find itself being left behind if it fails to access markets that could aid in its growth. What if, for example, there’s a gap for your product or service online but you’re only taking card payments in your shop? If this is your business, then you’re also in the right place. See the drop-down menu to the left of this page to navigate to the section of this guide that is most applicable to you.
Getting Started With Card Payments
If you’re new to the world of card payments, or you want to open a new avenue with which to take them, the first thing you’ll need is a merchant account. Merchant accounts come in various shapes and sizes. Some are dedicated to online sales, while others work solely with payments made in person. Whatever type of merchant account you choose, it will need to suit your business and the way it takes payments.
In addition to a merchant account, which is essentially the place where your takings get processed, you’ll need the means to actually accept payments. If this is for your physical shop, it’ll be a card machine, and if it’s your online shop it’ll be an online payment gateway or virtual terminal. Once you have all of these things in place, you’re ready to start accepting payments via card.
Setting Up Your Merchant Account
Your merchant account is a key component of taking sales via card whether it’s in-person or online. If you already take card payments in some way, you’ll already have one set up so you’ll know the role they play. If you don’t already have one, or you’ve been using a service like PayPal to accept payments, it’s important to understand how they work.
Your merchant account acts as the halfway house for the money you take via card. It’s the place in which money sits while checks are carried out before it can be released to your bank account. Merchant accounts are provided to your business by what’s called an acquiring bank, this is the company that maintains your merchant account and ensures you are paid the money you make.
There are a whole load of acquiring banks out there, and each one will offer different kinds of merchant accounts to your business. Your choice of merchant account is one of the key choices you will make for your business, so you need to choose one that works for you and doesn’t cost too much.
You will need to consider several factors when choosing your merchant account, including the length of the contract and the quality of customer service. You don’t want to sign up to a merchant account only to stumble across issues and then find that customer service is below par and there’s a hefty exit fee.
Want to know more about merchant account fees?
If you want to know more about merchant account fees, you’re in luck. We’ve written a merchant account fee guide that breaks down all of the associated fees like card processing fees, payment gateway fees, card machine rental, and more. Check it out to find out all you need to know.
Choosing a Card Machine
With your merchant account set up, the next piece of the jigsaw is choosing your card machine. Also known as PDQ machines, card machines come in all kinds of variations, just as is the case with merchant accounts.
There is a huge choice of card machines out there. Some are portable, some are basic, some print receipts and some are attached to a smartphone. With a list of options so big, it can be hard to know where to turn. In these situations, it’s best to be led by your business’s needs. If, for example, you run a busy restaurant and take payments at your tables, then a portable card machine would be ideal. A lot of merchant account providers also provide card machines and point-of-sale systems, so the process of setting up your card payments is made simpler.
Generally speaking, all PDQ machines are either countertop machines, which remain stationary and connect to a larger point-of-sale system, or portable machines, which can be moved around and are connected to a point-of-sale system via an internet connection.
Recent years have seen an increase in the popularity of mobile card machines, which work largely like portable machines but connect to a smartphone or tablet. They offer maximum simplicity and minimum hassle to the businesses that use them, and you’ll no doubt have seen them in small businesses on the high street. Popular brands of mobile card machines include Square and SumUp which have moved to dominate that space.
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The type of card machine you choose will depend on the nuanced factors that affect your business, and you’ll need to consider how your card machine will fit into the way your business works. One good thing is the card machine you choose will probably accept contactless payments, so you’ll be able to access the market that saw 18.3 billion contactless payments made in the UK in 2023.
Remember though, whether you buy them outright or rent them, all card machines come with a cost. Some costs are ongoing, like card machine rental and transaction fees, whereas others occur on a one-time basis, like when you buy the card machine upfront. Being fully aware of all the fees you’ll need to pay will be extremely important when you’re choosing your card machine.
Taking Card Payments Online
Obviously, you don’t need a card machine to take payments online. You do, however, need the online equivalent, which is an online payment gateway. Payment gateways are the principal facilitators of online payments and, although they are used by some physical payment systems, they are mainly associated with online payments. They are not the same as virtual terminals, which are only used for taking payments over the phone and involve a slightly different process.
How Do Online Payment Gateways Work?
When a customer purchases something from your online shop, they enter their card details into the checkout page on your website. This information is sensitive, so it’s then encrypted and sent to an online payment gateway. The gateway verifies the transaction with the customer’s bank and, if approved, transfers the funds to your merchant account.
Depending on the website builder your business uses, you may already have an option of payment gateways ready to be switched on. Sometimes, though, you will need to find one yourself or use one provided by your merchant account provider.
Just as many merchant account providers also provide card machines, many of them also offer online payment gateways. What’s more, online payment gateways are often added on for free by your merchant account provider, though transaction fees will still apply.
Want to know more about payment gateways?
You already know that integrating a payment gateway into your website means your business can offer a seamless and secure shopping experience for its customers. But, if you want to know more about what they are, how they work, and how to find the best one for you, read our guide on payment gateways.
Next Steps for Taking Card Payments
With all the above things in place, your business will be able to take card payments both online and in-person, but before you do, you need to ensure you are going to be doing it safely and securely.
You should use robust security measures on your website to encrypt data, firewalls to prevent unauthorised access, conduct regular security audits, educate your staff about security best practices and implement policies to protect customer information.
You have a responsibility to ensure fraud risks are kept to a minimum and all the necessary steps are taken to ensure your customers are protected from any unnecessary risks. Should one of your customers fall victim to fraud through a failure on your side, you could be charged a significant fee and, worst of all, suffer damage to your business’s reputation.
FAQs
Do I need a merchant account?
While there are ways to accept card payments without a merchant account, the alternatives can often cost more and end up having more complications.
If you want to find out more about merchant accounts, read our guide on everything you need to know about merchant accounts.
How much does taking card payments cost?
The amount you pay to take card payments will depend on several factors, such as your industry, the length of time you’ve been trading for, the type of merchant account you have, and the card machine you choose.
You can get fully informed about the kinds of costs you can expect to pay by reading our guide on merchant account fees.
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