Obtaining
a conventional Merchant Account
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Traditionally, to be allowed to accept
credit cards you must be granted Merchant Status by
a major bank and obtain a Merchant ID from them.
What is involved?
All major high street banks have what is known as an
acquiring bank e.g. NatWest has 'Streamline', LloydsTSB
has 'Cardnet', Barclays has 'Barclays Merchant Services',
HSBC has 'HSBC Merchant Services' and so on.
All these acquiring banks are able to issue a Merchant
ID and allow you to start taking credit cards
in your business. They will authorise or decline
each customer transaction, collect any payments on your
behalf and pay the money into your bank account.
There are obviously
costs involved - typically the bank will include
setup charges, monthly or annual fees, monthly rental
of a terminal for you to process card details, and maybe
insist on a dedicated telephone line for the terminal.
You will also be charged a percentage of each transaction
which they process, you may have a minimum monthly volume
of business imposed, and in some cases you will have
to provide a substantial bond or deposit as extra security.
Unfortunately that's the good news! - before you can
even start
accepting credit cards you will have to
satisfy the bank that you are worthy of their trust
in the first place, and you will usually have to provide
two years audited accounts and demonstrate a sound business
track record in order for your application to proceed.
(Which is why some banks also require a cash bond and
an extensive business plan if you cannot satisfy all
that, for whatever reason)
Even if you achieve all that you will then be able
to accept card payments in your 'traditional
business' only. If you want to set up a web site
to accept card payments you will find that the acquiring
banks will not accept any information coming from you
via the Internet. The banks will only accept information
from a web site
which has been processed by an approved Payment
Service Provider (PSP).
Let Web Merchant take
care of all this for you with a Full Merchant Facility
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