Taking card payments guide

Beginner’s guide to taking card payments

Why should I take credit/debit card payments?

Allowing your customers to pay by card is an easy way to improve customer experience and increase your sales.

Now might be the right time to start taking card payments if any of these apply to you:

  • Your customers frequently ask: ‘Can I pay by card/contactless?’ … and you have to answer: ‘No, sorry.’ 
    Did you know that cashless payments overtook the use of notes and coins in 2015? Taking card payments improves customer experience and makes your business seem more professional
  • You’re dependant on an overdraft or loan, because cash flow is tight.
    Taking card payments lets you accept payment straight away, meaning you could be less dependent on credit until the customer pays their invoice
  • You’re spending too long chasing payments.
    No more nagging for payment. No more customers insisting “the cheque is in the post”. With card payments, the money is usually in your account within 3-5 working days
  • You’re losing out on sales when people don’t carry enough cash.
    Cash limits the amount your customers can spend. Card payments allow customers to make spontaneous purchases that they might not have been able to if they just carried cash. Who hasn’t nipped to the shops for a pint of milk and ended up buying much more?  
  • You’re spending time and money by holding physical cash.
    Save on the security costs around looking after cash deposits. And forget about trips to the bank to deposit cash

There are also several common myths that our customers often mention when they first ask about taking card payments...

How do card payments actually work?

Card payments – who's involved?

There are five parties involved when your customer pays using a card:

Your customer.
The person who owns the payment card. Also known as the ‘cardholder’.

Your company.
The business making the sale. Also known as the ‘merchant’.

Your payments company. 
Also known as an ‘acquirer’. An acquirer, e.g. Barclaycard, will provide merchant services, including supplying a card machine, processing payments for you, and putting the money in your bank account.

Customer’s card scheme.
The payment network which the customers card is linked to, e.g. Visa, Mastercard and American Express. Card schemes link the acquirer and the issuing bank.

Customer’s bank

Customer’s bank.
The bank that issues your customer’s credit/debit card.

The card payment process in action

A card payment happens in three parts:

Part 1: Checks (also known as ‘authorisation’).

  • A customer uses their credit/debit card to pay for something using a card machine
  • The acquirer (e.g. Barclaycard) then sends that payment request securely to the card scheme (e.g. VISA) The card scheme then checks with the customer’s bank to see if the customer has enough funds to make the purchase, and that the card isn’t blocked…

Part 2: Sale.

  • If the payment is accepted, the money is taken from the customer’s bank account and held by Barclaycard.

Part 3: Settling up.

  • At the end of each week day, the acquirer sends the money from all the merchant's sales to their bank account. The money normally arrives in the merchant’s bank account within 2-3 working days.
  • The merchant service fees for each sale are added to the merchant statement and are billed at the end of the month. The merchant usually pays these fees by Direct Debit.

Here’s an example of a card payment in action:

A card payment in action

...And can you believe that this whole process happens in a matter of seconds?

  • What are my options for taking card payments?

    There are three main ways to take card payments:

    Face-to-face payments. This involves a physical card machine (also known as a ‘terminal’, ‘PDQ’, or ‘POS’), which can either be: stationed on a countertop; portable around your premises using Bluetooth; or used out and about using a SIM card handset or an app on your mobile phone.

    Online payments. Allows customers to pay for things using a bolt-on payment system which is integrated into your website (known as an integrated payment gateway).

    Phone and mail order payments. Involves a website-based payment system (acts like a ‘virtual’ card machine), which is accessed by one or more of your staff. The customer’s payment details are taken over the phone and input into the online portal, which processes the payment.

    Most card machines or virtual payment solutions should be able to do the following:

    • Take credit/debit card payments, including contactless for face-to-face payments
    • Take payments from digital wallets such as Apple Pay and Android Pay
    • Process refunds
    • Run ‘end of day’ accounting, allowing you to total up your card sales for the day
    • Accept American Express cards (if you choose to add this to your account – Ts&Cs apply)
  • What to bear in mind in terms of security

    Security, fraud and PCI DSS can sound scary – they’re important things you need to get to grips with but we're here to support you every step of the way.

    PCI DSS stands for ‘Payment Card Industry Data Security Standards’. Simply put, these standards help protect your data from being stolen by fraudsters. If you want to take card payments, your business will be expected to comply with these standards.

    It’s important that you take PCI DSS seriously, or you could be fined, and customers could lose trust in your ability to keep their details safe. Don’t worry – even the smallest companies are able to meet PCI DSS standards.

    Many of the PCI DSS rules are simple common sense. For example: ensuring your till receipts (which may contain sensitive customer data, such as a customer’s card number) are locked away or properly disposed of. There are also steps you can take to protect yourself against fraud.

    For more information, visit our page on fraud & security help.

    Fraud & security help
  • How much does it cost to take card payments?

    The cost of taking card payments depends on several factors, including: the volume of transactions, the kinds of transactions you’ll be processing, and the fees your acquirer charges. The merchant service fees and considerations generally come under the following categories:

    Contract length.
    At Barclaycard, our typical contracts are 12-18 months, and we can sometimes offer a pay-as-you-go contract. Some other providers have contracts as long as five years.

    Set up fees.
    Usually a flat, one-time fee to cover the costs of setting up a new account  

    Card machine, or service rental fees.
    Usually a flat, monthly fee

    Transaction fees.
    Also known as ‘merchant service fees’. Each time you take a payment, you get charged a small percentage of the payment’s value. These charges can vary depending on the type of transaction (e.g. debit cards generally cost less to process than credit cards) and the volume of transactions (higher volumes can get you cheaper rates). Transaction fees normally cover the ‘interchange fee’ (as shown in stage 6 in the diagram above ) that an issuing bank charges for their services. You’ll also be charged a transaction fee for each refund.

    Other fees.
    May include fees for things like: disputed cardholder transactions (also known as a ‘chargeback’), PCI DSS fees, or early cancellation fees.

    If you’d like to get a merchant services quote from Barclaycard and get full details of our charges, please call our experts on 0800 158 5149 or request a call back.

    Call me back
  • What are the next steps?

    If you would like to start taking payments with Barclaycard, you will need to:

    Get a quote.
    First, you’ll need get an accurate quote based on your business’ needs. We’ll need to know certain information about your business, such as: your expected annual sales income; average sale amount, the percentage of sales that are to other businesses compared to the percentage of sales that are to consumers.

    If you’re happy with your quote, you can then apply for that product with us. We have to carry out some standard financial checks before completing your application, so you’ll need to have details of any of your company’s directors to hand.

    At Barclaycard, we have a range of ways you can begin taking card payments from your customers. Call us on 0800 056 1289 (Monday to Friday 8.30am-6pm, excluding bank holidays) to speak to one of our advisors.  

    Call me back

1 - Cashless payments overtook the use of notes and coins in 2015 - https://www.bbc.co.uk/news/business-32778196