Taking card payments guide
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:
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:
The person who owns the payment card. Also known as the ‘cardholder’.
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.
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’).
Part 2: Sale.
Part 3: Settling up.
Joe wants jeans…
- The jeans cost £100. Joe hands over his debit card
- Kate at ‘In Yer Jeans’ makes a sale on her card machine for £100
- Barclaycard (Kate’s acquirer) sends the authorization request to VISA
- VISA asks Joe’s bank if he has enough money
- Joe’s bank confirms he has enough for the jeans
a) £100 purchase appears on Joe’s bank statement
- Joe’s bank pass on £100, and receive 30p* from VISA
- VISA confirms sale, pass on £100, and bill Barclaycard the 30p plus a 2p* fee
- Barclaycard confirms sale, pass on £100, and charge Kate 50p (the 32p plus an 18p* fee)
- Kate prints her receipt and hands over the jeans to Joe.
* Figures are for illustration purposes only.
...And can you believe that this whole process happens in a matter of seconds?
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.
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:
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.
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:
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
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.
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.
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.