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 20151? 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...

Myth #1: “Taking card payments isn’t worth the cost.

Truth #1: While there are costs to taking card payments, the benefit is that you may also get more customers. There are also hidden costs to handling cash, such as the time and security needed for trips to the bank to make deposits.

Myth #2: “Taking card payments would make things more complicated. I’d have to do loads more admin, put in extra security and change my business set-up.”

Truth #2: It’s not a lot of extra work to reconcile card payments on top of cash – the process is almost the same. Your card machine can simply print out the total you’ve taken by card at the end of each day. Easy!

In terms of your set-up, taking card payments only requires a phone line or internet connection. And even the smallest of businesses are able to meet security requirements.

Myth #3: “Technology changes all the time – there’s no point investing in a card machine when new technology could come out tomorrow.”

Truth #3: It’s true that payment technology is always moving forward, but even innovations such as smart wallets and contactless payments still need a physical device to take the payment.

At Barclaycard, we’re always keeping track of changes in technology and payment trends, regularly updating our services to keep you up to date.

How do card payments actually work?

Card payments – who's involved?

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

Card payments – who is involved?
Your customer.
The person who owns the payment card. Also known as the ‘cardholder’.

Card payments – who is involved?
Your company.
The business making the sale. Also known as the ‘merchant’.

Card payments – who is involved?
Your payments company.
Also known as an ‘acquirer’. An acquirer, e.g. Barclaycard, will supply a card machine, process payments for you, and put the money in your bank account.

Card payments – who is involved?
Customer’s card scheme.
The payment network which the customer’s card is linked to, e.g. VISA, MasterCard. 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 acquirer’s 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

Joe wants jeans…

  1. The jeans cost £100. Joe hands over his debit card
  2. Kate at ‘In Yer Jeans’ makes a sale on her card machine for £100
  3. Barclaycard (Kate’s acquirer) sends the authorization request to VISA
  4. VISA asks Joe’s bank if he has enough money
  5. Joe’s bank confirms he has enough for the jeans
    a) £100 purchase appears on Joe’s bank statement
  6. Joe’s bank pass on £100, and receive 30p* from VISA
  7. VISA confirms sale, pass on £100, and bill Barclaycard the 30p plus a 2p* fee
  8. Barclaycard confirms sale, pass on £100, and charge Kate 50p (the 32p plus an 18p* fee)
  9. 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
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.

Computer mouse icon
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
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.

If you’re not sure which of the above options to pick, try our online product selector tool, which will suggest a product based on your needs.

Choose your product

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)
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
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 fees and considerations generally come under the following categories:

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 fees and considerations generally come under the following categories:

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

Transaction fees
Transaction fees.
Also known as ‘Merchant Service Charges’. 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
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 quote from Barclaycard and get full details of our charges, please use our product selector tool.

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

Get a quote.
First, you’ll need to 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.

Get set up.
If everything checks out, then you could be set up and taking card payments within a few working days of receiving your paperwork.

At Barclaycard, we have a range of ways you can begin taking card payments from your customers. Our dedicated product selector tool will help to suggest a product based on your needs, or you can call us on 0800 056 1289 (Monday to Friday 8.30am-6pm, excluding bank holidays) to speak to one of our advisors.  

Choose your product
1 - Cashless payments overtook the use of notes and coins in 2015 -