There were a total of 19.7 billion debit and credit card transactions made in the UK in 2019 by cardholders from both the UK and from overseas countries. This reflected a total spend of £721.7 billion. Simply put, in today's world, the ability to accept credit and debit card payments is vital to your business and expected by your customers.
In order to accept these payments, whether face-to-face, over the telephone (MOTO) or online, you will require a merchant account.
If you’re completely new to accepting credit or debit card payments, you’ll need to apply for a merchant account before you can start taking card payments. A merchant account is a specific bank account that acts as a holding pen for money before it is moved into your actual business bank account. Merchant Accounts are normally sourced from a Merchant Acquirer or an Independent Sales Organization (ISO)whom will provide you with a Merchant ID (MID), which is unique identification number assigned to the business. You would normally have a MID for each channel that you wanted to accept card payments, whether that be face to face, e-commerce or over the telephone.
Simply put the Acquirer will ‘Acquire’ the money from the customers bank account and ‘settle’ it into the business account associated with the merchant ID (MID), in conjunction with the card issuer. The Acquirer will charge a percentage on the transaction value for providing this service (Merchant Service Charge). These rates can vary between card types (Visa, Mastercard, AMEX etc) and whetherthey are debit, credit or commercial/business cards.
Is it very important that a business understands the charges associated with a merchant account. Gala Technology can provide some free and independent advice, cutting through the industry jargon and help you set up the right merchant account for you, with the right provider. Click here to find out how.
In addition, to the acquirer they are 4 other stakeholders involved in the payment cycle.
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