UK Merchant Accounts

Most companies wishing to accept credit card payments via their web sites will quite naturally approach their bank in the first instance, because afterall, banks are experts in all things financial aren't they?

 If that's the route you are going to take, be prepared for a few obstacles to be placed in your way.

First of all, banks don't like risk and the Internet poses a great risk for them - or so they think.

Banks believe that the Internet is full of crooks lying in wait to steal credit card information and then go on a massive spending spree with their money - or at least that's what they'd like you to believe. The truth of the matter is far different.

However, assuming that your business banking manager is up to date on his or her customer service training, you might find that the early stages of your application are not too painful at all.

A good manager will know who to put you in touch with, generally a specialist Internet Merchant department who can answer all of your questions and progress your application. Maybe this switched-on manager will even provide a nice reference to prove that you are not some kind of cyber-crook.

If that's the case, then you are well on your way.

The first bank I tried was Barclays and to be honest, it wasn't a bad experience once I found somebody who would take responsibility for progressing the application.

Barclays operate a system called EPDQ which is quite a nice system. It includes things like fraud checks, an online area where you can check money coming in and out and of course, because it's a specialist service, they can charge heavily for it too!

Getting their Internet merchant account was in addition to a normal off-line merchant account, so effectively, it was like paying two sets of fees. It wasn't expensive, but all of these set up fees add up!

Once the account was granted, it was then necessary to contact one of the bank's "development partners" and obtain assistance in integrating EPDQ into my web sites to allow payments to be taken on line.

This is where the fun started, as they had about 80 development partners at the time and now probably have even more.

So who to choose? Surely one was the same as another?

Well, it seems not. These development partners provide the interface (that's the bit between your web site and the Barclays system) and of course, every single one of them offers a better system than the next provider!

Barclays were no help - they can't be seen to favour one company over another.

So, I sent an email to every provider and asked what they could do for me and my little cottage industry that I ran part time (at that stage).

The replies came back thick and fast during the next week, with quotations ranging from £200 set up (plus ongoing fees) to several thousand Pounds (plus ongoing charges) - all this on top of the couple of hundred Pounds I'd spent getting the account in the first place.

In the end, being a small operator with an unproven product (it was an eBook I was hoping to sell), I chose a small company from the list. In fact, it was a one-man operation who operated a hosted shopping cart, which is essentially what most of the other companies were offering.

It was a basic system, but it suited my needs and it worked quite well.

My business was not a resounding success and although all costs were covered from my sales, the ongoing charges of about £40 a month were eating into my meagre profits.

A different solution was needed if I was going to make any money online.

I looked at Lloyds - but it was more complicated than Barclays.

I looked at NatWest who operate their merchant services through a Royal Bank Of Scotland subsidiary called "Streamline" - who in turn process via an interface provided by Worldpay.

My worry about all of this was that if something goes wrong (as it's prone to do occasionally), who do you blame?

A few calls to smaller banks revealed thew fact that quite a few of them process via Streamline and Worldpay.

Contact Worldpay Direct And Save Money

It's easier and probably less expensive to forget the banks initially and go direct to WorldPay. As one of the world's leading processors, there is hardly any risk involved and their support is first class. Set up costs £100 and then you have 4.5% of each transaction to pay as a fee, which is deducted at point of sale of course. In additon, there is an annual fee of £160.

If you already have an off-line merchant account from your bank, then the fees can be considerably less, as the Worldpay system can be configured to work with it. The total cost will depend on your actual sales volumes.

So, with few of the UK banks prepared to actually invest their own money into developing something useful for their customers, it's no wonder that in the UK at least, we are stuck with high charges and little choice.

All in all, if you really do need your own merchant account and are absolutely committed to the idea of having to everything yourself, then at a push, I would recommend Barclays system.

Having looked at Streamline, I remain unconvinced.

The one thing that ALL UK banks and processors have in common is their insistence that you cannot run an adult oriented or gambling site. Given that most of the profits on the Internet are generated by these two industries, it seems that British banks are still too prudish to recognise a profitable business when they see one.