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Setting up a merchant account

To accept credit or debit card payments directly online, you'll have to set up an Internet merchant account.

There are nine banks that currently offer Internet merchant accounts. These are referred to as merchant acquirers or acquiring banks - see the page in this guide on how to find a bank to process your online payments.

Even if you already have a merchant account for face-to-face transactions, you will still need one specifically to accept online payments.

Card users will visit your internet shop to order your goods or services, make payments and the funds will usually be available after three or four working days in your bank account.

Beware of fraud

Online card payments are classed as "card-not-present" transactions, because you can't physically check the card or the cardholder. If a transaction proves to be fraudulent, the money will be reclaimed from your bank account - this is known as a chargeback. Even if a cardholder-not-present transaction is authorised by the cardholder's bank, this doesn't necessarily guarantee payment.

The costs

Acquiring banks will charge for their services. There may be a sign-up fee of around $200, and day-to-day charges may be a fixed fee in the case of debit card transactions or a percentage of each transaction for credit cards.

In addition, where you are using a payment service provider, they will levy charges for their service.

If you don't meet the requirements for a merchant account, or it's not cost-effective for your business, you can consider using an online payment-processing company or an online shopping mall to handle card payments for you.