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How To Accept Credit Card Payments

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The GoCardless content team comprises a group of subject-matter experts in multiple fields from across GoCardless. The authors and reviewers work in the sales, marketing, legal, and finance departments. All have in-depth knowledge and experience in various aspects of payment scheme technology and the operating rules applicable to each. The team holds expertise in the well-established payment schemes such as UK Direct Debit, the European SEPA scheme, and the US ACH scheme, as well as in schemes operating in Scandinavia, Australia, and New Zealand. See full bio

Last editedMar 20222 min read

Credit cards and debit cards (bank cards) are still the main payment methods for real-world transactions. Merchants operating in the real world will generally benefit from accepting card payments. With that in mind, here is a quick guide on how to accept payment by credit card and debit card.

Do you need to accept card payments?

Before looking at how to accept payments by credit card and debit card, it’s worth asking if you need to, or if you even want to. If all, or at least, most of your business is in the real world, there is a clear case for accepting card payments. If, however, you’re (mostly) online, then it’s a judgement call.

Accepting cards requires paying both set-up fees and transaction fees. What’s more, transaction fees tend to be very high, particularly for credit cards. Taking payments through E-Wallets and/or Direct Debits is often both more straightforward and more economical.

With GoCardless, Direct Debits can be used for one-off immediate payments as well as scheduled payments (both one-off and recurring). What’s more, payments can be scheduled in advance. They are then charged automatically on the appropriate date. If you are using GoCardless as an integration with an accounting package, this will be the invoice due date.

How to accept payments by credit card and debit card

There are five main steps to accepting credit card payments (and debit card payments). These are:

Find an acquiring partner
Open a merchant account with them
Study the scheme rules
Set up the necessary hardware and/or software
Advertise your new payment acceptance channel

Here is what you need to know about each of these steps.

Find an acquiring partner

Merchants cannot contract directly with card-payment networks. In fact, smaller merchants may not even be able to contract directly with acquirer banks. You will probably have to look for a payment-scheme processor.

When researching potential acquiring partners, your first consideration is likely to be fees. These are important, and it’s vital you’re totally clear on what they are before you sign. For example, there are likely to be different charges for domestic and international cards.

At the same time, keep in mind that there is a difference between price and value. Sometimes it’s worth paying a bit more for a better overall service.

Open a merchant account with them

Once you’ve chosen your partner, you’ll need to open a merchant account with them. Be prepared for this process to involve some paperwork and hence some time to complete.

Study the scheme rules

Accepting card payments online comes with two big hazards for merchants: fraud and chargebacks. In the real world, these hazards are minimal. This is partly due to chip-and-PIN. It’s also partly due to the fact that cardholders get to see (and if necessary try) the goods before they buy them.

In the online world, 3D Secure has done a lot to reduce certain kinds of fraud. Unfortunately, there is nothing it can do to prevent some other kinds of fraud. For example, you can verify a payer but still have them claim that the goods were not received or not as described.

You also need to be aware that there will be times when there are genuine issues with purchases. Unless you handle these both promptly and professionally, there is a strong probability that the cardholder will resort to a chargeback.

Make sure that you read and fully understand the scheme rules and guidance on how to protect yourself from fraud and chargebacks. Try to implement all recommendations in full if you possibly can.

Set up the necessary hardware and/or software

If you are accepting cards in the real world, you will need a card machine. It’s important to pick your card machine with care. There are now many different models available so you will need to research which one is best suited to your business.

If you are only accepting cards online, you may not need a physical card reader. You may, however, need to update your checkout.

Advertise your new payment acceptance channel

Make sure cardholders can quickly see that they can use their cards in your store.

We can help

If you’re interested in finding out more about how to accept credit card payments, get in touch with our financial experts. Find out how GoCardless can help you with ad hoc payments or recurring payments.