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Payment processing solutions for UK small businesses

4 July 2018 Product Information

Everything you need to know about payment processing

As a small business owner, taking cards just makes sense. Cards have overtaken cash as the UK’s most popular form of payment. In fact, 77% of total retail sales are now paid for by card and it’s estimated that by 2024,16 billion card transactions will be taken a year. So what does this actually mean for your business? For starters, card processing can increase your customer base…sounds ideal, right?

When it comes to payment processing, there’s more than one way to do it. You get paid using card machinesonline payment gatewaysvirtual terminals and email systems. So which one is best for your business? Luckily, we’ve got you covered. This handy guide tells you all you need to know about payment processing, so you can start taking card payments in no time.


What is payment processing and how does it work?

Getting paid might seem instantaneous. One touch of a contactless card and – boom – you’re paid. Well, a lot happens behind the scenes first. Card processing is a series of important steps that makes sure your customer’s card payment is authorised quickly and securely. It really doesn’t take long, most of these steps happen in a few seconds.


  1. Authorisation


Payment processing begins as soon as the customer enters their PIN or touches their contactless card against the terminal. This triggers a request from the terminal, sending a signal through the phone line, internet connection or mobile network (depending on your card machine).


  1. Acquirer

The request then arrives at the acquirer. “But what’s an acquirer?”, you might ask.  

Well, they act as the banking partner for the business. This means they create and manage the merchant account, which receives the transaction details and payments from the customer’s bank before paying it into a business’s bank account.


  1. Card company (round 1)

The acquirer do their bit before forwarding the request to the card company (like VISA or MasterCard). At this point, the card details are checked – most importantly, they try and work out if this is actually the card holder.


  1. Customer’s bank

The request then goes to the customer’s bank who verifies the customer’s details and makes sure there’s enough cleared funds for payment. Now the transaction does a complete u-turn and heads back towards the business to confirm the payment can go ahead.


  1. Card company (round 2)

Before the full circle is complete, the request goes back to the card company one more time. The card company need to confirm they have the same details as the customer’s bank. It’s worth noting that the card companies aren’t just middlemen. They process millions of transactions every second and make sure everything is safe and secure.


  1. Acquirer (round 2)

The acquirer now receives payment from the customer bank account. Confirmation is sent to the card machine and the customer will see an approval message on the screen before the receipt is printed. All of the above happens in just 2-3 seconds.


  1. Settlement

Now for the getting paid part. It normally takes 2-3 days for the customer’s bank to send the money to the acquiring bank. Once the acquiring bank receives the payment, they’ll transfer the funds to the business’ bank account. That’s payment processing.


Choosing how to process payments

So now you know a bit more about how card processing works, here’s a few ways to get paid…


Card machines

If your business deals with customers face-to-face, then a card machines is just the ticket. The most popular type is a countertop card machine, which allows you to take cards from your till – they’re fast, reliable and perfect for retailers, cafes and beauty salons.

Need to move around a bit? Consider a portable card machine. By connecting to Bluetooth or WiFi, you’ll be able to take card payments to your customers – it’s ideal for restaurants and coffee shops where bills are settled at the table.

Travel a lot? A mobile card machine lets you process payments anywhere in the UK thanks to a SIM card and GPRS connection. It means less driving around with loose change, great for couriers or taxi drivers.  Whichever card machine you pick, you’ll need to pay a rental fee – this amount will depend on the type of card machine you use and the nature of your business. You can find out more about the costs here.

Payment gateway

Want to sell from your own website? To process payments, you’ll need a payment gateway acts as a secure link between the website, the customer’s card issuer and the seller’s merchant account.

Most payment gateways can be tailored to work with your website, this can help improve your customers’ experience. For example, you can integrate different types of plugins with the most popular shopping carts, making it easier for your customer’s to pay. You can also customise and brand your checkout pages, which can help boost conversion (so more sales). You can find out more here.

Virtual terminal

Customers simply call with their credit or debit card details to pay you. It’s pretty simple. Using a secure online dashboard, you can enter their payment details on your computer, tablet or mobile. It’s ideal for restaurants and takeaways who want to get paid before delivery.

By being able to take payments directly from your customer and enter payments manually, you can go some way to boosting your conversion rate. A virtual terminal will easily integrate with accounting software for more accurate figures and less human errors. You can find out more here.

Pay by email

By emailing your customers a secure link, all they need to do is click it and enter their card details. There’s no online shop needed, so when it comes to card processing, you’ll save a pretty penny. 

If you’re hotelier or tradesperson, paying by email is an easy way to invoice customers and settle bills. Simply log in to an online portal from a computer or mobile device and send an email with the invoice and payment link. You can even brand your emails to fit the look and feel of the rest of your marketing materials. You can find out more here.

Merchant Account

Whichever online payment system you pick (payment gateway, virtual terminal or pay by email) you’re going to need a merchant account to actually accept the money. The cheapest options start as low as £8.30 per month.


Why choose Paymentsense as your payment processor?

Payment processing might sound a bit complicated, but we’re here to keep it simple for you. That’s why more and more people are choosing to take card payments with us. Not only can we give you the lowest rates out there, you’ll get both excellent customer service and peace of mind  that’s why we’re Europe’s largest payment processor. We’re quick too, we get you up and running with a card machine in just 3 days (and online payments in only 24hrs). With us, card processing is a snip.

Why wait? Take card payments in just 3 days.