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Using a payment-processing company

Payment-processing companies obtain payment from your customers' credit and debit cards on your behalf and forward the money to you. They offer a useful alternative for businesses who have a smaller turnover from card transactions or who can't open a merchant account with an acquiring bank.


Payment-processing companies relieve you of the admi­nis­trative burden of managing customers' card details and running a merchant account.

  • They save you from having to set up secure payment systems.
  • They have less strict application procedures than a merchant account requires. For example you will not usually be required to supply the same level of detailed information about your business plan, trading history and suppliers.
  • Your application can be processed much more quickly than for a merchant account.


  • Customers can see that the payment is not going directly to you even though they may be conducting the transaction through your website.
  • Payment-processing companies hold payments for a settlement period of 30-60 days before they reach your account.
  • Charges are generally higher than for a merchant account. However, costs are falling and the market for these services is competitive.

If a card is used fraudulently, the value of the transaction will be reclaimed from your business but you may be able to get insurance to cover this risk.