UK Merchant Accounts for Online Businesses

As online commerce continues to grow in the UK, more and more businesses are selling their products or services over the internet. But before any company can accept credit card payments online they must obtain UK Merchant Accounts .

What is a merchant account? Really it is nothing more than a financial contract between a business and a financial institution, often a bank. The agreement says that the bank has the permission to process the company’s card payments for a set fee or commission.

This rate is determined by a number of important factors, the single most important one being the industry that the company competes in. For example, businesses that are involved in online pornography or gambling are typically classified as high risk and they are consistently charged the highest rates.

In fact, for many of these companies it can be difficult to obtain a merchant account at all. This is especially true in the UK where the vast majority of accounts are offered by the big UK High Street banks. These revered institutions seldom get involved with risky online businesses.

This does not mean that it is impossible for a high risk merchant to find an account, but it can be difficult and quite expensive. There is, of course, a very good reason for this. These industries are known for having the highest chargeback numbers. A chargeback is when a customer asks for his money back and the service provider either has to give it to him or investigate the claim. Either way it costs the provider time or money.

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