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An Internet Merchant Account, or IMA, is a type of account that allows you to accept customers’ credit card and debit card payments directly online. An IMA is not the only option for receiving online payments; there are in fact a number of ways to do this, including online payment processing services and online shopping malls. Which payment method you opt for depends entirely on your business. If you’re running an online business that is receiving a lot of credit or debit card transactions that are simple and low risk transactions, then you will probably benefit from the flexibility that an Internet Merchant Account can provide in both operating your business and your cash flow. There are a number of banks and processors that offer Internet Merchant Accounts, these are referred to as merchant acquirers or acquiring banks. Even if you already have an Internet Merchant Account for face-to-face transactions you will still need one specifically for online payments that come directly from the customers’ credit or debit cards. Probably one of the most appealing factors of using an IMA is the speed; customers will use the internet to shop for your goods, make services and payments, and the funds will usually be in your bank account after three or four working days. While online payment transactions have become increasingly more secure it is still useful to air on the side of caution. Even when you’re using an Internet Merchant Account it is important to beware of fraud. Online card payments are considered as ‘card-not-present’ transactions, because you can’t physically check the card or the cardholder. If a transaction turns out to be fraudulent, then the money will be reclaimed from your bank account; this is what’s known as a chargeback. Even if a card-not-present transaction is authorised by the cardholder’s bank it does not mean that you have been guaranteed a payment. To help protect yourself against fraud where a cardholder claims that they did not authorise the payment, check to see if your online payment card processor can offer a card scheme authentication service. When setting up an Internet Merchant Account there are a number of costs involved. Acquiring banks will charge for their services, there may be a sign up fee of around £200, and daily charges may be a fixed fee, in the case of debit card transactions or a percentage of each credit card transaction. In addition to this there will be the costs for the services that your payment provider offers. If you require an online payment method for your business then there are a number of companies online, with which you can sign up for a merchant account and various other merchant services.
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