An internet merchant account in the UK is a contract that allows your business to collect online payments by credit card.

Most internet merchant accounts in the UK are provided by the main banks, though you do not need to apply for your merchant account at your own bank, allowing you to shop around.

The application process for a merchant account in the UK can be fairly involved, but you should persevere as the savings over the other options can really mount up over the course of the year.

You should expect to pay around 2.5% to your merchant account handler for the privelage of using their merchant account services.

What if I want a merchant account in the UK quickly? If you are desperate to start trading immediately, several companies offer what might be called bureau merchant accounts. This means they take the strain of providing the merchant account is shouldered by them and in return they charge you a bit more for each transaction. The most popular of these payment services are Worldpay, Paypal and Nochex.

OK, so I’ve got my UK merchant account setup now, what else do I need to trade online?

You’ll need a Payment Gateway

Once you’ve got your merchant account you need a way to process the transactions that come from your website. A payment gateway is an online service that allows the credit cards to be processed immediately then transfers the proceeds to your bank account.

Many payment gateways are provided along with merchant accounts, by the banks, but if you take the all-in-one merchant account and payment gateway package, you are more likely to be paying over the odds for the services. So shop around - one payment gateway that we’ve used recently that has excellent fees for small businesses is PROTX.

You’ll also need a website and shopping basket

Finally don’t forget that you’ll need to build a website and bolt on a shopping basket. This will let your customers shop happily and let you handle your orders. Don’t be tempted to try and reinvent the wheel by developing your own shopping cart, it is unlikely to be as good as anything you can buy off the shelf. Try Romancart, Actinic or OSCommerce for top quality solutions.