Online payment bureau

Summary A payment bureau is the easiest way of taking payments online as they do all the work for you. Bureaus accept most type of business and have a simple application process. However, they take 30-60 days to clear merchant’s funds and charge more for their service.

A Payment Bureau like Worldpay or Netbanx is a one-stop solution collecting and processing the card details on behalf of the business without requiring an Internet Merchant Service with an Acquiring Bank or a separate PSP to be set up. Their simple application process makes bureau services a popular choice for online payments and an ideal solution for a SMEs first step into e-commerce.

A bureau collects funds via credit or debit cards using ITS OWN acquiring service. The bureau collects money for multiple retailers (tens of thousands of retailers for a large bureau service) to achieve the trading volumes necessary to make the service profitable. The bureaus in the UK will generally accept most types of business with a business bank account and an address that confirms the identity of the business.

A bureau reduces the risk of accepting almost any type of business through one principle mechanism - the bureau holds the collected funds for 30 -60 days (settlement period) in the initial period of accepting a business. There is a cost to this in terms of cash flow to your business and possibly interest charges. You can accurately model these costs using the free online payments comparison tool. as factors such as settlement period and overdraft interest are included in the cost calculations.

As most fraud and refunds occur within the first 30 days after a transaction, this is a very effective means of reducing the exposure of the acquiring service that the bureau uses. In so doing the costs of charge-back recovery are minimized as the bureau can simply refund before the retailer banks the money. Additionally, the bureaus normally charge more for card payments, at least 4% for credit cards and 50pence per transaction for debit cards.

Advantages

• These services will accept most types of business
• Trading record or length of trading will not usually be an issue
• Fast turnaround for applications - a few working days compared to weeks - for a new merchant acquiring applications

Disadvantages

• Merchants’ funds are held for 30 - 60 days
• Transaction charges are higher( 4-8% )

Doing business over the Internet can be daunting but if you enable customers to pay for products online, you can generate actual revenues and make a return on the time and money you have spent developing your website. A bureau service is the simplest way to begin taking payments online.

You can also get the same service from a Post Paid Account provider as they use trusted third parties to bring all elements of the service under one roof. This usually includes all elements of payment management from billing the customer to chasing any late payments.

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