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Moving To Accepting Credit Card Payments? Here’s How To

Moving To Accepting Credit Card Payments? Here’s How To

Constantly getting asked by customers if they can pay by credit card? Find out how to begin accepting credit card payments in this article.

9th October 2018
Reading Time: 4 minutes

Congratulations! Your business is growing and you are ready to transition into Accepting Payment by Credit Card. This may seem like a confusing process, especially with all the technical jargon out there and the mass overload of information. Hopefully, this ‘how to’ guide can help you navigate the options and steps that you need to take in order to set up credit card processing for your small business. If you need help starting a small business from home, you should also check out this article.

Using a Payment Gateway and Merchant Account to Accept Payment by Credit Card

The basic transaction flow when using a payment gateway and a merchant account is as follows:

Customer Account <-> Payment Gateway -> Merchant Account -> Business Account

In simple terms, the payment gateway communicates with the customer account to determine whether a transaction can be approved based on the available funds in the customer’s account. The payment gateway is responsible for processing the card details and information. Once it approves the transaction, it transfers the money into the merchant account. Depending on the frequency of settlement and the holding period, the money will then be deposited into your business account where the funds will be available.

For this option, you will need to set up a merchant account and payment gateway.

1. Set up a Merchant Account

A merchant account is a dedicated bank account that is used to store money from a credit card transaction. The merchant account will be linked with your business account.

This does not necessarily mean that you need to set up a merchant account with the bank that you are already doing business with. When choosing the merchant account provider, you may want to compare merchant account fees, including:

  • Transaction fees – may be flat fee or percentage per transaction
  • Monthly minimum fees – whether there are fees if you don’t reach a minimum number of transactions per month
  • Statement fees – whether the merchant account provider will charge you in order to provide a statement
  • Early cancellation fees – whether the contract is lock in or has a minimum term
  • Annual fees – fees for maintaining the account
  • Set up fees – fees for setting up the account

Also consider:

  • Customer support
  • Comprehensiveness of the service and what is offered
  • Whether the merchant account supports specific payment gateways
  • Whether Independent Sales Organisations (ISOs) are a more suitable option for you

2. Choose a Payment Gateway Provider and set up an account

A payment gateway is the software that securely transmits payment details and data between the customer account and the merchant account. These payment details and data can be processed through an online payment page, in person or over the phone for example. You do not need the physical card to be able to take credit card payments using this option.

Some merchant account providers support a specific range of third-party online payment gateways, which are already integrated into their Internet Merchant Account.

There are many providers in Australia so be sure to check reviews, rates and fees, and compatibility. Look for a provider that is PCI compliant to ensure that the customer payment data is secure and encrypted. Consider all the fees associated with setting up accounts, upgrading accounts, maintenance fees or account cancellation fees, as well as whether customer support is free.

You can set up an account directly through the Payment Gateway Provider’s website or by contacting them.

3. Connect the Payment Gateway to your Merchant Account

Once you have both a payment gateway and a merchant account, you will need to link the two. Ask your merchant account provider how this can be done.

Step Four: Connect the Payment Gateway to your business or store

Ask your payment gateway provider how this can be done.

Processing Credit Card Payments in Store

If you wish to process transactions in-store, apply for an EFTPOS terminal from a payment processor.

A payment processor is the bank that actually processes the payment request at Point of Sale (POS). The payment processor is often also your merchant bank, although it does not necessarily have to be. However, you should note that some banks may charge excess fees if you choose to link their EFTPOS terminal to an account you hold with a separate bank.

Generally, you will have the ability to choose the device that you want to use, and to choose whether you want to integrate the device into your business’ POS system.

Using a Third Party Processor to Accept Payment by Credit Card

This involves a similar process option one, except it does not require you to set up a merchant account so the setup process is easier. The transactions will be held in an online account instead. You could see it as an ‘all-in-one’ solution that combines the gateway and the account into one service. One of the biggest third party processors in Australia is PayPal.

Some advantages:

  • Quicker transaction processing
  • Cheaper initial costs in relation to monthly fees or set up fees

Some disadvantages:

  • Don’t settle funds daily so there may be a delay
  • Long-term fees are usually higher


It is important to consider all the options and decide which one best suits the type of business you own. Using a payment gateway and merchant account to Accept Payment by Credit Card may be more suitable for your business in the long-term, if costs are a priority to you. This may not always be a viable option though, and there is a lengthy application process involved because you will most likely be asked to provide financial details and be assessed for risk.

If you want something that is quick and easy to set up, then a third party processor might be better for you. Further, if you need to take payments at POS in a physical store, it is essential that you look into getting an EFTPOS terminal to process those transactions.

There are a multitude of options out there, the hardest part is comparing them and deciding which one is best for your business. Either way, transitioning your business into Accepting Payment by Credit Card will be beneficial to not only your customers, but also your business.

Don’t know where to start? Contact us on 1800 529 728 to learn more about customising legal documents and obtaining a fixed-fee quote from Australia’s largest lawyer marketplace.

Daphne Zhou

Daphne Zhou is a legal intern at Lawpath. She is currently completing a combined Law and Communications degree at UTS and is interested in the way the law can be shaped by new legal technologies.