If you
search card merchant service provider on Google you will find tons of articles
with a wide range of claims on what’s best for customers “ who need immediate
access to funds” or “ best for brand reputation”. Let us make the decision
easier for you, for 60% of SMEs in the UK, all you need to worry about is 2
things: the price you will pay for the card machine and transaction cost, and
if you’re willing to be tied into a contract.
For the
other 40%, you may need a card payment solution that’s a little more bespoke,
if you need payment options for the occasion sale or need something that will
integrate into your e-commerce website you might need a payment provider more
suited to your needs. In this article, we review multiple providers so you can
better understand which merchant service is best suited for you.
Merchant
account service providers are a bit like choosing an electricity provider, the
quality of electricity provided is hardly going to change if you switch
providers, the main reason people switch is due to cost.
The rest of
this article will take an in-depth look at all the factors involved in
selecting a merchant service account, but if you want to skip all the reading
below and simply want to find the cheapest one, just see which of the
statements below fits you best and follow the link(s) below.
What of the
following applies statements best reflects what you’re looking for?
1) I want
the cheapest merchant service provider and I don’t mind being in a contract for
a short time.
– Who does
this statement typically apply to?
– Any
business turning over 3k a month or more.
– Use our
comprehensive search engine and get prices costs on screen here
2) I don’t
want to be tied down to a contract.
– Who does
this statement typically apply too?
– Startup
businesses, retailer with low or irregular income and those that just don’t
want to be tied down!
Compare all
PAYG merchant account providers here
What is a
merchant service provider?
A merchant
service provider is a bank specialising in card processing that provides
businesses with the capability to facilitate electronic payment transactions.
They enable
businesses to accept various forms of payment such as credit cards, debit
cards, and mobile payments, from their customers.
Merchant
service providers act as intermediaries between the business, the customer, and
the payment networks, ensuring secure and efficient payment processing.
Some
merchant services buy rates from the bank directly but do not actually provide
the card processing service. Although these companies are intermediaries they
often have cheaper rates than the bank directly, a little bit like the car
insurance sector.
What other
factors matter when choosing the best merchant service provider?
There are
several other things to consider other than price when choosing a merchant
account, although this isn’t an exhaustive list here are the elements, we think
matter most after cost:
Would you
prefer a compact card reader that effortlessly fits into your handbag and
requires no charging throughout the day?
Are you
seamless integrations and robust reporting? Whether you want your accounting
software to seamlessly plug into your merchant account or desire a wealth of
data, we’ve got you covered.
Considering
an online merchant account? While most merchant services provide an online
payments gateway, the quality may vary. Are some options superior to others?
Prioritise
reputation and brand trustworthiness? We understand the importance of a
reliable logo on your machine
Value
exceptional customer service? If you’ve had a challenging experience in the
past and want to avoid a repeat, we’re here to ensure your satisfaction.
Here’s a snapshot
of our best merchant service providers for small and large business:
How much do
merchant accounts and payments processing companies charge?
Payment
processing companies can charge a variety of fees to merchants, and the charges
will be mainly dependent on your turnover, the type of card machine you require
and if you need online services.
Card
processing fees vary massively as you will see on our merchant service
comparison engine.
Here is a
list of common fees payment processing fees charged my merchant service
providers in the UK:
Card
transaction fees: Every card payment taken incurs a small transaction fee, this
is typically a % of the total sale value. If your business has a turnover of
over £3000 this will make up the bulk of your charges. Data from our comparison
engine show card processing fees vary massively from 0.28% – 3.5%.
Card
machine/card reader fees: If you opt for a card machine (the more traditional
machine) you will pay a monthly rental from £15-£25 depending on the type of
machine you require (countertop, portable or mobile). Card readers (sumup or
izettle etc) are often one off purchases of under £30 but more expensive
varieties can cost up to £200. Card readers have more expensive transaction fees
so it’s important to compare merchant services cost of both options thoroughly.
Payment
gateway fees/online fees: Payment gateways allow e-commerce merchants to take
payments online. Online sales command 2 types of charges: an online transaction
fee, which is similar to the card transaction fee, typically 0.3%-2.25% and a
monthly charge of up to £25.
Virtual
terminal fees: Virtual terminal’s are used by merchants who need to take
payments via the phone or email. The merchant account providers will typically
charge a monthly fee of £10-£25 on top of the card transaction fee to include a
virtual terminal.
Authorisation
fees: As well as a card transaction fee (%) the payment processor may also
charge a flat fee of 1p-3p on top. KEY POINT : For a retailer with a low sale
value like a corner shop the auth fee can drastically increase the value of the
total bill.
Key Points:
For a retailer with low sale value like a corner shop with auth fee can
drastically increase the value of the total bill.
1.
Clover/Fiserv: Best all round merchant service provider.
As the UK’s
leading price comparison site for payment processing our most important review
metric is price, regardless of how you wish to take payments: instore, online
or over the phone Clover provides exceptional value. Transactions fees are
typically low, with debit card processing rates starting from 0.35%. Although a
min 6-month contract is typically required and Clover might not be best option
for startups or businesses with a turnover under £3000, for everyone else
Clover is a solid choice.
Service
levels are also outstanding, our own platform data suggests over 96% of
customers have remained with Clover 12 months after signing up with them,
suggesting real brand loyalty.
Pricing
Transaction
fees start at 0.35% for debit cards and 0.50% for credit cards (other card
processing cost may vary). Transaction fees are dependent on card turnover and
average sale value.
Card machine
costs start at £14 for a countertop terminal, up to £20-£25 for a fully mobile
card machine. ** Current offer available with up to 6 months free card machine
rental.
Online payment
gateway fee – Typically £15-£25 a month, importantly your card transaction fees
remain the same as instore.
Virtual
terminal – Typically £10 a month
Features and
ease of use
Clover has a
sliding scale for transaction costs, so as your business grows your costs will
reduce. Clover also has an excellent virtual terminal and online payment
gateway meaning businesses can scale without having to worry about using
multiple providers.
Although the
online payment gateway is not as easy to integrate or familiar for developers
as Stripe, transaction costs mirror instore fees which would mean substantially
lower costs (stripe charge 1.5% -2.5% per card transaction). The customer
journey isn’t quite as slick as Stripe’s, but we would still rate clover’s offering
a solid 4/5*
Clover’s
card machine offering is also impressive, unlike many of the outdate designs
provided by the likes of Worldpay, all Clover card terminals are touchscreen
designs, easy to use and equally easy on the eye
Pros
Market
leading transaction costs which get cheaper as you grow
One stop
shop – Clover provides modern card machines as well as
attractive online checkout and virtual terminal. All with the
same low transaction costs
Next day
settlement
Solid
customer service
Cons
Not the best
solution for those with a turnover less than
£3,000
Tied to a
card machine contract for min 6 months.
Standalone
solution not as impressive as stripe or
PayPal although significantly cheaper
2. Sumup
Air: Best for startups and retailers with low volumes per month.
Sumup
together with the likes of Square and iZettle have changed the payments
landscape in the UK over the last decade. They offer a card reader for a tiny
one-off payment (£39) with no monthly contract, providing a perfect solution
for anyone wanting to dabble with card payments. Sumup’s slightly lower
processing cost of 1.69% vs 1.75% for the izettle and Square give it the slight
edge over its rivals.
The Sumup
card reader is very easy to use, just sync to the mobile app and off you go.
The platform is extremely intuitive and customer service for startups is
outstanding.
If your
business makes sales of less than £3,000 a month or you need a backup for the
odd occasion a customer wants to make a card payment, Sumup is the ideal
solution for you. But if you’re starting to grow it might be time to switch to
a traditional merchant bank such as Clover to keep your costs down.
Pricing
Card reader
costs £39 as a one payment
Transaction
costs – 1.69%
Virtual
terminal – 2.5%
Gateway
costs – 1.4% + 25p for Uk cards
** we would
recommend using a different provider for both virtual terminals and payment
gateways due to high fees.
Pros
Perfect
solution for Startups or technophobes with a easy
plug and play solution.
Competitive
transaction fee compared to its peers
No contract
Very cheap
card reader
Excellent
customer service
Cons
Cheaper
options available if monthly turnover is
in excess of £3k
Online and
virtual terminal costs are expensive.
Not suitable
for larger businesses
3. Stripe:
Quickest way to take payments online.
Stripe is a
market leader for online payments and has made its name by providing a quick
and easy solution which integrates with pretty much any website.If you’re
looking to offer an online payment solution and your current platform doesnt
already do so, Stripe could be the solution for you.
Unlike with
most merchant services, stripe provide instant approval for most, saving time
on form filling. Stripe integrates with all major platforms including:
Woocommerce, WordPress,Magento and Drupal amongst many others.
Customer
reviews suggest the platform is very well built, reporting is outstanding and
as the platform is so intuitive, training is rarely required.
Although we
believe Stripe provides an outstanding platform, the transaction fees are
significantly higher than a merchant bank, who would typically charge you the
same card processing fees instore as well as online, with a small monthly fee
for the gateway. This is the price you pay for instant approval and for and
easy integration
Pricing
1.5% + 20p
for Uk Cards
2.5% + 20p
for Eu Cards
For payments
via link 1.2% +20p for all uk cards
Custom
pricing available for larger corporate clients
No monthly
fees
Pros
Integrates
to most platform via a plugin
Lower
developer costs
Excellent
reporting tools
Instant
payouts
Cons
Expensive in
comparison to a traditional
merchant
service provider
Limited in
person transaction offering
Won’t work
with high risk industries
4. MyPos:
Portable Card Reader – cheapest transaction costs for some.
Mypos
standalone portable card reader is an effective competitor to Sumup, Square,
and Izettle. Although the device perhaps isn’t as stylish as the other trio, it
does most things the market-leading card readers do, and with a transaction fee
of 1.10%+ 7p if your business takes few transactions but with a high sale value
(over £300) then the low % cost can bank you a significant saving!
If you’re an
established business we would still recommend an established traditional card
machine and offering like Clover simply because it’s cheaper. But if you’re a
builder who makes sales via card payment once in a while Mypos’s portable card
reader could be the right solution for you.
The other
key advantage of Mypos is that it’s a standalone device, unlike some of its
competitors’ basic card readers, mypos’s portable card reader doesn’t require
connection to a smartphone and is connected to the ether via a 4g sim card with
no monthly costs.
Mypos merchant
services have a solid backend and you can easily send digital receipts via SMS
or email directly to the customer. Settlement is instant and the app is
designed extremely well. There is a huge amount to like about Mypos as a whole.
Pricing
£39 one-off
Reader cost
1.10% +
£0.07 per transaction – Domestic and EEA consumer cards
2.85% +
£0.07 per transaction for all other cards
2.45% +
£0.07 per transaction for American Express
No monthly
fees
Pricing is
slightly different for online payments (we would recommend other options for
online sales)
Pros
No contract
and low transaction costs for high sale values
Standalone
device, no need to connect to a phone
Instant
settlement
App is cool
Cons
High pence
per transaction (PPT), expensive for low sale value
Device could
be more attractive
Competitors
have more software integrations
5. Square
Stand (iPad required): Best for retailers adding multiple items to a basket.
I know what
you’re thinking, aren’t iPads rather expensive? These days you can pick one up
for a few hundred pounds and together with the square stand, it can have a
transformative effect on your checkout journey. The key advantage to the Square
stand is that it allows you to display your products and services to create
baskets more easily.
This can
work particularly well for certain businesses like restaurants or food vans, as
you can see from the image above it makes the process of identifying what the
customer wants much easier and therefore makes the checkout process quicker and
more interactive.
The tech is
pretty smart too, the card reader is built directly into the stand and
interacts with the iPad seamlessly. The swivel stand neatly allows the retailer
to add up the products sold and swivel around for the customer to see itemised
billing and costs. The minimalist design looks great in any surrounding,
leaving your countertop clutter-free.
The square
stand won’t be for everyone, it’s more costly than other simpler merchant service
options which would work perfectly fine for most businesses but could be
particularly useful in the food and beverage sector.
Pricing
A one-off
fee of £99 + VAT for the stand (Does not include the price of the tablet)
1.75% for
all transactions
Pros
Fantastic
for retailers will big stock lists i.e restaurants
Swivel stand
looks great and easy to usehttps://cardmachine.co.uk/finding-the-cheapest-merchant-service-provider-for-your-uk-business/
Simple and
transparent pricing
Cons
Tablet is
required which can be expensive especially
if multiple
terminals are needed
Transactions
costs are much higher than traditional providers
like Clover
Requires
stock management inputs Verdict
If your
business has grown to over £3000 of card turnover per month, Clover will likely
be the most cost-effective solution for your business. They provide a wide
range of card machines and their online offering is excellent. Above all else,
the pricing is significantly cheaper than the alternative mentioned so if this
is what matters to you, stick with Clover
If you’re
just starting or require a different style of machine Square, Sumup and Mpos
now provide excellent alternatives depending on your requirements, whilst
Stripe has long been the merchant’s service provider of choice for online sales
if you want to get up and running quickly.
Source: https://cardmachine.co.uk/finding-the-cheapest-merchant-service-provider-for-your-uk-business/
