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Merchant accounts services UK

Find out about the vast range of merchant accounts service providers in the UK. Compare and get the best quote today

In today’s fast-paced technology-focussed market, it’s more important than ever before that businesses are able to accept credit and debit card payments safely and securely. Whether you’re an online or high-street store, if you want to accept debit and credit card payments from your customers, you’ll need to set up a merchant account.

A merchant account is a specialist bank account that enables businesses to legally take secure payments via credit and debit cards. Acting as a holding pen for money before it is moved into your actual bank account, whenever your business takes a card payment, the money is held in the merchant account whilst the payment is authorised, before being transferred into your business bank account.

Funds are usually transferred to your account within 2 to 7 days, depending on the agreement you have with your merchant account provider.

Merchants accounting services provide security for both customers and businesses, ensuring that credit and debit card transactions are safe, whilst checking that there are sufficient funds available in the customer’s bank account before the payment is authorised.

Why you need merchant account services

Research from the PPRO Group has found that customers given the option would much prefer to use cashless options.

Some of their findings relate to customers’ feelings towards using cash versus using card:

  • 26% of people would never choose to pay cash when retail shopping
  • 25.35% of people find having to pay by cash irritating
  • 33% of people never use cash anymore
  • Card payments now account for more than half of all retail purchases

The report goes on to say that this change in feeling ‘does conclusively prove that cash is on its way out’. In light of these changes in consumer habits, it is growing clearer that retailers need to adapt to match the needs of their customers.

Using a chip and pin machine is clearly one of the best ways to provide customers with the most efficient service.


Compare merchant account services providers

When you’re investing in any financial product, it’s important to search the market and compare the products and services on offer. And, when it comes to merchant account providers, it’s no different.

The table below includes a brief overview of a few top credit card processing companies – merchant accounts from these suppliers are sure to be of an incredibly high standard.

Account SupplierLogoBest Feature
First DataFirst Data logoCustomer service
WorldpayWorldpay logoFlexible solutions
PayzonePayzone logoFast setup

There are over 60 merchant account providers in the UK, including high street banks and independent sales organisations (ISOs). With so much choice out there, it’s important to compare merchant accounts in order to find the best one for your business needs.


Considerations when comparing merchant accounts

When undertaking your merchant account comparison, there are a number of key points to consider.

  • Nature of your business – What industry do you work in? How long have you been established?
  • Type of account – How do you intend to take payments? Which account will be most suitable?
  • Extra services – Do you need additional services? What sort of extra features do you require?
  • Fees – How much can you spend? How much will you need to spend?

Your business

Firstly, the type and nature of your business. The best merchant account for you will very much depend on factors such as the size of your business, how long you’ve been established for, and your financial position, as well as your risk categorisation.

All of these things will affect the rates and products you’re likely to be offered by different providers.

Type of merchant account

You also need to keep in mind the type of merchant account you’ll need. For example, will you need to take card payments face-to-face, over the phone, by post, or online?Different merchant account services providers specialise in different types of accounts so it’s important to think about what you need before comparing who’s offering what.

Extra services

Another thing to look at is the additional services that each provider offers. Most merchant account providers also offer a range of other services, including everything from payment processing solutions and card terminals, through to virtual payments, and payment gateways.Consider which of these services will be beneficial to your business.

Merchant account fees

Finally, when you compare merchant accounts, one of the key things to consider is the fees associated with different accounts. Different providers offer different pricing structures, making comprehensive research essential.Look at whether providers charge set up and annual fees and, if they do, how much they charge. Some will charge these fees, whilst others won’t so it’s certainly worth checking.

Other fees you need to look into include transaction fees, minimum monthly fees, chargeback fees, and early termination fees. We’ll look at the fees associated with merchant account services later on.


Ecommerce merchant account services

Ecommerce Merchant Account Services
With more businesses developing an online presence in addition to or instead of their bricks and mortar stores, it’s vital that brands can take quick, simple, and secure online payments if they want to maximise sales, profits, and success.

Merchant accounts allow ecommerce sites to take customer payments online via credit or debit card. When you’re selecting the best merchant accounts for ecommerce, it’s important you get it right, especially when it comes to secure and reliable payment processing.

There are a range of online merchant account providers that specialise in providing merchant account services for ecommerce businesses. Just like merchant accounts for offline stores, these ecommerce merchant accounts allow vendors to accept payments from the leading names in credit card processing.Calling upon the services of one of these online merchant account providers will make your life much easier.

Best ecommerce merchant account companies

When considering which providers offer the best merchant accounts for ecommerce, there are a number of things to consider, including whether the proposed pricing structure is suitable for the size of your company, and whether the account supports the full range of credit card processing services you want to be able to offer your customers.

Though it is always difficult to specify which providers will be most suitable for your business, there are some options which are very popular with online businesses. Rather than being full merchant accounts in the sense that the ones included above are, these are more often known as payment gateway providers.

The three below are among the best known, and each offers a range of features to suit different businesses:

  • PayPal
  • SagePay
  • Paysafe

Of course, when choosing an online merchant account provider, it’s also important to ensure that it is compatible with your ecommerce site’s shopping cart software.

Online merchant account provider benefits

Online merchant accounts offer a number of advantages and benefits to online sellers. One of the key benefits is that they allow merchants to drive sales online – allowing them to reach a much larger potential customer base than a retail-only location.

With the ability to take multi-currency payments, stores can also securely take payments from across the globe and receive pay-outs in their native currency.So it’s important to assess the market and compare what different providers are able to offer you.


High Risk Merchant Accounts

As mentioned previously, when a provider allows you to set up a merchant account and take credit payments, they are taking on an element of risk. When you apply to open your account, they will assess this risk and decide if they want to offer you an account, and what terms they will offer it on.When assessing the risk that a potential merchant poses, a provider will typically look at factors such as the credit risk of the business, its trading history and future trading prospects, and the business sector it operates in.

Industries

A number of industries and sectors are considered to be high risk, and many merchant account providers refuse to work with them. High risk sectors include, amongst others:

  • Alcohol and tobacco
  • Airline
  • Dating
  • Gambling and adult entertainment
  • Debt management

These sectors are identified as posing a higher risk due to the fact that chargebacks and credit card fraud are more common than within other sectors.Other reasons for a business or industry being labelled high risk include:

  • Poor credit rating
  • History of bankruptcy
  • High cost purchases such as airline tickets, subscription based products or services
  • High volume businesses
  • Specific country or region that the merchant is targeting

Many start up businesses also find that they struggle to open a merchant account with a standard provider, due to their limited or non-existent credit card processing history. And this is where high-risk merchant account providers can come in.

Best high-risk merchant account provider options

There are a number of providers in the UK and beyond that specialise in providing high risk merchant accounts to businesses who have been unable to secure the service elsewhere.If you are deemed to be a high risk business, you can apply to a specialist high risk merchant account provider. These companies offer high risk merchant accounts to organisations who may not be able to access these services elsewhere.

Although high risk merchant accounts offer a number of benefits to businesses in high risk sectors, it’s important to be aware that they typically come with less favourable terms than most merchant accounts. For example, many high risk merchant account providers enforce terms such as setup fees, minimum monthly transactions, higher transaction fees, longer settlement periods, rolling reserves, and annual fees.


 

Merchant Account Fees

It’s important to remember that there are a number of merchant account fees associated with the service. Of course, these vary on a number of factors, including the chosen provider, the merchant’s business and trading history, and the level of risk that the business is thought to pose.However, the merchant account fees and charges usually involve a setup fee, a monthly charge, payment gateway fees – which are charged each time the payment gateway is used.

Card processing charges are typically the most expensive of the fees, often ranging from 1.9% through to 3.5% of the transaction value. It’s important to note that some credit cards can cost substantially more, whilst debit cards usually incur lower charges. In addition to these standard fees, you might also encounter a number of additional fees.

Chargeback fees, for example, might be applied if a payment is reversed. This can happen for a number of reasons, for example if the original payment was made using a stolen credit card, or if the transaction was cancelled by the issuing bank. When the payment is reversed, the funds are returned to the card holder’s bank and the merchant may be charged an additional chargeback fee.Some merchant account providers also require businesses to pay a deposit, sometimes as high as 10% of turnover a month for the first six months.


How to set up a merchant account

If you’ve decided you need a merchant account, you’re probably wondering how to open a merchant account. The good news is that it is a relatively straightforward and simple process, although you do need to submit a formal, and sometimes lengthy application to the account provider.

The list below includes a very brief breakdown of what is required – the section directly beneath provides a little extra information.

  1. Submit your formal application
  2. Provide required information – revenue, products, services, etc.
  3. Supply proof of website if applying for an online business
  4. Supply personal information if applying as a new business
  5. After set up, you will use your merchant ID (MID) to identify transactions
  6. Once you have an MID you can install any required equipment, including credit card machines and EPOS systems.

When you apply to open a merchant account, your application will undergo a comprehensive approvals process, after all, when your chosen provider allows you to process credit card payments, they are taking on an element of risk.

During the application process, you’ll be asked to provide detailed information on everything from your current and projected turnover, business accounts, and products and services, through to average transaction values, transaction frequencies, and percentage of transactions take by card.

If you’re applying as an online business, you’ll usually need to supply proof that you have a business website with its own hosting and domain information, rather than a personal website such as a blog. If you’re a smaller business, you may also need to provide personal information, undergo a credit check, and provide a personal guarantee on the account.

The process typically takes between 1 and 4 weeks, but in some cases, it can take up to 7 weeks. With this in mind, it’s advisable to get started as early as possible, after all, the last thing you want is to end up in the position where customers want to pay but can’t.

Once your merchant account has been successfully set up, you’ll be given a unique identification number, known as your merchant ID (MID). All transactions processed through your merchant account will be labelled with your MID.


Compare merchant accounts services

The information on this page should provide enough information for business owners and managers to make an informed decision about which merchant account service provider will be best for them.

The best way to actually decide on the best for you though, is to speak to supplier – we can help here.

Complete the form at the top of the page to get in touch with up to four top UK merchant account providers. The process is free, quick and easy and could help your business to significantly improve efficiency and income.

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