The UK’s best merchant service providers
A merchant account is your ticket to getting paid online and off - find the right one for your business, and save by comparing quotes
In today’s fast-paced, technology-focused market, we know how important it is for businesses to accept credit and debit card payments safely and securely.
Card payments now account for more than half of all retail purchases: 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.
But, what is a merchant account?
A merchant account allows businesses to accept debit and credit cards in payment for goods and services. It’s a business-specific bank account that temporarily holds your money until it is moved to your actual business account.
There are over 60 merchant account providers in the UK, including high street banks like Barclays and HSBC and independent sales organisations (ISOs) such as Worldpay, PayPal, Elavon and First Data.
We know. That’s a lot of merchant services to compare, especially if you’re busy running your own business. That’s why we’ve gone in with a microscope for you, and found out how other small business owners are getting on with their card payment services.
Here, we can reveal the best merchant service providers overall – including the cheapest merchant accounts – giving you everything you need to take the pain out of comparing all your options, and finding one that works for you.
Or, you can save even more hassle, and hop straight to our free quote-finder at the top of this page.
In this article, we cover:
- The best merchant service providers: A comparison
- The cheapest merchant service providers
- Online merchant accounts
- High risk merchant accounts
- Merchant account fees
- How to choose merchant services UK
- Compare merchant services
- Merchant service providers: the FAQs
Merchant service providers: at a glance comparison
The best merchant account providers offer a quality service, robust protection against fraudulent credit cards, easy integration with third party accounts, and above all, low, low costs.
In the comparative table below, you’ll see that we’ve helpfully listed the merchant account fees for each provider. Merchant fees refer to the money charged by the merchant service for processing credit card transactions.
Take a look at the table to compare the best merchant services for small business in the UK:
|Worldpay offers some of the most flexible merchant services around
Worldpay fees: 1% for credit cards, 2% for debit cards + 4p authorisation fee
Worldpay claims it’s the Number One payment processor in the UK. Given that it takes care of 42% of all card transactions in the UK (a whopping 400 per second), it is certainly one of the most popular merchant service providers that we’ve taken a look at.
✅ Some of the most flexible price plans for small businesses
✅ Full merchant service provider: online payment processing, card machines and tills
✅ 24/7 customer support
❌ £15 monthly minimum
❌ 18-month contracts
PayPal merchant services
|PayPal is a trusted brand that offers instant settlement times
PayPal fees: 1.9% + 20p per transaction
PayPal is probably the best known merchant service provider. And that’s good news because it means your customers are likely to trust it as payment method.
✅ One of most recognised payment gateway brands
✅ Comes with a robust PayPal Here card machine
✅ Integrates well with third parties such as Shopify and BigCommerce
✅ Supports international cards
|Cons||❌ Some rival transaction fees are lower|
Barclaycard merchant services
|Barclays Bank is one of the UK’s most reliable payment processors
Barclaycard fees: 0.85% + 3p
Barclays merchant account includes a range of options to make taking payments quick and easy, so you can accept card payments in person, over the phone and online.
✅ Mobile Barclaycard Anywhere card machine syncs with account (as well as other desktop and portable terminals)
✅ Barclays supports a number of payment options (the main credit and debit cards as well as contactless, virtual and NFC (phone) payments)
❌ Bank transaction fees tend to be higher (though Barclays offers some of the lowest of all banks)
❌ Data security costs £2.40 + VAT per month
Elavon merchant services
|Elavon is a leading and trusted merchant service provider for UK small businesses
Elavon fees: 2.65% + 15p
Elavon has been supporting small business owners drive more sales through card payments for over 20 years now, and stands out for its comprehensive analytics to help you get squeeze more insight out of your numbers.
✅ Next day settlements available
✅ All Elavon card readers can accept Apple Pay and Google Pay
✅ Decent reporting software
|Cons||❌ Fairly noncompetitive transfer fees|
Retail Merchant Services
|Retail Merchant Services has a Trustpilot rating of 9.7 out of 10
Retail Merchant Services fees: 2.65% + 19p
As we write, over 45,000 small businesses in the UK and Ireland are processing card payments thanks to Retail Merchant Services. We like how transparent their fees are, with no nasty surprises (like early termination fees).
✅ Same-day fund transfer times
✅ Card machines and virtual terminals on offer
✅ A comprehensive payment gateway for ecommerce
✅ Free legal advice
❌ Software is less snazzy than some others
❌ £4.95 monthly statement fee
2. The cheapest merchant service providers
The cheapest merchant services for small business are often aggregate merchant accounts, which tend to have no set-up or monthly costs and some of the lowest merchant fees.
Aggregate accounts (or payment service providers) are a great way for small businesses to enjoy the cheaper merchant account fees that are usually only open to larger businesses.
They’re called aggregate because they pool the funds of several merchants (that’s you) with similar business types, so you can get a low fee even if your sales aren’t through the roof.
And don’t worry, payment service providers are completely safe – no one else’s credit score will ever affect yours.
Among the cheapest merchant services in the UK are: First Data, Payzone and Payment Sense.
First Data merchant services
|First Data is known for its top-notch customer service
First Data fees: 1.25% + 2p authorisation fee and 10p for credit cards
With a £5 monthly minimum service charge, First Data is one of the cheapest merchant service providers for small businesses and start-ups.
✅ Full merchant account solutions for ecommerce businesses
✅ Low £5 monthly minimum
✅ Till systems and card machines available
✅ Hosted payment pages provided for ecommerce sites
❌ 36-month contracts
❌ Limited customer support (not 24/7)
|Payzone is quick and easy to set up
Payzone fees: 1.3% for debit cards, 0.65% + 1p for credit cards, 3p authorisation fee
For over 25 years, Payzone has been helping small businesses keep their merchant service fees low, without missing out on decent customer service.
✅ 12-month contracts available (hard to beat)
✅ No set-up or exits fees
✅ UK customer care team
✅ Low, low transaction fees
❌ Customer support only during working hours
❌ No cash register rental
|Paymentsense is one of Europe’s most popular merchant service providers
Paymentsense fees: 0.96% for debit cards, 0.75% for credit cards+ 3p authorisation fee
Thanks to its tidy merchant account fees and decent customer service, Paymentsense is currently helping 600,000 of the UK’s small businesses get paid.
✅ Some of the UK’s lowest transaction fees (just 0.75% for credit cards)
✅ Well-rated UK customer team
✅ Capped card rates
|Cons||❌ £24.95 minimum monthly spend|
Provide merchant services for over 60,000 small and medium businesses around the UK.
Offer capped card rates as long as you’re a customer.
Offer next-day card terminal replacement.
3. Online merchant accounts
If you’re one of the UK’s growing number of entrepreneurs to set up shop online, you might just want an easy online payment system through a specific ecommerce merchant account.
This merchant account will work as your complete online payment processor, providing everything you need to start taking payments online via debit or credit card.
With the risk of card fraud, it’s important to choose a secure and reliable payment service provider that specialises in online merchant accounts, such as Stripe, Shopify or Amazon Pay.
Stripe merchant account
|Stripe is great for tech gurus
Stripe fees: 1.4% + 20p (for European cards); 2.9% + 20p (for non-European cards)
Stripe is a leading merchant service provider and online payment solution for small businesses in ecommerce, SaaS (software as a service) and subscription services.
✅ Stripe can protect you from chargebacks if you appeal
✅ Stripe’s Radar is a solid safeguard against most fraud payments
✅ Stripe’s customer support has a 48-hour response time
✅ Returning customers can save their card details and pay with one click online
❌ You need some tech skills – Stripe was designed for web developers
❌ High fees for non-European debit and credit cards
Shopify merchant account
|Shopify gives you the full package, including a Shopify card reader
Shopify fees: from 1.6%
You may already be familiar with Shopify as one of the UK’s most popular ecommerce website builders, but Shopify now lets you accept card payments online as well as off.
✅ Some of the lowest transaction fees
✅ The complete package: web hosting, online payment processing
✅ Facebook and Messenger payments also available
✅ Free 14-day trial
|Cons||❌ You need to pay extra to hook a third party payment processor up to a Shopify website|
Amazon Pay: Nice and easy but not the cheapest
|Amazon is nice and easy, but not the cheapest merchant service
Amazon Pay fees: from 3.4% + 20p
Amazon Pay is Amazon’s online payment processing service, and lets customers pay with their Amazon accounts on external ecommerce websites (like yours).
With 122 million customers worldwide (and growing), this can be a hassle-free way of getting more customers through your checkout.
✅ It’s easy to add Amazon Pay to your ecommerce site
✅ Get free fraud protection with the Amazon A-to-z Guarantee
✅ 5% of us in the UK only shop at Amazon – it’s a trusted brand to process your payments
|Cons||❌ Amazon Pay charges higher fees than some rivals|
How to pick an online merchant account
By opening your doors to customers all over the world, ecommerce merchant services often help businesses drive more sales than is possible from a bricks and mortar shop.
Here are three questions to ask yourself to make sure you’re a good match with your merchant account provider:
- Does this merchant service provider offer price plans and rates that suit my business’ size and likely revenue?
- Will I be able to accept most debit and credit cards my customers like to use (even if they’re international or contactless)?
- Is this merchant account compatible with my website’s shopping cart software?
Merchant accounts vs payment gateway providers
Perhaps you’ve also heard of payment gateway providers, but how are they different from merchant accounts?
A merchant account is really your contract with a credit card processing company – it lets you accept card payments in person (with card a machine) or online (with a payment gateway).
An online payment gateway is a specific type of card payment services for online businesses, and acts just like a virtual card machine, so your customers can pay by card on your website.
If you’re only in ecommerce, an online payment gateway like PayPal, SagePay or Paysafe might be all you need.
4. High risk merchant accounts
To cover the risk they are accepting in letting you take card payments, merchant account providers look at many factors to decide whether to offer you an account, and what terms it’ll be on.
Businesses with a good credit rating, decent trading history, sunny future trading prospects that sit within a secure business sector often have an easier ride.
Just don’t be put off by the name high risk merchant accounts. There are a number of reasons why this might be the right type of merchant services for you:
- You have bad credit (or a history of bankruptcy), for whatever reason
- You can’t prove your credit history
- You work in an industry that’s considered high risk (including gambling, dating, travel and online healthcare)
Many start-ups also find they struggle to open a merchant account with a standard provider, merely due to a limited or absent credit card processing history. And this is where high risk merchant account providers come in.
Best high risk merchant accounts
Many merchant service providers in the UK specialise in providing high risk merchant accounts to small businesses who have been turned down elsewhere.
If you’re a high risk business, you can apply to a specialist high risk merchant service. The most popular ones in the UK are: Allied Wallet, Instabill and Durango.
Here are the best high risk merchant accounts for small businesses:
|Allied Wallet specialises in online payments and ecommerce businesses
Allied Wallet fees: from 1.95%
As a global merchant account solution, Allied Wallet accepts payments in nearly 200 foreign currencies, and keeps merchants safe with robust fraud protection and PCI Level 1 Compliance.
|Instabill comes to the rescue of small businesses trading offshore
Instabill fees: Tailored quotes only
Ecommerce start-ups often enjoy quick approval from Instabill, and you can look forward international banking and international payment processing that adhere to standard merchant service procedures.
|Durango is a specialist high risk merchant account solution with fair fees
Durango fees: Contact for a quote
With reasonable rates and decent support offered by dedicated account managers for customer service, Durango is a popular high risk merchant service provider for small businesses, and offers everything from card terminals to offshore accounts for global merchants.
Getting accepted by one of these merchant accounts can be a game-changer for small businesses.
But just be aware you’re likely to face higher merchant fees (such as set-ups fees, monthly minimum charges, higher transaction fees, longer settlement periods, rolling reserves, and annual fees), even if it’s just for the short term where you are building trust.
5. Merchant account fees
Of course, the merchant account costs will vary from supplier to supplier, and our free quote-finder is designed to give you more exact merchant service quotes, tailored to your small business.
Here are the main merchant account fees to expect:
- Set-up fees – You may face a set-up fee when you open a merchant account, just like joining a gym (but often not)
- Monthly charge – Some merchant account providers charge a monthly fee or even a minimum monthly fee for their services (but your card processing fees may cover this at no extra cost)
- Payment gateway fees – The payment gateway is the online payments system you use to take card payments (if you don’t use a third party, you may pay more tan with an all-inpackage)
- Credit card processing fees – You’re charged every time you process a card payment, usually between 1.7% and 3% of the sale (there isn’t really a way of getting round this, as it covers the risk taken on by your merchant service provider)
- Chargebacks – There are many reasons for a chargeback: perhaps the customer used a stolen card, or were unhappy and asked their issuing bank to cancel the transaction (luckily, these are rare)
- Deposit – If you’re new to the game, some merchant services want businesses to pay a deposit (sometimes as high as 10% of turnover) for the first six months (these are not common, and soon disappear)
6. How to choose a merchant service provider
You’ll need a merchant account if you’re going to be accepting card payments for your business. And a good merchant service provider will help you process payments safely and affordably.
We spoke to small business owners around the UK, and here are the four key points to consider when choosing a merchant service provider:
- What’s in your business’ DNA? – What industry are you in? How big is your company? How long have you been in the game? All these factors determine your risk, and will affect your merchant service quote
- What type of payments will you be taking? – In person, over the phone or online? These factors can all determine which type of merchant account will be your best fit
- What services will you need? – Packages which include payment processing solutions, card machines, and even virtual payments are all possible (and combining them can save you money)
- What can you spend? – Taking card payments often more than pays for itself, but you’ll want to check you’re getting the best rate possible (keep an eye out for any of the fees above – not all may apply)
7. Compare merchant services
Want to make sure you get the cheapest merchant service and best merchant account for your business? To get tailored quotes for you to compare, just use our free quote-finder.
Hopefully, this page has kitted you out with everything you need to make an informed decision. The best way to really decide which merchant account provider is right for you, though, is to speak to a supplier, and compare their best quotes in three easy steps:
With so much choice, it’s important to compare merchant accounts to find the best one for your business. Get started now, and see how much time and money you can save by comparing your options.
Merchant service providers: the FAQs
How do you open a merchant account?
If you’ve decided you need a merchant account, you’re probably wondering how to open one.
The good news is, it’s simple (though you will likely need to fill in a lengthy application to check everything is in order).
Here are the six steps to getting up and running with a merchant account:
- Submit your application form – Usually online
- Provide any required information – Often details of your revenue and product or services (such as your current and projected turnover, business account details, and average transaction values)
- Supply proof of website – If you’re applying for an ecommerce merchant account, you may need to give your business website hosting and domain information
- Offer personal information – If applying as a new business (smaller businesses will sometimes need to undergo a credit check and give a personal guarantor to the account)
- Use your merchant ID (MID) – This code lets you identify transactions once you’re set up with a merchant account
- Install any equipment – Once you have an MID, you’re ready to start using any card payment processing devices such as credit card machines and electronic point of sale (EPOS) systems
How long will it take?
Opening a merchant account is easy, but the checks are comprehensive, since your merchant account provider will be taking on an element of risk in processing card payments for you.
In general, it takes between one and four weeks to go through, but in some cases it may be up to seven weeks.
The best thing you can do is get started as early as possible, so you can get on with taking card payments, and growing loyal customers.
What are merchant account fees?
Merchant account fees are charges made by a merchant service to the vendor when credit cards are processed. The fee itself is calculated as a percentage of each credit card sale.
Debit card transactions often come in at a discounted charge, and are oftentimes free.
How do you take payments online?
To take online payments, your business will require a Payments Service Provider (PSP): a system that allows you to receive online payments.
In other words, a PSP is a payment gateway that automatically processes card transactions – protecting both company and customer from fraud – and takes a small cut for itself in the process.
Popular payments service providers include the likes of Stripe and PayPal. Take a look at our Stripe payments review for a side-by-side comparison of the two.
By now, you should have an understanding of what a merchant service provider is, how it can benefit your business and why your small business should be looking to take card payments (if you aren’t already doing so).
We appreciate it can be tricky to find and source quotes, so we’ve developed a handy quote finder that’ll cut-down your time spent hunting for the best deal. Simply fill in the form at the top of the page to be put in touch with the best provider at the best price for your business today. It’s simple, you provide the answers, we’ll provide the quotes.