Best merchant service providers and credit card processing companies 2021

You need merchant account and credit card processing service is to get paid. Find the best providers for your business by comparing UK market leaders

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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 – even more so since the pandemic, where emphasis has shifted to quickly and hygienically, too.

Card payments now account for more than half of all retail purchases. So whether you own an online store or a high-street shop, if you want to accept debit and credit card payments from your customers, you’ll need a merchant service provider.

A merchant service provider is in charge of credit card processing. Whether a customer is paying by card machine or online, it’s the merchant service provider who provides the merchant account, hardware, and software products needed to process that payment.

If this is a strange new world to you, we can help you out. Startups has been offering advice and guidance to small businesses for 20 years, and our team of experts are on hand to match you with top merchant account services.

Simply complete our quick and easy form to tell us a bit about your business, and we'll send you tailored quotes from payment processors that match your needs.

The best UK payment processing companies

The best credit card processing companies UK businesses should consider are:

Credit card processorBest for
WordlpayBest credit card processor for scalability
PayPalBest credit card processor for international payments
SumUpBest credit card processor for brand new businesses
SquareBest credit card processor for mobile payments
BarclaycardBest credit card processor for brand familiarity
PaymentsenseBest credit card processor for customer service
StripeBest credit card processor for online payments
InstabillBest credit card processor for high risk businesses

Best credit card processing companies comparison

We’ve specified key information for each credit card processor, making it easier for you to compare their merchant services.

 Dedicated or AggregatePay monthly or Pay-as-you-goCustomer ratingContract length
Worldpay Dedicated Both3 stars12 months
PayPal AggregatedPay-as-you-go3 starsNo contract
SumUpAggregatedPay-as-you-go4 starsNo contract
SquareAggregatedPay-as-you-go4 starsNo contract
BarclaycardDedicated Both3 stars18 months
PaymentsenseAggregatedBoth4 stars12 - 60 months
Stripe AggregatedPay-as-you-go4 starsNo contract
Instabill Dedicated Both3 stars12 - 36 months

Merchant service providers – or indeed, credit card processing companies – either supply dedicated merchant account services or aggregated merchant account services.

Dedicated merchant accounts are reserved for your funds only, whereas aggregated merchant accounts pool funds from various businesses into one account to be processed.

While some merchant service providers offer their own merchant account services, others partner with acquiring banks or payment facilitators to offer the full payment product.

You can find out more about dedicated and aggregated merchant accounts on our page on how to take card payments.

Top merchant account services – the need to know

Discover more information on the best merchant service providers in the deep-dives below.

1. Worldpay

Best merchant service provider for scalability

Card terminal services Card terminal fees0.75 - 2.75% per transaction
Payment gateway services Payment gateway fees£19/month plus fee per transaction
Virtual terminal services Virtual terminal feesFrom £9.95/month

Worldpay prosWorldpay cons
Flexible price plans

Full merchant service provider

Tough security credentials

24/7 customer support

Processes transactions in 1-3 days
£15/month minimum fee on top of pay-as-you-go charges

18 month contracts (although pretty standard)

The lowdown

Worldpay is a top merchant service provider, offering card payment services to businesses around the world. In fact, it processes as many as 400 card transactions every second.

Offering scalable pay-as-you-go and contracted payment solutions, Worldpay is ideal for businesses that experience low transaction volumes, high transaction volumes, and anything in between.

As an all-in-one provider, businesses can use Worldpay for card reader, payment gateway, and virtual terminal services.

And as a dedicated merchant account provider, it also offers some of the toughest security credentials going, so customers can purchase from you with complete confidence.

Read full review

2. PayPal

Best merchant service provider for international payments

Card terminal services Card terminal fees1 - 2.75%
Payment gateway servicesPayment gateway fees3.4% plus fixed fee
Virtual terminal servicesVirtual terminal fees£20/month plus fee per transaction

PayPal prosPayPal cons
Great for online businesses

Integrates with lots of ecommerce platforms

Supports international payments

Own merchant account services

Processes transactions in 3-5 days
Complex pricing structure

Preferential rates only for PayPal transactions

PayPal Here really only suitable for smaller businesses

The lowdown

With over seven million active accounts in 190 markets, PayPal is a popular option for small businesses looking for simple card payment processing.

Everyone has heard of PayPal, so your customers should be reassured when they’re entering their payment credentials into either the PayPal Here card reader or PayPayl’s payment gateway services.

PayPal offers pay-as-you-go rates and accepts payments in multiple currencies. You’ll just have to spend an afternoon getting to grips with its pricing page before you commit to it as your merchant service provider!

Similarly to Worldpay, PayPal is an all-in-one provider, offering merchant account, point of sale, payment gateway, and virtual terminal services all under one roof.

3. SumUp

Best merchant service provider for next day deposits

Card terminal services Card terminal fees1.69%
Payment gateway services Payment gateway fees2.5%
Virtual terminal services Virtual terminal fees2.5%

SumUp prosSumUp cons
Transparent fees

Easy to set up

Easy to set up an online store

Good customer service reputation

Processes transactions in 1-3 days
Fees not cost effective for high transaction volumes

Only offers payment gateway services for its own online store

The lowdown

Going strong since 2011, SumUp is a no-frills credit card payment processor for startups and small businesses.

Setting SumUp up as your payment provider is super-easy. It simply involves downloading the SumUp app onto your mobile device and waiting to receive its mobile card reader.

Businesses can choose to input their inventory into the app and use it like a stripped down point of sale system. They can even choose between a basic card reader and one with an integrated receipt printer.

In addition to its card reader, SumUp also provides virtual terminal services, and payment gateway services via its ecommerce offering. Businesses can also use SumUp for remote invoice payments.

Read full review

4. Square

Best merchant service provider for mobile payments

Card terminal servicesCard terminal fees1.75%
Payment gateway services Payment gateway fees2.5%
Virtual terminal services Virtual terminal fees2.5%

Card terminal servicesCard terminal fees1.75%
Payment gateway services Payment gateway fees2.5%
Virtual terminal services Virtual terminal fees2.5%

The lowdown

Square has come a long way since its launch in 2009. Not only does it provide smart, modern POS systems, but it also provides businesses with end to end payment processing.

Investing in a payment processor with a merchant account service is convenient for retailers, as you can have your point of sale system and merchant service with one provider.

Square’s app integrates with tonnes of third party applications and POS equipment, meaning small businesses can create and scale their payment system in line with their needs.

While Square does offer payment gateway services, businesses are currently limited to using Square’s online platform.

However, it’s worth noting that the provider has recently teamed up with WooCommerce to offer payment gateway services for WordPress sites.

Read full review

5. Barclaycard

Best merchant service provider for brand familiarity 

Card terminal services Card terminal feesBased on transaction volume
Payment gateway services Payment gateway feesFrom £20/month
Virtual terminal services Virtual terminal feesFrom £15/month

Barclaycard prosBarclaycard cons
Pay-as-you-go and contracts available

Range of card readers available

Scalable solutions that grow with your business
Monthly contracts may not be cost effective for low transaction volume businesses

Barclays Anywhere payments app can be glitchy

The lowdown

As one of the forerunners in mobile payments, Barclaycard and its range of desktop and mobile card readers are a pretty safe option for businesses wanting to take card payments.

Barclaycard offers 18 month contracts, and hires out card readers for a set fee per month – this can range from around £24 – £45.

Transaction fees are dependent on the volume and value of transactions you take, but as a general rule, bank rates are more cost-effective for businesses that can guarantee a higher volume.

Barclays also offers its Barclays Anywhere product, which is designed for trades people, single-person businesses, and contractors looking to take payments on the go.

6. Paymentsense

Best merchant service provider for customer service

Card terminal servicesCard terminal feesBased on transaction volume
Payment gateway servicesPayment gateway feesFrom £9.95/month
Virtual terminal services Virtual terminal feesFrom £9.95/month

Paymentsense prosPaymentsense cons
Fully integrated payment solutions

Countertop, portable, and mobile card readers available

Four star TrustPilot rating

Guarantees great rates

Processes transactions in 3-5 days
Zero pricing information on its website - get in touch for bespoke quotes

Long contracts and high termination fees

The lowdown

With over 60,000 customers to its name, Paymentsense is doing pretty well for itself. It offers businesses merchant services and full scale point of sale systems.

As a merchant service provider, Paymentsense negotiates cheaper rates with merchant account providers on your behalf. It also offers businesses a range of card machines, in addition to payment gateway and virtual terminal services.

In addition to negotiating cheaper processing fees, Paymentsense does well on the customer service front. With a four star TrustPilot rating, a 24/7 helpline, and plenty of positive reviews to its name, businesses that choose Paymentsense should be in safe hands.

The downside is that Paymentsense does like to tie you into longer contracts, and it can charge you a hefty fee if you want to terminate your contract early.

7. Stripe

Best merchant service provider for online payments

Card terminal servicesCard terminal fees1.5% + 10p
Payment gateway services Payment gateway fees1.4% + 20p
Virtual terminal services Virtual terminal fees1.4% + 20p

Stripe prosStripe cons
Supports online and physical payments

Very transparent fees

Create your own payment package

Low processing fees for EU cards

Processes transactions in seven days
Takes seven days for payments to reach your account

Premium support services cost £1,400 per month

The lowdown

Stripe started life as a payment gateway provider, and this is something it still does extremely well. You can choose between Stripe’s integrated payment gateway or a hosted payment gateway, and add features to your package – like additional security layers and local payment methods.

In addition to its online payment services, Stripe now facilitates physical card payments. It offers two card readers – one from BBPOS that is best suited for businesses requiring a lite payments solution – and one from Verifone, which is better for countertop setups.

While Stripe does offer some ‘off-the-shelf’ solutions, the software side of the product is primed for those looking for a specialist payment solution. Providing you have developer knowledge – or you’re prepared to employ someone who does – you can build and integrate your own custom payment solution.

Read full review

8. Instabill

Best merchant service provider for high risk businesses

Card terminal servicesCard terminal feesOn application
Payment gateway services Payment gateway feesOn application
Virtual terminal services Virtual terminal feesOn application

Stripe prosStripe cons
Accepts high risk businesses

Accepts businesses with low credit scores

Full payment solutions available

Particularly suited to the dating and gambling industries

Processes transactions in 14 days
High risk means longer transaction processing times

Full payment solutions not available to retail businesses (shops)

The lowdown

Instabill is a fairly small US-based merchant service provider that enables high risk businesses around the world to start taking payments. It partners with merchant account providers in your respective country to negotiate the best processing fees, and then allows businesses to take payments through its platform.

As with any high risk merchant account provider, fees are worked out based on individual circumstances. And because payments are deemed high risk, they take much longer to process too – up to two weeks.

Instabill particularly invites businesses that operate within the online gambling and dating industries, although any non-retail ecommerce business that operates within a high risk industry is encouraged to get in touch.

How to choose the best merchant service provider

While we’ve outlined some of the best credit card processing companies for you to compare, you should be 100% sure that you’re picking the right provider for your business – especially if there are long contracts involved.

If you’re just starting out, it may be best to use a credit card processor that doesn’t tie you into a contract. Square, SumUp, and some services from WorldPay and PayPal are good options.

If you’re looking for a more sophisticated payment solution from the offset, WorldPay, Stripe, and Barclays are worth considering. These payment providers offer top notch security, analytics platforms, and offer full online and physical payment packages.

To get an even clearer idea of the best merchant service provider for your business, it’s also worth using Startups.co.uk’s comparison tool. Instead of you digesting lots of information, the tool guides you to the right provider based on your answers to a few simple questions.

Our tool helps businesses to compare credit card processing companies that they know are suited to their needs from the get-go, saving you time, and giving you the confidence that you’re making the right choice.

Credit card processing provider FAQs

Here we answer the most common questions people ask when researching merchant service providers:

Which credit card processing companies are best for small retail businesses?

Small retail businesses with lower turnover are best looking at processing payments through a payment facilitator like SumUp or Square. Instead of paying a set amount each month on a contract basis, you pay a small fee per transaction, so when you’re not selling, you’re not paying.

Payment facilitators offer basic and scalable point of sale setups, and enable you to get your business online via their own platforms. For example, businesses that sell through SumUp can set up a SumUp store, while businesses that sell through Square can set up a Square store.

Which credit card processing companies are best for small hospitality businesses?

Small hospitality businesses – like corner cafes and ice cream huts – are best taking card payments through a payment facilitator. If you’re looking for an all-in-one point of sale and payment taking system, you may want to take a closer look at the accompanying software.

For example, SumUp point of sale software doesn’t offer any specific hospitality features, whereas Square offers its Square for Restaurants product, enabling restaurant managers to manage tables and orders.

Which credit card processing companies are best for ecommerce businesses?

Ecommerce businesses should look at super-secure payment gateway providers, including Stripe and WorldPay. While Stripe works on a pay-as-you-go basis, WorldPay charges a monthly fee dependent on your predicted turnover.

Both payment gateway providers offer hosted and integrated payment gateway options, meaning ecommerce businesses can choose the type of experience they want to offer their customers when they’re purchasing.

Find out more about hosted and integrated payment gateways.

Which credit card processing companies are best for sole traders?

The Barclaycard Anywhere merchant service has been designed with sole traders in mind. Its product offering is very basic, which is why the fees associated with it are incredibly cost-effective. Sole traders benefit from a compact card reader and a basic app that enables them to take card payments on the go.

Sole traders can even take advantage of the Barclaycard virtual terminal, which enables customers to pay invoices over the phone.

Aimee Bradshaw Senior Writer

Aimee is Startups' resident expert in business tech, products, and services. She loves a great story and enjoys chatting to the startups and small business community. Starting her own egg delivery business from the age of 12, she has a healthy respect for self-starters and local services.

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