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Sole Trader Merchant Accounts

This article will explain how to get a sole trader merchant account, and offer some providers who you can review further to ensure you get the best deal for your business.

Setting Up a Sole Trader Merchant Account

Most banks and merchant account companies accept sole traders for their merchant accounts.

However, as with all businesses there is a process to go through to apply for a merchant account. The application will require information about your business before a merchant account is agreed to.

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The type of information requested typically includes:

  • The accounts of the business
  • The anticipated volume and value of card transactions
  • The predicted turnover of the business
  • Details of your supplier
  • Information on the goods you sell
  • How frequently transactions occur
  • How the business delivers goods

If you are a new business without any historical data such as accounts, the account supplier may well ask for details of predicted cashflow and a copy of your business plan.

Merchant Accounts Available in the UK

In the UK, all the main banks such as Barclays, HSBC, NatWest and Lloyds offer merchant accounts to sole traders. If you already have a relationship with a bank through your business account, then you may choose this as your first port of call to discuss merchant account facilities.

Other companies offering merchant account facilities to sole traders include 2checkout and Clickbank.

As well as the merchant account service, the supplier will provide you with the hardware you need for taking card payments such as a PDQ machine to take the card payments.

You will also require a payment service provider that connects your business website to the merchant account. This may be offered by the bank, but again you can choose your own payment service provider.

Costs of a Merchant Account for Sole Traders

One of the most important considerations for a sole trader choosing a merchant account is the cost of setting up and using such a facility.

Typically, to set up the account costs anywhere between £70 - £250. Then there are transaction charges, and these are dependent on the volume and value of your transactions.

For credit cards, the charge is usually between 1% and 3.5% of the transaction amount.

For customers who pay using a debit card banks typically charge a set fee of between 20p and 50p per transaction. There may be an additional annual fee for your merchant account service.

Next Steps

If you are interested in hearing more about a sole trader merchant account for your business, then fill out the form at the top of this page and a select group of excellent suppliers will get in touch with you.