Merchant account providers. Try comparing prices and you’ll find that most don’t advertise their rates online. This is for the simple reason that if your only option is to call and talk with a sales person then you're more likely to become a customer.
Frustrating, yes. But don’t worry, we’re here to help.
This page helps you compare merchant accounts from the UK's top five providers. There’s also a load of useful information on what a merchant account, or card payment processor is, as well some no-nonsense advice to help you negotiate the best deal for your business. Scroll down or click on one of the icons below to jump to the relevant section.
Best merchant account providers UK
We compared over 25 UK merchant account providers to help narrow down your options. We assessed them on rates and fees, minimum contract length, and help and support. These are the five that came out on top.
Make a quick comparison using table below or scroll down for a more in-depth review of their services.
Compare merchant services
|Leading merchant account providers|
|Recommended as||Best all-round provider||Best for hardware||Best for small businesses||Best for price matching||Best for security|
|Debit cards (p/transaction)||1%||10p||0.65% + 1p||0.35%||0.75%|
|Credit cards (p/transaction)||2%||1.25%||1.3%||0.95%||0.96%|
|Authorisation fee (p/ transaction)||4p + VAT||2p + VAT||3p + VAT, 0p on |
|3.85p + VAT||3p + VAT|
|Wireless terminal rental (p/month)||£22.99 + VAT||£15.63 + VAT||£17 + VAT||£20 + VAT||£25.11 + VAT|
|PCI compliance||£29.99 + VAT p/yr||£4.99 + VAT p/mth||£35 + VAT p/yr||£4.95 +VAT p/mth||£5.50 +VAT p/mth|
|Minimum monthly service charge||£15||£5||£10||£24.95||£15|
|Early termination fee||No||No||No||No||£200|
|Payment gateway (p/month)||£20 + VAT||£15 + VAT||£19 + VAT||£24.95 +VAT||£20 + VAT|
|Minimum contract||18 months||36 months||12 months||18 months||48 months|
|Jump to our in-depth review||Worldpay review||First Data review||Payzone review||Paymentsense review||Lloyds Cardnet review|
|Compare quotes today||Request a quote||Request a quote||Request a quote||Request a quote||Request a quote|
Based on average annual UK SME turnover of £90k, with an average transaction of £5 - £10.
(Figures accurate as of January 2018.)
Merchant services UK: in-depth reviews
If the numbers alone aren’t enough for you, check out our in-depth reviews of the top five UK merchant service providers…
The numbers don’t lie. Worldpay is one of the world’s largest payment processors, boasting 31 million transactions on a typical day. That’s around 400 every second. Impressive.
Have you seen their Trustpilot rating? Let’s be honest, it’s not great — even for a credit card processor. But the sheer scale of Worldpay’s business operations means the number of complaints is actually low relative to the number of customers.
The company offers a full range of merchant card services and 24/7 support. Wireless, Bluetooth and countertop PDQ card terminals can be bought outright, or leased as part of your merchant account package.
Worldpay offers a choice of three payment plans:
Pay-as you-go — an excellent option for small UK businesses and seasonal businesses whose turnover varies from month to month. You pay a one-off charge of £150 to lease the card terminal, then only pay for transactions processed. There is no minimum monthly service charge — so if you take no card payments in January you will pay no fees in January.
Fixed monthly — well worth considering if you can accurately predict monthly turnover. The fixed rate is inclusive of both terminal rental and transaction fees. Transactions are capped at a predetermined number, if you go over the threshold you will incur extra charges.
Standard — an excellent choice for established businesses with a varying card transactions volume. This type of plan allows you to adjust monthly charges and transaction fees to suit your business needs.
A payment gateway, for accepting online merchant services, is charged at a monthly fee of £19.95. Their robust and easy-to-use virtual terminal, for accepting payment over the phone, is available as a “bolt-on” for £9.99 a month. Pay By Link, which arms your business with the ability to take payment via email, is another £9.95 per month.
In the past, customers have complained of being tied into a longer-than-average contract with an excessively high cancellation fee. Worldpay have responded by scrapping cancellation fees, and a standalone merchant account is now available on a 30-day rolling contract.
Worldpay at a glance:
✔ Choice of three rental price plans
✔ 24/7 support
✔ No setup cost or early cancellation fee
✗ 18 month minimum rental contract
✗ High rental fees
✗ No option to pay PCI compliance on a monthly basis
First Data is another global player in payment processing. Their £5 monthly service charge is the lowest offered by any supplier — a real draw for small businesses processing low volumes of card transactions.
The company uses an ultra secure method of encryption known as ‘tokenisation’, which stores the customer’s payment data on First Data servers, replacing it in the merchant’s system with a randomly generated number. This makes it incredibly difficult for cyber thieves to steal sensitive information and reduces your liability as a merchant.
In 2013 First Data bought start-up company Clover, and along with it the Clover Station electronic point of sale (EPOS) system. The sleek design and easily navigated software alone is a big draw for many businesses. I mean, just look at it. It’s a thing of beauty.
And what’s more, the standard rental Clover Flex card machine works using 3/4G as well as on Wi-Fi. So if your internet drops out you can continue to take card payments.
Rental contracts are a little on the lengthy side, with a minimum term of 36 months. There is no fee for cancelling the merchant account during this period but you would be required to pay the remaining cost for lease of the terminal. That works out at £450.14 if you cancel after 12 months. But why change a good thing?
First Data at a glance:
✔ Low monthly card terminal rental — £15.63 + VAT
✔ Low monthly service charge — £5
✔ Receive up to £150 cashback for switching provider to First Data
✗ 36 months minimum rental contract
✗ Reluctant to offer accounts to “high-risk” businesses
✗ 24/7 support not available
Payzone is a UK-based provider specialising in merchant accounts for small businesses. The company is what’s known as an Independent Sales Organisation (ISO). This means that they work with reputable merchant banks such as Barclaycard to process your transactions along with other users’ in one, jumbo merchant account.
By doing this they able to offer the same competitive rates to SMEs available to larger corporate merchants.
The downside to a shared merchant account is that it can take longer for you to get hold of your money. And if the bank suspects that even one transaction could be fraudulent they can choose to freeze the account entirely, which can cause cash flow problems.
Payzone has an excellent reputation for customer service. The company is rated “Great” on Trustpilot, with over 1,000 reviews, which speaks volumes for the quality of customer service.
Uniquely, they offer to send a sales rep to speak with you in person. And of all the providers we reviewed, Payzone was the only one to provide the authorisation, PCI compliance, and minimum monthly service charge upfront, unprompted.
Yes, their PCI compliance fee is a little higher than other providers’, but for this Payzone do everything. So, unless a 200 question survey is your idea of a good time, we recommend you pay the extra £5 and save yourself a headache.
Overall, the combination of excellent client support and low fees makes Payzone an excellent consideration for small businesses and start-ups. Their transparent pricing and jargon-free sales approach really sets them apart from other providers. And with just a 12 month fixed contract, you have the flexibility to change providers without incurring a hefty buy-out fee.
Payzone at a glance:
✔ 12 month contract is shortest in industry
✔ Four star rating on Trustpilot
✔ Transparent pricing
✗ Independent Sales Organisation model isn’t right for large businesses
✗ Auto-renewing contact
✗ 24/7 support not available
Paymentsense is another UK-based merchant service provider that specialises in payment solutions for small businesses. They operate on a smaller scale than the likes of Worldpay and First Data, and this seems to translate into excellent customer satisfaction scores for customer service — they’re rated “Great” on Trustpilot.
Like Payzone, Paymentsense is an ISO. They act as a middleman between you and the merchant bank and, by negotiating on your behalf, can usually offer very competitive rates for SMEs.
Paymentsense provides the same services offered by our other top providers: card machines, payment gateway, virtual terminal. So, again, the determining factor in whether you choose Paymentsense as your merchant account provider is fees.
What really sets the company apart is it's price match promise. Paymentsense will match or beat a quote from another supplier if you can provide evidence of it on email. If you’re already under contract with a provider, they’ll send you a three-step “Switcher Pack”, which includes a drafted cancellation letter and stamped envelope. They may even be able to help you with the cost of early contract termination if you’re set to be charged a penalty fee.
Some customers find the authorisation fee and minimum service charge - both higher than average - a turn off. But their willingness to price-match suggests that they’re open to negotiating, so it’s worth talking with them to see if these can’t be reduced when they quote for your business.
Paymentsense at a glance:
✔ Low transaction rates
✔ Four star rating on Trustpilot
✔ Promise to match or beat your current rates or another quote
✗ High minimum monthly service charge — £24.95
✗ Independent Sales Organisation model isn’t right for large businesses
✗ High authorisation fee — 3.85p + VAT
Lloyds Cardnet is a global credit card processor. Established in 1765, it’s fair to say they know what they’re doing when it comes to payment processing.
They offer a full complement of merchant services, including Ingenico chip-and-pin machines, virtual terminals for MOTO businesses, and a secure, easy-to-use payment gateway for ecommerce.
As a Cardnet customer you get a free online reporting tool with a number of features to help you run your business more effectively on a day-to-day basis. This includes a record of up to 13 months of card payments and a clear breakdown of fees per transaction.
Lloyds Cardnet offer an excellent package for existing customers. Businesses who bank with Lloyds will benefit from:
- A fixed rate of 1.25% on MasterCard, Visa Credit and Debit cards
- Minimum monthly charge of £15
- Terminal rental starting at just £15
- Terminal rental reduction after 18 months if contract renewed
- No joining fee
These perks make Cardnet one of the most price competitive merchant accounts providers for transaction fees.
On the downside though, Lloyds charge £50 set-up cost. They is also a fee of around £200 for the early termination of contract - more if you are also renting a card terminal.
But don’t let this put you off. Lloyds has an especially good reputation for customer service. So if you can swallow the up-front costs, you can be sure of getting a good service.
Lloyds Cardnet at a glance:
✔ Excellent rates for Lloyds Bank business account holders
✔ Top-notch customer service
✔ Online management tool
✗ Setup cost (£50) and fee for early termination of contract (£200)
✗ 48 month rental contract
✗ New to the small businesses sector for card merchant services with some teething problems
What is a merchant account and why do I need one?
Do you want to accept credit and debit card payments? Do you want to take payment online, over the phone or via email? Do you want to leave your business in the dark ages?
If you answered “yes” to the first two questions and “no” to the last, then you need a verified merchant account, or card payment processor as they are sometimes known.
Some people make the mistake of confusing a merchant account with a regular business bank account. They are two totally different things. A merchant account is a credit account held and managed by a merchant bank.
Why is it important to have one? Well, did you know that in 2016 card toppled cash to take the top spot as the UK’s most used payment method? In fact, by 2025 notes and coins are forecast to account for only one in four of all transactions.
So, it’s clear that the ability to accept card payments is an essential ingredient for the success of any modern business. And to do that you will need a merchant account.
How does a merchant account work?
To understand how a merchant account works, it helps to visualise where it fits into the transaction process. Let’s look at what happens when a customer pays using a credit card in a high-street store...
Step 1: The customer pays using a credit or debit card.
Step 2: A request for sales authorisation is automatically sent from the card machine to the acquirer (the bank), where it is routed to the relevant card association - either Visa, Mastercard or Discover.
Step 3: The card association forwards the transaction to the customer’s bank, known as the issuing bank, which checks to see if customer has enough money in their account to make payment.
Step 4: The issuing bank fires back a response to the acquiring bank, via the card association, which transmits this information to the card machine. And the transaction circle is complete.
With approved transactions, the issuing bank then bills the customer and the merchant submits a request for settlement of funds to the acquiring bank.
The actual transfer of funds can take anywhere between 24 hours and seven days depending on the perceived risk of your business. The service is subject to an ‘interchange fee’, paid to the card association, and a ‘discount fee’ set by the acquiring bank.
Interchange is a non-negotiable rate standard across all merchant accounts. The discount fee, on the other hand, varies from provider to provider. (See below for a full explanation of rates and fees and how to negotiate the best deal for your business.)
So you can think of a merchant account as a kind of holding-pen. It’s a secure place for your money to sit while the bank checks that the customer has sufficient funds to make payment.
Types of merchant account
There are three types of merchant account to cater for face-to-face, online, and mail order/telephone order businesses.
Card holder present (CP)
A basic card-holder-present account allows you to take card payment from the customer face-to-face, usually in-store. Needless to say, you’ll need a card machine. These can be leased from the merchant account provider for a monthly fee or bought outright. Choose from countertop, wireless Bluetooth, and mobile SIM card machines.
The risk of fraud is lowest for transactions where the card is present, and this is reflected in the discount rates (fees) charged by acquirers for a CP account.
Mail order/telephone order (MOTO)
A MOTO account is one of two types of merchant account that cater for ‘card-not-present’ (CNP) payment methods. It allows you to take phone payments and payment via post through a virtual terminal, accessed via the internet.
The customer’s information is input manually to the system and stored securely in accordance with PCI regulations. This information is then used to set up recurring payments, such as subscriptions and monthly membership fees.
Since there is no need for a physical card machine, a MOTO account typically has a small set-up fee, and no monthly fees. However, the discount rate is likely to be higher than for a standard CP account as the risk of fraud is higher.
Find out more: MOTO merchant accounts guide
Online merchant account/internet merchant account (IMA)
An online merchant account is a vital part of any ecommerce operation. Any business wishing to accent online payments must have an IMA - even if they take face-to-face payments too.
An online merchant account works by replacing the physical card terminal with a software version, or 'payment gateway'. This secures customers’ payment details while the acquiring bank checks to see if they have funds available for the transaction.
Online credit card processing represents the highest fraud risk to a credit card merchant, so the transaction fees for this type of account are highest.
How to compare quotes: making sense of rates and fees
All providers offer “competitive rates”, and more than one claims to be the world’s “leading merchant accounts provider”, (how does that work?). So to ensure you get the best deal for your business it is essential that you compare quotes from multiple providers.
No two businesses are the same, and consequently card payment service fees vary a lot. Generally speaking, the more card payments your business processes, the lower your rates will be. It’s important to remember, these rates are negotiable. So don’t be afraid to play one provider off against another to get the best possible deal.
To ensure an accurate quote, make sure that you are able to provide these three key pieces of information:
- Nature of the business — face-to-face, online business, mail order/telephone order
- Monthly turnover for card payments
- Average transaction size
Based on this information you will then receive a basic quote. This will include a fee per transaction for credit and debit cards, as well as any monthly charges for card terminal rental or a payment gateway. But beware hidden fees…
There are a number of hidden fees that merchant service providers will probably withhold in their initial quote to you in order to make their prices appear lower. When negotiating a deal, make sure you ask about:
- Authorisation fee
- Minimum monthly service charge
- PCI compliance
- Setup fee
- Early termination fee
The authorisation fee is an additional charge per transaction which goes towards the cost of processing the payment and protecting against fraud. When a provider gives you their initial quote they will probably won’t mention the authorisation fee — so show them that you know what you’re talking about and make a point of asking about it.
Minimum monthly service charge
This is the minimum amount in fees you will be required to pay on a monthly basis. So, if your minimum monthly service charge is £10 but you only rack up £7 in fees, you will still be billed £10 by your provider. As a rough guide, £2000 in card transactions is equivalent to about £10 in service fees.
Like the authorisation fee, card payment providers seem to forget about the minimum service charge when providing a quote — so make sure you ask the question.
PCI compliance is a legal requirement for all UK-based businesses that process card transactions. It is a series of checks to ensure sensitive data is handled and stored in accordance with regulations set out by Payment Card Industry Data Security Standard, to protect against fraud.
For most businesses these checks take the form of a questionnaire, though additional computer checks will be necessary if you store customer data on your business servers. Prices start at around £5 per month, or £30 as an annual fee.
Find out more: A complete guide to PCI compliance
Set-up fees are rare but some providers do still charge them. Lloyds Cardnet, for instance, charges £50 to activate your merchant account.
Early termination fees
Some providers will charge a hefty cancellation fee for the early termination of contract. So, it’s important establish where you stand on this point before signing or risk a nasty surprise further down the line.
Beware of providers that claim to have no cancellation fee but require you to pay out the remainder of your card machine rental contract. This can prove extremely expensive, especially if you’re tied into a long contract.
Due to the competitive nature of the UK merchant services market, most providers will waive a cancellation fee if they think doing so will win them your business. So don’t hold back.The best way to negotiate a good deal for your business is to play one provider off against another.
Chargeback is a measure designed to protect the consumer. If a consumer suspects that a transaction on their account is fraudulent, they are entitled to challenge it with the bank. If the challenge is upheld, the money will be refunded and the merchant will incur a chargeback fee. It’s basically a charge for wasting the bank’s time.
Expect to pay £15 for every successful chargeback claim against your business.
Interchange is a fee paid by the acquirer (the merchant’s bank) to the issuer (the customer’s bank) for processing a transaction. It is usually bundled in as part of the cost charged by providers and is non-negotiable as part of a merchant account contract.
Interchange used to pose a real problem to businesses trying to compare credit card merchant services; it was difficult to separate a varying interchange rate with the discount rate (commision) charged by providers. This changed when in 2015 interchange rates were capped in the UK at 0.2% of the transaction for debit cards and 0.3% for credit card transactions.
As a consequence, it is now much easier to compare quotes as you know that all providers are operating on a level playing field.
Learn more: An in-depth look at merchant account fees
Independent Sales Organisation (ISO) vs a traditional merchant account provider
An Independent Sales Organisation (ISO) recruits merchants on behalf of the acquiring bank. They are basically re-sellers — like a travel agent who sets you up with a hotel and takes a tidy cut of the room fee as payment.
They do not have the capacity to process transactions, and play no part in payment authorisation or the settlement of funds. So what do they do?
An ISO negotiates with the merchant bank on your behalf. By grouping transactions from multiple merchants together, and channeling them to the merchant bank to be processed in one big, shared merchant account, they are able to offer SMEs the same low rates available to large corporations.
The merchant bank gets a high transaction volume, the ISO gets its cut, and SME merchants get extremely competitive rates. Everyone’s a winner.
So what are the downsides? ISOs only work with businesses processing a low number of transactions, and a shared merchant account can be unpredictable. If the bank flags a transaction as fraudulent then it can choose to freeze the account entirely, stopping the transfer of funds for all businesses connected to it. This could delay settlement and, in the worst cases, cause problems with cash flow.
You won’t find any Fortune 500 companies using a independent sales organisation, but they’re an excellent choice for SMEs.
High risk merchant accounts
Certain business sectors are categorised as high-risk by card payment providers. Not all providers will cater for high-risk businesses and those that do will charge higher fees.
Risk assessment is based on a number of different factors. Unsurprisingly, financial track record is a major criteria; companies or business owners with a poor credit history will find it difficult to open a merchant account.
Other factors include trading history - startups will be charged higher fees than longstanding businesses - and the likelihood of chargebacks (where a customer contests a payment as fraud) and cancellations.
Some examples of businesses sectors classified as “high-risk” are:
Travel and tourism — frequent cancellations. We’ve all been there. Someone breaks an arm, or so and so invites you to a wedding and you’re forced to cancel your holiday at short notice.
Subscription products - magazines, Netflix etc. — media is an unstable industry and membership to streaming services is prone to fluctuating from month-to-month.
Online gambling — despite safeguards, there is a high risk of fraud in this industry.
Tobacco and e-cigarettes — minimum age requirement and the associated health risks can impact cash flow.
How to apply for a merchant account
Whether you’re looking to open your first merchant account or switch providers, Expert Market is here help you get the best deal for your business. The first step is to simply fill out this form to receive free quotes.
The questions are designed to match you with the most suitable providers for your business, so please take care to provide accurate information.
There are no hidden fees and the whole process only takes a couple of minutes, after which one of our UK merchant services experts will be in touch to discuss your options.