Merchant Account Providers

Merchant account providers grant businesses the opportunity to accept debit and credit card transactions in payments of all kind. There are currently various merchant account providers within the market, offering different features to organisations according to their customers’ needs, such as:

Merchant Account providers offer a wide range of services in connection with offline and online trade, such as setting up a merchant account, supporting transactions, providing a payment gateway, payment processing, point of sale systems (POS), security of the account, troubleshooting, PCI-compliance, and more.

Nowadays, card transactions are on the rise. This makes the implementation of card payment machines and merchant accounts necessary. Banks usually outsource their merchant services to external partners specialised in payment processing, known as Independent Sales Organisations (ISO).

An ISO is a middle ground player within the card payment system that can handle merchant account providers for businesses. An ISO has a pre-established relationship with a bank and is responsible for monitoring the income of the merchant. An ISO is capable of:

There are currently many merchant account providers on the market for you to choose from. No matter if you are looking for a regular payment processor or an online merchant account to accept card payments from online customers, your options are vast.

Therefore, it is important to choose the most relevant merchant account provider for your business and your customers’ goals, as they may be able to offer other related services, such as offering the best mobile card machines for your company.

The role of card payment services has become increasingly important, due to the customer’s increasing expectation for card transaction payments for buying goods and services. As so, it is very important to choose a transparent provider that distributes its services at a reasonable price.

The following table showcases the top 6 major ones currently leading UK's card payment solutions services by providing payment processing services to a significant amount of clients.

To learn more about each company and get additional information, you can click on their respective logo.

There are mainly three types of merchant account cost policies that payment processing companies follow. These include:

The interchange-plus pricing structure, also known as cost-plus pricing, comprises three different elements: the interchange rate, the card-brand fee, and merchant account services markup.

Considering that there are two main card issuer companies on the market, MasterCard and Visa, they are capable of determining both the interchange rate and the card-brand fee. These two pricing components are inflexible, meaning that neither the merchant account provider nor the business owner can alter them.

Moreover, the merchant account service’s markup is a percentage that is added by the payment processing company in exchange for their provided features and services. Although the way that the merchant account service’s markup is calculated varies based on the merchant service provider, most of them include a fee for every completed transaction, in addition to the standard fees.

The transaction fee typically ranges between 1.75-2.75%, depending on various factors, such as:

Although the interchange-plus pricing is considered to be the most beneficial and transparent option, it is only recommended for well established businesses. In the beginning, it is advised that a merchant operates within a tiered pricing policy.

The tiered pricing structure, also called bucket pricing is the most widely used pricing model, amongst the three. The tiered pricing strategy combines interchange rates, card-brand, and markup fees into a single integrated cost with separate transactions fees for different tiers. The tiers are categorised in various sections with different layers for credit and debit card transactions, such as:

Despite the fact that most merchant account providers have three tiers, some card payment solutions provide up to six alternatives. As so it’s important to gain information about your customers’ needs beforehand, in order to select the most cost-effective tier for your business. If most of your customers use traditional debit credit cards and card machines, this model may be a good fit.

The flat rate pricing model is based on charging a single, fixed percentage per transaction completed. This pricing model is ideal for accepting card payments for mobile merchant service providers and small businesses that process less than £2,500 on a monthly basis.

There are multiple merchant account providers currently operating in the UK. This can make the process of choosing the best payment company for your business a time-consuming procedure. You should consider all features of merchant account provider and match it to your needs in order to find the perfect fit.

To facilitate you with this process, Market Inspector has reviewed top 6 major merchant account providers in the UK in the following criteria:

PaymentSense is a large merchant account provider on the UK market, currently offering its services to more than 30,000 businesses. The company offers a standard contract for a minimum duration of 18 months, while its pricing model depends on the type and size of the merchant account owner.

In the case of this merchant account provider, there is no cancellation fee for closing the account earlier than the conclusion of the contract. However, if the merchant account owner also leased a terminal, this incurs cancellation fees on that agreement.

Worldpay is a worldwide payment processor with active clients all over the globe. Being one of the first merchant account providers within the payment service and card payment processing industry; the company managed to build one of the biggest and strongest customer bases, while constantly developing and improving its services.

As such, Worldpay has managed to keep high satisfaction rate amongst its customers. Yet, only few existing complaints are in relation to the high early-termination fees for the service. Another drawback is the unavailability of contract length customisation..

One of Worldpay's highlights is to include services such as gift cards and loyalty programmes within its system, making it one of the most favourable merchant account providers.

Lloyds Bank Cardnet serves as the merchant services division for Lloyds Bank, the largest retail bank in the UK. The company can be a merchant account providers for businesses of all types and sizes with a client base of more than 55,000 merchants.

This merchant account provider has a free sign-on policy only for customers that already own a bank account at Lloyds Bank, however, for all others there will be a sign-on fee. This, in combination with the unavailability of contract length customisation, might become a decisive factor for SMEs. Another relevant aspect to mention is the expensive fees for high risk business accounts.

Security by 3D protection system, combined with Lloyds Bank's ClickSafe system, makes this provider a trustworthy merchant account provider.

Global Payments is one of the largest merchant account providers within the payment processing industry, operating in over 54 countries. The company’s reputation of ‘helping you find any and all the solutions you need’ is a perfect representation of its excellent customer service.

Global Payments handles everything internally, which makes it a great fit for businesses with complex needs. As this merchant account provider offers a flexible pricing model, you can get tailored offers, such as low rates based on your volume and your business needs.

The company offers a high level of 3D security for your account. However, as a drawback, cancelling your merchant account comes with an additional fee.

Card Cutters, a relatively new payment processing company, serves approximately 6,000 merchants through its services in the UK. Services include standard pricing, transparent contract terms, and free sign-on. The main pricing model that Card Cutters promotes is the interchange-plus pricing.

Although Card Cutters has a significantly lower client base compared to the other merchant account providers, they have an excellent customer satisfaction rate. Also, it does not have cancellation fees, but if you are renting a terminal, you will incur fees for terminating the rental early.

While the length of contract is not customisable, on the other hand, you will feel secure about your account as Card Cutters offers the latest security systems.

First Data handles every operation internally, and currently has more than seven million merchant clients worldwide. The wide variety of products support services like e-commerce, mobile processing providers, and POS software providers, ideal for businesses with complex needs.

Furthermore, it offers a wide range of resources and support for third party integration with Google Wallet, offering merchants the ability to legally and securely accept mobile payments.

First Data will charge you a sign-on fee, as well as a cancellation fee. However, the complexity and security provided by First Data is worth the initial investment.

First Data offers complex merchant services, whilst offering customisable pricing and contract length. Additionally, your account is secured by fractal and 3D fraud protection systems for higher level of protection.

Finding the most suitable merchant account provider depends on the type of your business your vision. If you are clear about these, the right provider will match all your needs, and in most cases offer you a compatible mobile POS system solution.