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Merchant Accounts

The easiest way to get signed up with a merchant account is by using our bulk-buying-power – over £500 million in transactions each year by business we've advised on merchant accounts.

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Merchant Accounts

There are a few things you need to consider when looking for a merchant account:

  1. The type of products or services you offer
  2. Your average transaction size
  3. Whether you plan to accept card payments in person, over the phone or online.

Once you have an idea about the type of merchant account you need, it’s time to hook one up to your merchant bank account and start taking payments.

If you’re considering taking customer payments or looking for a better deal on card transactions and online payments a merchant account is where it usually begins. Taking online payments securely and safely is crucial for many businesses.

How Merchant Accounts Work

Merchant account payments and transactions are processed when a customer presents her card at point-of-sale. Whether this is via card reader in-store, through an ecommerce platform or over-the-phone.

  1. Customer card details are entered or read by a card reader and encrypted together with the details of the transaction and relevant card scheme (e.g. Visa or Mastercard) and are sent over secure connection to the acquiring bank.
  2. The relevant card scheme attempts to authorize the transaction with wth issuing bank (the customer’s bank), checking the customer details are correct and that sufficient funds exist in the account.
  3. The response from the issuing bank and card scheme are used by the acquiring bank to send a response back to the card reader or POS system to say the payment has been authorised and the transaction is completed to the merchant account.

 

Merchant Account Types

To perhaps oversimplify things a little, UK card processing services today can be arranged into two categories, pay-as-you-go services and merchant accounts:

Casual and Pay-As-You-Go Accounts

Usually without a long-term contract, some merchant account providers will offer to process customer payments for a flat rate, often with no monthly fees. These can be ideal for small businesses or people starting off. However the transactions fees are high, which doesn’t suit businesses with card turnover above £1-2k per month. These providers can be further categorised by the type of payment processing options they offer. For example most will provide the ability to take payments from customers, but not necessarily payments face-to-face or payments over-the-phone.

Merchant Accounts

Requiring a contract and variable fees often based on the volume of transactions, payment transaction types and which business sector you’re in, these merchant service providers are the old school. However, for a company with all but the most modest monthly transactions a merchant account is by far the cheapest option in the long-run. Although many merchant account providers are currently advertising “no setup fees”, they still have termination fees, monthly fees and further charges. Taking this into account for a company with over a given number or value of payment transactions per-month, the savings on cost-per-transaction outweigh the other fees.

High Risk Merchant Accounts

Another category of merchant account are those able to process so-called high risk. These are merchant service providers who have agreed with acquirers that they will accept the risk of being liable for any losses made by high risk merchants. High risk merchants can typically include “adult” or adult material websites, gambling sites, pharma sites and tech support among many others.

Going through a high risk merchant account provider can be expensive, with higher transaction fees and sometimes annual fees on top of this. However, the peace of mind that comes with knowing your business is being taken care of by a specialist, and the knowledge that you’re not going to lose your merchant account halfway through a busy month is reassuring.

There are many more categories of merchant account providers, but generally it’s best to steer clear of any provider that promises 100% free or flat rate merchant accounts as they will likely be casual accounts with high rates per-transaction.

Business Bank Account

Most companies take a business bank account and merchant account as standard, particularly if you’re going to be accepting card payments or processing a credit card transaction. If you choose a provider who offers a merchant account and a business banking solution, it should all be arranged for you, saving valuable time that could be spent running your business.

PayPal Business Account

In many ways PayPal is the simplest way for small businesses to take payment from customers online quickly and easily. It has been around for years and is pretty much as reliable as anything out there nowadays. And unlike other quick and easy methods of taking payments, such as Sage Pay – which requires integration – PayPal doesn’t require any extra setup before adding buttons or links to your website to start taking direct debit or credit card payments.

There are a number of different merchant account providers to choose from, so it’s important to do your research before signing up. The best way to start is by reading reviews of the various merchant accounts and then narrowing down your search according to the type of business you have and the services you need.

Merchant Account Provider

A dedicated merchant account will enable you to accept card payments from your customers in person, online and by telephone. The service will provide you with the necessary payment processing terminal or software to enable you to take card payments and will also include a merchant account number which is used to identify your business bank account when taking payments.

A merchant account provider allows you to accept all major credit and debit cards including Visa, Mastercard,Maestro and Visa Electron.

Card Not Present, or CNP transactions are card payments that take place over the phone or online where the payment details are provided by a customer rather than swiped on a POS machine, for example by typing in credit or debit card numbers on an order form, this still requires a merchant account.

In some cases you may be asked to pay a setup fee when you set up your merchant account. This is a one-off charge and is normally payable when the account is opened. You may also be charged a monthly fee, although some providers are now offering this free of charge.

A merchant bank account provider will also charge you for each transaction that you process, known as a transaction fee.

Merchant accounts for customer payments Face-to-Face

Face-to-Face Payments

Face-to-Face payments are taken over-the-counter, at table or anywhere the customer, the payment card and merchant are present in the same location. Face-to-face payments are usually processed using card reader technology such as a PDQ, card reader attached to a till or payment terminal or via a mobile phone app and card reader.
Merchant accounts for online payments

Online Payments

Online, internet merchant account, or e-commerce transactions are made through a secure online store or online payment processing app where the customer and their card are not in the same location as the merchant at point-of-sale, a CNP or Card Not Present transaction. Email payments are offered by some providers but this is generally by providing a link to an online payment processing app that a customer can visit to enter their card details securely.

Merchant accounts for phone payments

Payments by Phone

Payments by phone when the customer, their payment card and the merchant are not at the same location at point-of-sale, a card not present transaction usually facilitated by the customer telephoning the merchant while the merchant performs the card transaction using a virtual terminal or software program to send the payment details securely to the card processor.

Payment Gateways

For businesses wanting a comprehensive ecommerce solution, including a payment gateway that integrates into most shopping carts. A typical payment gateway package can vary from provider to provider or more depending on the number of processed transactions per month. Call us for more details on the best payment gateway for your business.

Virtual Terminals

Virtual terminals are ideal for businesses who want to take credit or debit card payments over the phone, where the cardholder is not present. Virtual terminal systems can be operated via any web enabled device and funds will be transferred to your account within three working days. Contact us for more information on the right cost package for your business.

Payment by Email

If you are looking for a secure way of receiving payment before dispatching the goods, why not email your potential client a “pay by click” link. Simply email a link to the customer and they will be taken to a payment portal where they will be able to securely input their credit or debit card details. Once they click “Pay” your business will be notified of the payment transaction. Once authorised, you can be confident of a secure transaction and release the goods or services to the customer.

“I cannot speak highly enough of IMS”

I cannot speak highly enough of the entire process especially the service and advice from Darren. Competitive pricing whilst tailor suiting to your needs Process for me was a little daunting and I had no idea how to proceed The communication by the team were excellent Thank you so much

Zoey - 14th Jan 2021

“Excellent service and knowledgeable”

Excellent service and knowledgeable I had a quotes from other card merchants much higher rates I got my account setup and card terminal within a week Definitely highly recommend Independent merchant service

Kai Mi Rice - 9th Jul 2020

“Great honest service “

Great honest service I would reccomend to everyone who s searching for a small company whom cares to put you first Thank you for being honest and help me in finding the best option for my business

Genaro Basilica - 26th Jun 2020

Merchant Account Comparison

We’ve compared over 57 merchant account and merchant service providers for businesses in the United Kingdom and beyond. We compare fees, customer service reviews, card processing services provided, settlement times and all the subtleties only experts are aware of to find of the best of the bunch.

Find the best ecommerce merchant account to process payments online, mobile card readers for lower volume and cost transactions, a full POS setup linking all your sites or the best all-round merchant service provider for you.

Comparison by Monthly Card Turnover

Merchant account comparison by monthly card turnover is a quick way to narrow down your choice of merchant accounts. Using your estimated monthly card turnover we get an idea of which merchant account price tiers apply to you.

A merchant account provider will usually offer a tiered fee structure for card processing, a ‘buy in bulk’ discount if you will. However, you should be aware that in most cases card processing fees are broken down into charges for individual card types – which you’ll see on your monthly statement if you already accept cards. Experts make a fine-grained comparison of each of these card transaction fees and the volume of payments processed by each card type. That way you can find the best merchant account for your business, not just in terms of cost but also in terms of features offered by each provider. There are a range of ways that businesses can accept card payments, each with its own advantages and disadvantages. In this article, we will take a look at some of the most common methods: payment by phone, payment gateway, virtual terminal, payment by email and merchant account comparison.

Payment by Phone

When the customer wants to pay, their credit or debit card details are taken over the telephone, this is known as payment by phone. The merchant will use a virtual terminal or software program to send the payment details securely to the card processor. Typically, payment by phone will incur a higher fee than other methods of taking payments as there is more risk for the merchant involved.

Virtual Terminal

A virtual terminal is a software program that allows the merchant to take credit or debit card payments over the phone, where the cardholder is not present. The virtual terminal can be operated via any web enabled device and funds will be transferred to your account within three working days. Contact us for more information on the right cost package for your business.

Comparison by Number of Card Payment Transactions

The number of card payment transactions processed per month is a useful quick comparison to narrow down which merchant account might be best for your business. We look at

Merchant Provider Features

Provider Features
globalpayments
  •  Point of Sale
  •  Online Payments
  •  Mobile Wallets
  •  Mobile Pay
  •  Unified Commerce
  •  Paylink
  •  Merchant Portal
  •  IoT Payments
PayPal
  •  Accept Payments
  •  Make Payments
  •  Manage Risk
  •  Accelerate Growth
  •  Streamline Operations
shopify
  •  Online Store
  •  Point of Sale
  •  Buy Button
  •  Sales Channels
  •  70+ Themes
  •  Drag and Drop Store Builder
  •  Custom Domains
worldpay from FIS
  •  Card Machines
  •  Online Payments
  •  Phone Payments
  •  Email Payments
  •  No Joining Fee
  •  24/7 UK Support
  •  Flexible Pricing Plans

Card Processing Fees Estimator

Use the estimator below to find out roughly what the cost of processing your card fees would be based on five leading companies historic pricing - or contact us to get a bespoke quote and save money.

How much you take in card payments each month?

£

How many card machines would you need across your business?

Here's a comparison of typical prices from 5 of the UK's leading merchant service account providers. This is based on an industry-standard calculation used to provide a rough-estimate of the number of payments of each type a typical company might take each month.

Company 1

Up Front: £38

Monthly: £60

Company 2

Up Front: £19

Monthly: £68

Company 3

Up Front: £39

Monthly: £70

Company 4

Up Front: £29

Monthly: £70

Company 5

Up Front: £60

Monthly: £104

We Can Probably Get You a Better Deal!

Using an accurate calculation based on the types of payments you actually take, we can game-the-system to get a bespoke deal tailored for your business without paying extra for payments you don't usually take.