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Best payment processors for UK small businesses – 11 of the best

Best payment processors for UK small businesses - 11 of the best

Now that your business is ready to take payments, it’s time to think about how you’ll be processing payments. Alternatively, you might just want to change your current payment system. It’s time to think about what are the best payment processors for you and your business.

You’ll find that payment processors perform largely the same tasks, but it could be a single feature – or the cost – that’ll steer your final decision.

Knowing what’s on the market will help get you going, which is why we’ve compiled a list of the most widely recognised systems. But first: a quick definition.

>See also: Why getting up to speed on card payments is essential for SMEs

What is a payment processor?

A payment processor is a third-party payments system, sending between your customer’s bank account and your business bank account. Payment processors can also authorise transactions and work on merchants being paid within a certain time period.

The term is often used interchangeably with payment gateway, a means of approving a payment. Many firms combine payment processors and payment gateways in one product, so you’ll more commonly see it referred to as a payment gateway.

>See also: Setting up card payments for retail and online selling

What payment processor should I go for?

Let’s compare some of the best payment processors on the market, focusing on cost, pros, cons and what kind of payments the system is best suited to.

WorldPay

What is it? WorldPay has specialist small business packages which you can fit to your requirements. You can choose your equipment and pricing plan. You’ve got countertop card machines, portable card machines, mobile card machines and mobile card readers.

Payment gateway (Paypal, debit and credit card payment), email link, virtual terminal (over the phone using a secure web browser).

How much does it cost? WorldPay has three packages: Simplicity, Fixed Monthly or Custom.

Simplicity

Gateway fee: 10p for every transaction
Monthly online payments gateway fee: £19.95
Risk manager: 10p per transaction

Transaction fee (debit and credit card): 2.75pc + 20p

Fixed Monthly

Monthly package fee: from £49.99 (includes transactions up to set threshold and authorisation fees) Risk manager: 10p per transaction.

Credit cards: 2.75pc
Debit cards: 0.75pc

Custom

Custom is a bespoke package which you can get a quote for based on your needs

Pros: WorldPay works with card providers around the world (130 different countries in 116 currencies) with 24-hour UK customer support

Cons: Factoring in the monthly and per-transaction fees, it’s a payment processing system that can get quite expensive. Some reviewers say there can be a delay in getting money to small business owners as well as a lack of product transparency and forceful sales tactics. The auto-renewal opt out process is difficult. You need to write to WorldPay within 30 days of your contract expiring to tell them you don’t want it renewed, otherwise you’ll be signed up to an extension and forced to pay early termination if you want it to end.

Best for: Newer or smaller businesses with lower transaction volumes or medium-sized businesses with consistent transaction levels all year round.

Square

What is it? With Square, you set up an account and buy a reader online or in-store. You’ve got the option to take payments in person, over the phone, by invoice or online. The basic version comes with free real-time analytics as well as inventory and location management.

How much does it cost?

Chip and PIN payments: 1.75pc
Card-not-present transactions including keyed-in transactions, card payments over the phone with Virtual Terminal, Square Invoices and eCommerce: 2.5pc

Pros: Square is an easy to use payment gateway with quick launch and a free magstripe reader which accepts international cards. Invoicing and virtual terminal are also included. Integrate Xero and Excel for accounting and elect to get your money the next business day.

Cons: Square doesn’t take smartphone payment and the cost per transaction from major card providers is pricey. That’s before you consider the no limit on per-transaction fees could see fees rocket if you have a busy period or you experience fast business growth.

Best for: Small businesses with less consistent sales who want to start up quickly.

Stripe

What is it? Stripe is a payment solution for online payments which is customisable with applications and third-party integrations.

How much does it cost? Depending on the size and sales volume of your business, you’ve got two options.

Integrated

European cards: 1.4pc + 20p
Non-European cards: 2.9pc + 20p

Currency conversion: 1pc

Customised

Design a custom package for your business if you have large payments volume or unique business needs, Base it on volume discounts, interchange pricing, multi-product discounts and country-specific rates   

Pros: It offers simplicity, with customised billing plans for membership and subscriptions, two-day rolling bank transfers which can be made weekly or monthly depending on when you want to get paid. Stripe also offers integration with the mobile app, uses 135 different currencies and customers don’t need an account in order to pay so the process is seamless. There are no setup fees, monthly fees or hidden fees to worry about either.

Cons: The chargeback policy may lead to some aggravation. You’ll be charged £15 for any disputed transactions and only refunded if a dispute is resolved in your favour. As you might expect, it’s complicated for non-technologically minded people. Stripe holds onto merchant money for longer to protect them from fraud but it’s still longer than its competitors.

Best for: Online businesses with access to a developer.

iZettle

What is it? iZettle offers up a point of sale, card reader, invoicing and an eCommerce platform. Manage your inventory, send abandoned cart emails and get a better grasp of your performance with real-time sales analytics. It has the ability to generate sales reports, do inventory management and track staff performance.

How much does it cost?
Go (no monthly fee): 2.5pc for invoices
Card transaction fee: 1.75pc with no lock-in contract for the

Go PLUS: £29 a month
iZettle eCommerce: 2.5pc for each sale
iZettle for Hospitality: £39 a month per iPad

Pros: This payment processing platform has no contract and the ability to integrate with Xero and Excel. It’s also compatible with iOS and Android, accepting Samsung, Google and Apple Pay. It also has a visually pleasing design.

Cons: The only phone support is available 9am-5pm Monday to Friday.

Best for: Food and drink, retail, health and beauty and service-based businesses that run on multiple platforms.

PayPal Here

What is it? From PayPal, Here allows payments to go offline with card and contactless payments, including Apple Pay and Android Pay. Manage your inventory and generate reports. Everything is managed within an app with a variety of online support articles.

How much does it cost?

Card reader: (£45 + £9 VAT)
Transaction fee: 1pc – 2.75pc per transaction.

Pros: It’s easy to set up, accounts are authorised almost instantly, it’s simple and secure, quick for customers and support is provided by phone or email.

Cons: PayPal’s big name makes it a target for fraudsters, despite its high level of anti-fraud measures. This also means that your account could be locked at short notice for security reasons.  What’s more, disputes tend to be resolved in favour of buyers, but potential customers could be disadvantaged by not having a PayPal account.

Best for: A business that doesn’t want a bulky physical payment unit and whose customers use PayPal.

Amazon Pay

What is it? I’m sure this payment system needs little explanation. Customers on Amazon Pay can make purchases using their Amazon account and do their shopping by voice with Amazon Pay for Alexa Skills.

How much does it cost? Your payment processing fee will depend on your monthly payment volume while the authorisation fee remains consistently at 20p per transaction.

Less than £1,500: 3.4pc

£1,500.01-£6,000: 2.9pc

£6,000.01- £15,000: 2.4pc

£15,000.01 – £55,000: 1.9pc

Above £55,000: 1.4pc

Cross border fees (for sales outside the UK): up to 1.5pc

Chargeback dispute fee: £14.

Pros: Amazon Pay gets a huge boost from its name recognition – lots of people have an Amazon account. Shopping is quick and easy if the user is already logged in, but you can embed a “buy now” button on your site to make purchasing even easier. It’s also high security, offers merchant protection and integrates with Shopify and BigCommerce

Cons: Like PayPal Here, Amazon Pay can be quite a target for fraudsters. You may find your account being shut down without prior warning for security reasons, there’s no PayPal support and the transaction fee is pretty high.

Best for: Online retail businesses.

Shopify Payments

What is it? Shopify Payments allows you to accept credit cards directly with Shopify in contactless, Chip and PIN or by swiping the customer’s card.

Offers online payments solutions and eCommerce as well as a point of sale system.

How much does it cost?

The standard prices are listed below but using Shopify Payments removes the commission Shopify takes on top of payment gateway fees. That’s 2pc (Basic), 1pc (standard) and 0.5pc (Advanced)

Basic Shopify

Monthly cost: $26 (~£21)
Online credit card transaction fees: 2.9pc +30c (24p)
In-person credit card fees: 2.7pc

Shopify

Monthly cost: $71 (~£56.50)
Online credit card transaction fees: 2.6pc + 30c (24p)
In-person credit card fees: 2.5pc

Advanced Shopify 

Monthly cost: $266 (~£212)
Online credit card transaction fees: 2.4pc + 30c (24p)
In-person credit card fees: 2.4pc

Pros: You can set up Shopify Payments instantly and try it out free for 14 days. Your customers can still pay through another payment system if they prefer. However, using Shopify Payments removes extra transaction fees.

Cons: Shopify also has steep chargeback fees of £10 per chargeback and like Stripe, if the decision doesn’t go your way, you lose the fee. Your merchant account can be frozen to investigate chargeback errors or suspicious account activity.

Best for: Online retail businesses. 

SumUp

What is it? SumUp offers two card readers and a point of sale (POS) system that can be used remotely or on the go.

How much does it cost?

Transaction fee: 1.69pc
Cost for the reader: Air £29, 3G card reader £69, POS system £139

Pros: SumUp’s offering has a fixed transaction rate which is lower than its competitors. It also has paperless onboarding and no contractual obligations. The Air can make up to 500 transactions on a single charge while the 3G has unlimited mobile data.

Cons: There’s no phone support on Sundays or late evenings, nor is there an in-built receipt printer.

Best for: Remote businesses, such as freelance beauticians or food vans.

Adyen

What is it? Adyen has the ability to take online payments and in-person with a POS system. If your customer is paying online, they can do so through the web, in-app, pay by link or subscription. It also has AI-powered fraud protection

How much does it cost?

You’ll be charged a processing fee plus payment method for every transaction.

Interchange is made up of:
Acquirer mark-up (0.60pc)
Interchange fee (customer bank fee)
Card scheme fee

Processing fee: €0.10

Pros: Adyen has no monthly fee, no set-up or application fees and no early termination fees.

Cons: With those fees, it’s expensive for businesses with lower volumes of sales. Plus, it’s no good for high-risk merchants (ones that get a significant number of chargebacks) as you’re more likely to get blocked. The system is not really designed for brand-new start-ups – you must already be taking payments if you want to use Adyen.

Best for: Better for larger SMEs, not start-ups.

Authorize.net

What is it? Owned by Visa, Authroize.net is one of the veterans when it comes to payment processing. It offers eCommerce phone payments and comes with a virtual terminal and batch upload features, allowing you to process transactions in a single file.

How much does it cost?

Merchant account and payment gateway

2.49pc + 15p per transaction (exc VAT)
£19 per month (exc VAT)
Set-up fee £35

Gateway only

£19 a month (exc VAT)
10p per transaction (exc VAT)
set-up fee £35

Pros: It’s easy to set up and you can embed a Buy Now button for a smoother customer experience. As for you as a merchant, Authorize.net has advanced fraud detection, free invoicing capabilities and the option to integrate with QuickBooks.

Cons: Reviewers say they’ve been overcharged and that there have been delays in processing payments.

Best for: More established small business rather than a start-up.

Sage Pay

What is it? From one of the world’s largest accounting firms, Sage Pay offers solutions for online payments, card terminals, phone and point of sale.

How much does it cost?

Sage Pay has three pricing plans

Flex – £20.90 per month

350 transactions
Free fraud screening tools
24/7 telephone and email support eInvoice and phone payments included

Plus – £45 per month

500 token purchases per month
American Express SafeKey fraud prevention
Access to Fast-Pass support
Accept a range of local European Payment types

Corporate – bespoke pricing

3,000+ transactions per month
Bespoke fraud screening tools
Priority support services
Dedicated account manager

Pros: Sage Pay integrates with Sage Business Cloud Accounting, Sage 50cloud Accounts or Sage 200cloud Accounts software. With its fixed payment plans it’s easier to scale and it’s one of the UK’s most trusted payment systems with 24-hour customer support.

Cons: Sage Pay doesn’t have a mobile app. You’ve also got a three-month cancellation notice period to contend with on some accounts

Best for: Small businesses who are already Sage customers and planning to scale.

Further reading on payments

Five tips to get started taking card payments



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