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

By Anna Jordan on Small Business UK - Advice and Ideas for UK Small Businesses and SMEs 11 of the best payment processors for UK small businesses reviewed to help you choose the best payment system for your SME The post Best payment processors for UK small businesses -11 of the best appeared first on Small Business UK.

Sep 13, 2024 - 21:00

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

By Anna Jordan on Small Business UK - Advice and Ideas for UK Small Businesses and SMEs

Young blonde woman holding credit card over isolated background serious face thinking about question, best payment processors concept

UPDATED: 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. But how do you know which are the best payment processors for UK small businesses right now?

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

Why getting up to speed on card payments is essential for SMEs – In this piece, in association with Boost Capital, we look at why card payment technology is crucial for small businesses to stay ahead of the curve

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.

Setting up card payments for retail and online selling – Find out how to set up and get the most out of a POS system for your retail or hospitality business

What payment processor should I go for?

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

Or, if you feel like you’re ready to decide, why not get quotes today? All you need to do is provide us with some basic info about your business in the form at the top of the page and we’ll match you with the best providers for your needs.

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, mobile and contactless payments in person: 1.75 per cent
Manually entered transactions: 2.5 per cent
Online payments with UK cards: 1.4 per cent + 25p
Online payments with non-UK cards: 2.5 per cent + 25p

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

Cons: Reviews on Trustpilot reveal that customer service is poor

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

Get started with Square

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 your pick of countertop card machines, portable card machines, mobile card machines and Epos terminals.

It can also take a variety of global payments. You can accept Visa, Mastercard, Maestro, Diners’ Club International, Discover, China Union Pay, JCB and American Express (with a separate agreement).

How much does it cost? WorldPay offers the Simplicity Payment Gateway which can be bought as a standard package or a bespoke item:

Countertop Card Machine
Desk/5000

It has:

Large 3.5-inch touchscreen
Includes EMV Chip and PIN, chip and sign, magstripe and NFC/Contactless
Includes ethernet and dial
Dedicated customer-facing NFC and reader zone

Pricing

Simplicity Pricing Tariff (18-month terminal hire agreement) Better for businesses with lower transaction rates.

Transaction fee (Mastercard and Visa): 1.50 per cent

Monthly terminal hire fee: £10 per month

Next day terminal replacement
No authorisation fee
No premium transaction charges

Custom Pricing Tariff (18-month terminal hire agreement). For businesses that take over £75,000 in annual card turnover.

Transaction fee (on debit Mastercard and Visa card transactions): 0.75 per cent + 4.5p

Monthly terminal hire fee: £17.50 per month

Minimum monthly service charge: £15

Premium transaction fees apply
Next day terminal replacement

Mobile Card Machine
DX8000

It has:

Easier navigation improves usability
Provides a flexible transaction processing solution
Includes large touchscreen display and contactless reader
Offers simple menu, home and back Android navigation
Creates printed receipts for customers

Pricing

Simplicity Pricing Tariff (18-month terminal hire agreement). Better for businesses with lower transaction rates.

Transaction fee (Mastercard and Visa): 1.50 per cent

Monthly terminal hire fee: £15 per month

Next day terminal replacement
No authorisation fee
No premium transaction charges

Custom Pricing Tariff (18-month terminal hire agreement). For businesses that take over £75,000 in annual card turnover.

Transaction fee (on debit Mastercard and Visa card transactions): 0.75 per cent + 4.5p

Monthly terminal hire fee: £22.50 per month

Minimum monthly service charge: £15

Premium transaction fees apply
Next day terminal replacement

Worldpay eCommerce

Transaction fee (Mastercard and Visa): 1.3 per cent + 20p

Free next-business-day settlement
No minimum monthly charge
Virtual Terminal to take payments over the phone included at no extra cost
Pay by Link included
Access to Worldpay Dashboard
FraudSight™ and 3DS Flex™ basic are included
Card-on-File Tokenisation

Simplicity Payment Gateway

1.5 per cent transaction fee for Visa Card and Mastercard transactions
£19.95 per month online gateway fee

Take payments with Visa, MasterCard, Amex, Diners and Discover¹
Authenticate card payments using 3DS Flex
In Built Pay by Link and Virtual Terminal
Next business day settlement at no extra cost

Pros: Strong customer reviews on TrustPilot, can deal with all types of different payments with one merchant ID.

Cons: Auto renewal can catch some customers out unless they write to WorldPay 30 days before contract end telling them they don’t want to renew, reports of pushy salespeople.

Best for: Medium-sized businesses with consistent transaction levels all year round or more established businesses with higher transaction volumes and more complex needs.

Compare payment processor quotes

Small Business Pro

What is it? Small Business Pro is an all-in-one solution for entrepreneurs, allowing you to take payments with some of the lowest rates on the market, organise your appointments and invoices – you’ll even have the chance of winning a £2,500 grant every month.

How much does it cost?

Small Business Pro has two packages depending on the size of your business:

Sole Trader
(excluding employment disputes)

£39.99 (including VAT) per month

1 to 30 employees
(including employment disputes)

£49.99 (including VAT) per month

Pros: Save over £30 per month with an all-in-one package.

Cons: Not suitable for businesses with over 30 employees.

Best for: Construction, healthcare and beauty, coaches and freelancers, hospitality, retail and market traders, taxis and driving instructors

Try SB Pro

Zettle

What is it? Zettle by PayPal (formerly 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?

Zettle Payment Terminal (£149 a month + VAT)

All-in-one reader and POS service
No monthly fee
1.75 per cent transaction fee

It has:

Preloaded SIM card in case WiFi is unavailable. Mobile usage covered in original policy
Terminal with built-in barcode scanner for speed and ease of transaction
POS app which helps to manage inventory and print receipts
Get bank deposits to your PayPal business account in minutes
Accepts PayPal QRC, Payment Links, Apple Pay and Google Pay

Zettle Card Reader 2 (£29 + VAT)

Card reader only
No monthly fee
1.75 per cent transaction fee

It has:

Payment data encryption
Is tamper-proof
Capabilities to work with a range of POS apps
Integrates with platforms you may already use including Lightspeed, Quickbooks and BigCommerce
12-month warranty

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

Cons: The only phone support is available 9am-5pm Monday to Friday. You must also have a PayPal business account.

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

Compare payment processor quotes

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.

Standard

UK cards: 1.5 per cent + 20p
EU cards: 2.5 per cent + 20p
Link cards: 1.2 per cent + 20p
International cards: 3.25 per cent + 20p

Customised

You can 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, 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 over 135 different currencies and customers don’t need a Stripe 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 £20 for any disputed transactions (from April 10, 2023).

Best for: Online businesses with access to a developer.

Compare payment processor quotes

GoCardless

What is it? Collect one-off or recurring payments with GoCardless, with a package specifically geared at small businesses.

How much does it cost?

Standard

1% + £/€0.20 per transaction
2% + £/€0.20 per transaction for international transactions

Advanced

1.25% + £/€0.20 per transaction
2.25% + £/€0.20 per transaction for international transactions

Pro

1.4% + £/€0.20 per transaction
2.4% + £/€0.20 per transaction for international transactions

Pros: Has integrations with Xero, QuickBooks, Sage and Salesforce, successfully collects 99 per cent of one-off payments and 97.3 per cent of recurring payments are collected first time. GoCardless also has customisable packages and no set-up costs.

Cons: Takes a while for payments to clear, limits to how many currencies it can accept, can be difficult to track payments.

Best for: Small businesses looking for ease.

Compare payment processor quotes

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 on eligible websites and apps and do their shopping by voice with Amazon Pay for Alexa Skills.

How much does it cost? If your monthly payment volume is under £50,000, your payment processing fee will be 2.7 per cent and the authorisation fee will be 30p per transaction.

If it’s over £50,000, then you can apply to Amazon for a payment volume discount.

Cross-border fees

Amazon Pay also charges cross-border fees for sales outside the UK of up to 1.5 per cent.

Amazon Pay cross-border fee

Aland Islands, Denmark, Finland, Iceland, Norway, Sweden	0.4%
Austria, Belgium, Canada, Channel Islands, Cyprus, Estonia, France (including French Guiana, Guadeloupe, Martinique, Réunion and Mayotte), Germany, Gibraltar, Greece, Ireland, Isle of Man, Italy, Luxembourg, Malta, Monaco, Netherlands, Portugal, Montenegro, San Marino, Slovakia, Slovenia, Spain, United States, Vatican City State	0.5%
Andorra, Albania, Bosnia & Herzegovina, Bulgaria, Croatia, Czech Republic, Hungary, Latvia, Liechtenstein, Lithuania, Macedonia, Moldova, Poland, Romania, Russian Federation, Serbia, Switzerland, Turkey, Ukraine	1.0%
Rest of the world	1.5%

Source: Amazon

Currency conversion

Amazon charges a currency conversion set at 0.5 per cent above its bank’s wholesale exchange rate.

Chargeback dispute fee

If you dispute a chargeback claim not covered under Amazon’s payment protection policy, Amazon Pay charges a fixed fee of £14 + VAT to your merchant account.

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

Best for: Online retail businesses

Compare payment processor quotes

You can find the right card payments provider for you with takepayments.

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. However, using Shopify Payments removes the commission Shopify takes on top of payment gateway fees. That’s 2 per cent on Basic, 1 per cent on Shopify and 0.5 per cent on Advanced.

Basic

Monthly cost: £19 (£1 for the first month)
Online credit card transaction fees: 2 per cent +25p
In-person credit card fees: 1.7 per cent + 0p in person

Shopify

Monthly cost: £49 (£1 for the first month)
Online credit card transaction fees: 1.7 per cent + 25p
In-person credit card fees: 1.6 per cent + 0p in person

Advanced

Monthly cost: £259 (£1 for the first month)
Online credit card transaction fees: 1.5 per cent + 25p
In-person credit card fees: 1.5 per cent + 0p in person

Pros: You can set up Shopify Payments instantly and try it out free for three 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 chargeback fees of £10 per chargeback and, like Stripe, if the decision doesn’t go your way, you lose the fee.

Best for: Online retail businesses

Compare payment processor quotes

SumUp

What is it? SumUp offers card readers that can be used on-site or on the go.

How much does it cost?

No contract

Transaction fees of between 1.69 per cent and 2.5 per cent when you take a payment using a SumUp card reader but no monthly charges or contract. However, if you have a SumUp Business Account, the transaction fee falls to 1.49 per cent.

£0 monthly cost
Card reader: 1.69 per cent
Online payment: 1.69 per cent

SumUp One

Lower fees if you take out a cancel-anytime subscription plan.

£19 monthly cost
Card reader: 0.99 per cent
Online payment: 0.99 per cent

Pros: SumUp’s offering has a fixed transaction rate which is lower than some of its competitors, with no monthly fee. It also has paperless onboarding and no contractual obligations. The Air can process over 500 transactions on a single charge while the Solo card reader has unlimited mobile data and WiFi connectivity.

Cons: There’s no phone support on weekends or late evenings and their social media feeds have several complaints about poor customer service.

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

Compare payment processor quotes

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 of €0.11 (10p) plus a fee depending on what payment method you use (MasterCard/Visa 0.6 per cent, American Express 3.95 per cent)

Pros: Adyen has no monthly fee and no set-up, integration or closure fees.

Cons: With the fees it does charge, 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 a minimum of 1,000 transactions a month to keep your account in good standing. Reviews on TrustPilot say that the customer service is lacking.

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

Compare payment processor quotes

Cybersource

What is it? Owned by Visa, Cybersource allows you to accept payments online, in-person and via mobile throughout the world. Automated screening helps you prevent fraud and Click to Pay allows customers to pay faster without account details or passwords, meaning more satisfied customers and a lower likelihood of abandoned carts.

How much does it cost?

Contact Cybersource directly to find out pricing.

Pros: Cybersource has payment acceptance in over 160 countries around the world in more than 50 currencies.

Cons: Larger sales volumes incur larger fees and it’s available on a long contract. On top of that, you can’t access transactions that are more than six months old. There’s also no free trial.

Best for: More established small business who have developers.

Compare payment processor quotes

Opayo

What is it? Opayo (formerly Sage Pay) offers solutions for online payments, card terminals, phone and point of sale.

How much does it cost?

Pricing plans are split as follows:

Face-to-face payments

Start Simple: No monthly fee and from 1.75 per cent transaction fee, £29 one-off device fee
Business Booster – Desktop: £15 per month with card machine and a transaction fee starting at 0.99 per cent.
Business Booster – Wireless: £18 monthly fee for a wireless portable terminal with a transaction fee from 0.99 per cent.
Operate Smarter: £40 per month for tablet-sized terminal with a one per cent transaction fee. Transaction fee from one per cent.
Business Control: £62 per month with a 15.6″ talech Register touchscreen with a 1.2 per cent transaction fee. Transaction fee from 1.2 per cent.

Payments online (also covers payments over the phone and by mail)