Did you know that it will cost you money to accept credit card and debit card transactions in your business?
Cheapest Credit Card Processing Companies
Businesses depend on cost-effective ePOS systems to process credit card and debit card payments by customers. However, some credit card processing companies charge high transaction fees as well as extortionate monthly costs and setup costs just so you can access your own money.
But, how much does an ePOS system cost? There are cheap credit card processing companies available if you have insider information. In this article, we will explore some of the cheapest options available, determining which processing companies are best.
|1. Stripe||★★★★★||Click Here|
|2. Elavon||★★★★★||Click Here|
|3. GoCardless||★★★★★||Click Here|
|4. Worldpay||★★★★★||Click Here|
|6. Shopify||★★★★★||Click Here|
|7. Smartpay Anywhere From Barclaycard||★★★★★||Click Here|
|8. SumUp||★★★★★||Click Here|
|9. Square||★★★★★||Click Here|
|10. PayPal||★★★★★||Click Here|
What Is a Credit Card Processing Company?
Credit card processing companies are also referred to as merchant service providers and offer payment processing solutions to businesses like yours.
If you want to accept credit card, debit card, and electronic payments from customers, you will need a payment processor.
Each merchant account provider offers a different pricing structure that includes monthly or pay-as-you-go plans. Credit card processing costs include virtual terminal fees to accept payments over the phone as well as payment gateway fees to allow online purchases from customers.
Each payment processed by your merchant account provider will result in a transaction fee of between 1% and 5% of the purchase value.
If you accept international payments, the transaction fee may be higher, resulting in paying a fee per transaction plus interchange rate.
How Do Credit Card Processing Companies Make Money?
Credit card processing companies make money every time you make a sale via a card payment or electronic payment. The merchant service provider will deduct an agreed percentage of the purchase value.
For example, your customer makes a purchase worth £100 with their debit or credit card. Your processing company charges a transaction fee of 2% of the purchase value. This means that to process the payment, the processing company will deduct £2 and give your business £98.
Additionally, some payment processing companies will also charge a flat rate for every transaction processed. This fee is typically in the region of 10p–50p.
Depending on the merchant account provider you are using, you may also need to pay a monthly cost as well as hardware fees. Monthly costs range from £20 per month to several hundred pounds per month. Hardware costs will vary per device but usually range from £50 to £2,000, rising further if you need more than one terminal.
How Can I Take a Card Payment From a Customer?
To take a card payment from a customer, you will need an account with a merchant account provider. This is the intermediary between your bank account and the customer’s bank account and checks the validity of the transaction as well as safeguards the finances of all involved.
When signing up for a merchant account, you will receive a card reader or other hardware device, depending on the needs of your business and how much cash you can invest into equipment.
To take a card payment, enter the amount of the purchase into the card machine or other hardware device and ask the customer to tap or insert their card.
There is a contactless limit of £100 per transaction, however, purchases above this amount require a chip and PIN transaction.
Once the customer has performed this action and tapped or inserted their card, the customer’s details are sent to the merchant account which checks whether the customer has sufficient funds in their bank account for the purchase.
If they do have enough money, signals are sent to complete the transaction. The money is deducted from the customer’s bank account or card limit, although the business’s bank account does not receive the payment immediately.
Payment to the business can take place the next day with some of the best merchant service providers, although other providers pay the business their cash several days later. It is at this stage that the merchant account provider will deduct their fee for the transaction.
What Is the Cheapest Way For a Business to Take Card Payments?
The cheapest way for a business to take card payments is to sign up to a pay-as-you-go processing company. You will pay zero monthly fees and any set up costs should be minimal. You will only pay any money to the processing company when you make a sale.
The only fees you will need to consider are the transaction fee per purchase as well as any relevant flat fees. Look for a competitive transaction fee, however, instead of settling for the first credit card processing company that you can find.
What Are the Benefits of Using Credit Card Processing Services?
The benefits of using credit card processing services centre on being able to accept a range of payment methods from customers. Otherwise, you would only be able to process cash payments from customers, limiting customer choice and convenience.
Here are the main benefits of using credit card processing services in your business:
Accepting Card Payments
2.18 billion debit card transactions were made by UK customers in June 2023, in addition to 368.5 credit card purchases.
By using a credit card processing company in your business, you can accept card payments and allow customers to spend money in your business using their debit and credit cards.
A payment gateway with your merchant account will ensure that your customers can make online purchases. Different fees may be payable for a payment gateway, as well as a monthly fee.
Integrate a variety of software into your system, automatically updating your accounting records when transactions are linked with accounting software. Your ePOS system can also integrate CRM features to look after your customer data and inventory management functions to check and manage stock in your business.
With so many options available for your business, you have the flexibility to adapt your credit card processing plan as your business grows.
For example, when you are just starting your business, a pay-as-you-go option may be best. Then, as your business grows and you can afford higher costs, you could increase the hardware used in your business and choose a monthly plan with lower transaction fees.
Are There Any Disadvantages of Using Credit Card Processing Services?
Whilst using credit card processing services is a necessity in a modern business, there are a few disadvantages to look out for.
The main disadvantage of using credit card processing services is the cost involved. You might need to pay a monthly fee to the merchant service provider as well as pay a series of upfront costs for hardware devices.
Further costs include transaction fees for every purchase, and sometimes a flat for every purchase.
Your business will not receive the payment from the customer on the day that the transaction is made. Typically, you will need to wait several days for a customer payment to be received into your business bank account, minus the transaction fee and any flat fee applicable.
Whilst technology has built-in fraud prevention security, all systems are still vulnerable to hacking and theft.
Relying on technology too much can result in problems arising if the technology ever fails. It is important that you have a back up plan in case your technology does not work.
Some merchant account providers require a contract to be signed for 6, 12, or 18 months. If you want to leave the provider and choose a different company to process your card payments, you could face exit costs.
At a Glance, Pros and Cons
Take a look at this section to digest a clear overview of the pros and cons of using credit card processing companies in your business:
✔️ Security — A cashless business increases security from theft.
✔️ Convenience — Allowing your customers to pay for purchases using card payments and electronic payments increases convenience and enhances the customer experience.
✔️ Integration — Accepting payments via credit and debit cards as well as online and electronic transactions can be integrated with other software to reduce the admin tasks in your business.
✔️ Business growth — Increase your business sales by expanding your payment methods.
❌️ Transaction fees — You will pay a transaction fee for every purchase processed by the merchant account, ranging from 1% to 5% of the purchase value.
❌️ Flat fees — Some companies will require a flat fee of between 10p to 50p for every transaction processed.
❌️ Monthly costs — Some credit card processing companies will charge your business a monthly fee which must be paid even if no sales are made.
❌️ Hardware costs — Depending on the devices you want to use in the business, you may need to pay for hardware to use a credit card processing service.
Cheapest Credit Card Processing Company — Reviews
Here is our expert review of the best credit card processing services, with some of the cheapest credit card processing fees available in 2023:
1. Stripe — Best Overall Company
- Accepts a wide range of payment methods
- Add buy now, pay later
- Built-in invoicing
- Reporting and insight tools
- Pre-built integration
- Customer support
- Standard transaction fee for UK cards: 1.5% + 20p
- Standard transaction fee for EU cards: 2.5% + 20p
- Typical transaction fee for international cards: 3.25% + 20p
- Link fee for UK cards: 1.2% + 20p
- Zero monthly fees
- Zero set up costs
Stripe payment processing is fast becoming a leader in credit card processing services. Accepting a vast range of payment methods, your customers have the freedom to choose whether they pay with a credit card, debit card, a digital wallet transaction, or payment via a link.
Features such as buy now, pay later can also be utilised if you desire, depending on your customer relations and the nature of your business.
Built-in invoicing and further reporting and insight tools also feature as standard, providing your business with the ability to spend less time on admin tasks, whilst increasing the accuracy of your data.
Pre-built integrations can also be used to make life easier, whilst also providing your business with excellent customer support, 24/7.
To use Stripe’s credit card processing services, you will be charged a transaction fee of 1.5% of the purchase value for UK cards, or 2.5% of the purchase value for EU cards. A flat fee of 20p is also payable for every payment processed.
International cards will also be subject to a 20p flat fee in addition to a transaction fee of 3.25% of the purchase value.
The cheapest payment processing fee is charged at 1.2% of the transaction value when paid via a link. Once again, the flat fee of 20p also applies.
When using Stripe to process card payments, you will be charged no monthly fees at all. There are also no set up costs, providing you with one of the cheapest and best credit card processing companies for UK businesses.
2. Elavon — Best for Price Packages
- Accepts many payment methods
- A range of plans available for in-person and online transactions
- Choose from a variety of hardware
- Good customer support network
- Start Simple plan: Zero monthly fee plus 1.75% transaction fee
- Business Booster plan: £15 monthly fee plus 0.99% transaction fee
- Operate Smarter plan: £40 monthly fee plus 1% transaction fee
- Business Control plan: £62 plus 1.2% transaction fee
- Always Open PAYG payment gateway: £0 monthly fee, 1.99% transaction fee + 12p
- Always open fixed payment gateway: £25 monthly fee, 0.99% transaction fee
Elavon offers a series of packages to suit every business and every budget. When choosing Elavon, you will provide your customers with the choice to make a purchase with many payment methods.
When opting for your chosen plan, there are many hardware options to choose from, suiting your business from in-person sales to online payments. You will also receive a good customer support network if any problems ever arise.
The highest transaction fee you will pay for a payment to be processed is 1.75%, although this fee comes with the Start Simple plan and no monthly fee. To go ahead with the Simple Start plan, you will need to pay a one-off cost of £29 for the pocket-sized hardware device.
The Business Booster plan will cost you £15 every month and is suitable for businesses wanting a fixed card machine, or a portable device. You will pay a very low transaction fee of 0.99% of the purchase value when opting for this plan.
The Operate Smarter plan offers a tablet-sized terminal, complete with a touchscreen and the latest software. You will pay a monthly fee of £40 and a low transaction fee of 1% of the purchase value.
If you are looking for a Talech Register measuring 15.6” in addition to a receipt printer, scanner and cash drawer, you will need Elavon’s Business Control plan. This plan will cost you £62 each month and comes with a transaction fee of 1.2% of the purchase value.
If you are running an e-commerce business and only need a payment gateway to process online payments, Elavon offers a contract-free plan with no monthly cost. The Always Open pay-as-you-go plan requires a transaction fee of 1.99% and 12p for the gateway click-fee. You will also need to pay a set up fee of £99.
If you join the Always Open fixed payment gateway plan, you will pay a monthly fee of £25 and a transaction fee of 0.99% of the purchase value. However, there are no click-fees payable and no setup costs. You can process 350 transactions before incurring any further costs.
3. GoCardless — Best for Recurring Payments
- Set up recurring payments
- Accepts a wide range of UK and international payment methods
- Integrate with other software
- Standard plan: Transaction fee of 1% + 20p for UK cards
- Transaction fee of 2% + 20p for international cards
- Advanced plan: Transaction fee of 1.25% + 20p for UK cards
- Transaction fee of 2.25% + 20p for international cards
- Pro plan: Transaction fee of 1.4% + 20p for UK cards
- Transaction fee of 2.4% + 20p for international cards
GoCardless payment processing is a good company to use if you are an online business. You can set up recurring payments with your customers to ensure payment on time and to increase customer convenience.
A wide range of UK and international payment methods are accepted by GoCardless, with the exchange rate taken care of for you.
Furthermore, you can integrate your GoCardless account with other software, such as Xero’s cloud-based accounting software to link up your payments to your accounts. You can spend less time working on admin tasks whilst ensuring that your data is fully accurate.
When joining the GoCardless standard plan, you will pay no monthly fee. A transaction fee of 1% of the purchase price for UK cards and 2% for international cards is applicable, in addition to a flat fee of 20p per transaction.
The Advanced plan from GoCardless includes added features such as being able to view customers’ bank account details when they checkout to assess validity and prevent being vulnerable to fraud. You will pay no monthly fee, just a transaction fee of 1.25% of the purchase value for UK cards and 2.25% of the value for international cards. A flat fee of 20p per transaction applies, however.
You could opt for the Pro plan from GoCardless, increasing the security features available such as monitoring and challenging chargebacks. You will pay no monthly fee and transaction fees will be charged at 1.4% for UK cards and 2.4% for international cards, in addition to the 20p flat fee per transaction.
A custom plan is available for larger businesses that experience a high volume of transactions and need a specific, tailored card payment processing solution.
4. Worldpay — Best for Brand Recognition
- Choose from monthly or pay-as-you-go accounts
- PCI compliance included
- Contracts from 12 months to 3 years
- Quick payment settlements
- Gateway Standard plan: From £19 per month
- Gateway Advanced: From £45 per month
- Gateway Bespoke: Custom plans
- Transaction fees between 0.95% to 2.75%
Worldpay merchant services can offer your business monthly plans with contracts ranging from 12 months to 3 years. You could also choose a pay-as-you-go plan if your business is new or you want to try the card processing services prior to signing a contact.
PCI compliance comes complete with your account, ensuring that your customers’ data is safe and secure at all times. In addition, you can receive your payments faster with quick payment settlements.
Monthly plans with Worldpay start at £19 per month with the Gateway Standard plan. You can process up to 350 transactions each month and there are no set-up fees.
The Gateway Advanced plan will cost your business £45 per month. You can process 500 more transactions than the standard plan and you can accept payments via digital wallet and international payment methods.
If you need a custom plan tailored to your business, the Gateway Bespoke plan could be the best choice for you. You can achieve lower transaction fees on this plan as well as 24/7 support and advanced tools for fraud detection.
Transaction fees range from 0.95% to 2.75%, depending on your plan as well as the volume of transactions regularly processed.
5. PaymentSense — Best for Tech Support
- Choose from portable, mobile, and countertop hardware
- Take card payments online, in-person or over the phone
- Get your exit fees paid when you switch
- 24/7 tech support
- Monthly fee: £20 per POS terminal
- £9.95 for a payment gateway
- Transaction fee: From 1.4% + 5p
- An additional fee of 50p applicable to all payments made over the phone.
PaymentSense payment processing options range from different hardware choices to enable your business to take card payments online, in-person or over the phone.
You can choose from different hardware including portable, mobile and countertop devices, tailoring your hardware to suit the needs of your business.
If you are currently tied to another credit card processing company, PaymentSense might pay your exit fees up to a value of £3,000. You could switch to PaymentSense at no extra cost to you.
The monthly fee required by PaymentSense is £20, with an additional £9.95 fee if you require a payment gateway for online payments to be processed.
You will pay a transaction fee of 1.4% of the purchase value in addition to a 5p authorisation fee. Furthermore, to process payments over the phone, you will be charged a fee of 50p per transaction, as well as a transaction fee of 1.4% of the purchase value.
6. Shopify — Best for Online Businesses
- Get 3 months for only £1 per month on any plan
- Receive 25% discount when paying yearly
- Multiple plans to suit any business
- Competitive transaction fees
- Starter plan: Perfect for social media selling
- £5 per month and 5% transaction fee
- Basic plan: £25 per month
- Transaction fee of 2% + 25p for online purchases
- Transaction fee of 1.7% + 0p for in-person purchases
- Shopify plan: £65 per month
- Transaction fee of 1.7% + 25p for online purchases
- Transaction fee of 1.6% + 0p for in-person purchases
- Advanced plan: £344 per month
- Transaction fee of 1.5% + 25p for online purchases
- Transaction fee of 1.5% + 0p for in-person purchases
Shopify payment processing services is the perfect company for online businesses. Accept a vast range of payments online to satisfy your customers and expand your business. There are plans to suit all businesses along with competitive transaction fees.
The Starter plan will cost you £5 per month and no set up costs. This package is perfect for social media selling, although transaction fees are 5% of the purchase value, which is quite high.
The Basic plan will cost you £25 per month and charges a transaction fee of 2% for online purchases, as well as a flat fee of 25p. If your customers buy in person, you will be charged a transaction fee of 1.7% and no flat fee at all.
The Shopify plan is perfect for businesses that sell with a Shopify account. You will pay a monthly fee of £65, in addition to transaction fees of 1.7% for online purchases. A flat fee of 25p is also payable. To process in-person transactions, the transaction fee charged is 1.6%, with no flat fee.
If you are running a large business, the Advanced plan could be perfect for you. At a cost of £344 per month, this plan is not cheap, although you can acquire a transaction fee of 1.5% for both online and in-person transactions. A flat fee of 25p is applicable for online purchases, however.
7. Smartpay Anywhere From Barclaycard — Best for Pay-As-You-Go
- Pay-as-you-go specialist
- Create your account fast
- Barclaycard reputation
- Zero contract
- Zero monthly fee
- One-off device fee: £29 + VAT
- Transaction fee: 1.6%
Smartpay Anywhere from Barclaycard is our favourite choice in pay-as-you-go payment processing companies. Accounts are created quickly whilst you can rely securely on Barclaycard’s reputation.
To access a credit card processing account from Smartpay Anywhere, you will pay no monthly fee and you do not need to sign a contract. Your customers can pay for purchases using credit cards and debit cards, and a range of digital wallets such as Apple Pay.
A one-off cost of £29 plus VAT is required to rent your hardware device. Then, the only cost you will pay is a transaction fee of 1.6% of the purchase value. There are no flat fees payable.
You can access real-time sales data from the downloadable app or your portal dashboard. In addition, you could secure a FreshBooks account when accessing a Smartpay Anywhere account, helping you to look after your accounts and grow your business.
8. SumUp — Best for Simple Plans
- Clear fees and simple plans
- Integrate with QuickBooks
- Additional features can be added to the account
- Transaction fees for card payments: 1.6%
- Transaction fees for virtual terminals: 2.5%
- Transaction fees for payment gateways: 2.5%
SumUp card processing services offer simplicity so you know the transaction fees you will have to pay. Transaction fees for card payments are charged at 1.6%, with payments via a payment gateway or virtual terminal are payable at 2.5% of the purchase value. There are no hidden fees and full support is provided.
Your SumUp account can be customised to meet the demands of your industry, from retail to hospitality. Access one-click reports to monitor your finances and to aid your business decision making skills.
Depending on the needs of your business and the expectations of the account, you can add on additional functions to help your business thrive. Integration with QuickBooks is a particular benefit, reducing the time you will need to complete admin tasks whilst increasing data accuracy.
9. Square — Best for Quick Payments
- Choose different hardware devices
- Pick your own tools
- Add additional features such as QR codes
- Receive payments faster
- Zero monthly fee
- Hardware cost: £19 + VAT
- Transaction fee for card payments: 1.75%
- Transaction fee for virtual terminals: 2.5%
- Transaction fee for online transactions: 1.4% + 25p for UK cards
- 2.5% + 25p for non-UK cards
Square card processing services are a good choice in merchant accounts if you want to receive payment to your business account faster. Other credit card processing companies take several days to pay business transaction payments, although Square promises to beat this time frame.
Square is fully customisable so you can choose the hardware devices that suit your business. Add your own tools or features such as the use of QR codes, increasing the number of payment methods available to your customers.
To acquire a Square account, you will pay no monthly fee although a hardware cost of £19 plus VAT is required as a one-off cost. The transaction fee for card payments is 1.75% of the purchase value, whilst the transaction fee for virtual terminals reaches 2.5%.
If you want to accept online purchases, the required transaction fee is 1.4% plus a 25p flat fee for UK cards. Non-UK cards will be charged at a rate of 2.5% plus a 25p flat fee when processed as an online transaction.
10. PayPal — Best for Large Businesses
- Trusted global brand
- Available integrations
- Three day processing period
- Transaction fees for cards: From 1.2% + a flat fee
- Transaction fee for QR code payments: From 1.5% + a flat fee
- Transaction fees for other payments: From 2.9% + a flat fee
PayPal’s processing services offer a trusted global brand with available integrations. You can add ecommerce integrations such as Shopify as well as accounting integrations such as QuickBooks. Furthermore, receive your money from customer payments within three days.
Transaction fees for card payments will cost you 1.2% of the purchase value, whilst other payments will incur a 2.9% transaction fee. QR codes can be used to make payments, also, and will be charged at a fee of 1.5% of the purchase value.
However, a flat fee is payable for every transaction and is determined according to the currency. For example, British Sterling incurs a 30p flat fee for each transaction made.
Leading Credit Card Processing Companies: The Verdict
Our best merchant service provider is Stripe, requiring zero monthly fees and zero setup costs. You will only pay a fee when a transaction is made, with transaction fees as low as 1.5% of the purchase value, plus a flat fee of 20p.
10 Cheapest Credit Card Processing Companies: FAQs
What are dedicated or aggregated merchant accounts?
An aggregated merchant account is perfect for small businesses and requires no monthly fees or setup costs. Other businesses will be pooled with your business by the merchant account provider to ensure that your fees remain as low as possible.
A dedicated merchant account is your own merchant account if you do not want to enter into an aggregated merchant account.
What is an internet merchant account?
Internet merchant accounts are perfect for ecommerce and are for accepting online payments when a customer makes a purchase from your business’s online store.
Which credit card processor is best?
Merchant account providers and credit card processors are judged on their performance when processing transactions and the fees they charge businesses. Credit card company pricing is competitive yet dependent on your desired credit card processing equipment and if you achieve high transaction volumes.
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