In November 2006, internet sales accounted for just 2.6% of all retail sales in the UK. Prior to the coronavirus pandemic of 2020, that had risen to 21.4% in the preceding Christmas period. People have lost their fear of ordering over the internet and, in response, the number of new online payment systems providers has increased greatly as they compete to help businesses wanting to launch ecommerce sites.
Some merchant service providers now offer your company the ability to take payments online with zero set-up charges and zero monthly fees. However, just because there’s no cost to launch an account doesn’t mean that it represents the best overall value nor does it mean that your account will be as flexible as it needs to be for your business.
In this article, we examine:
- the 15 cheapest online payment systems following our team’s extensive research
- the key words and concepts you need to know, in plain English, about online merchant accounts
- an in-depth review of the 10 most competitive online payment providers in the UK
- what you need to consider before making your choice
Want help to find the best online payment processor? Please fill in the form at the top of the page and let us know about your business and the volume of sales you make (or expect to make) online. We’ll then approach the online payment providers on our panel most likely to offer you a competitive deal – let us try to negotiate an even better one for you.
We don’t charge for our service and you don’t have to sign up to any offer made to you by one of our partners.
The cheapest merchant services in the UK
Which is the cheapest online payment system in the UK? Our team have researched the market, the suppliers, and the tariffs thoroughly and, in ascending order, these are the most competitive deals we have found.
| Merchant service provider | Set-up fees | Annual fees | Processing fees | Total | Percentage of turnover |
| PaymentSense | £0.00 | £99.60 | £1,330.00 | £1,429.60 | 1.43% |
| Barclaycard | £150.00 | £180.00 | £1,250.00 | £1,580.00 | 1.58% |
| TakePayments | £0.00 | £240.00 | £1,501.00 | £1,741.00 | 1.74% |
| PayZone | £0.00 | £240.00 | £1,580.00 | £1,820.00 | 1.82% |
| Shopify | £0.00 | £274.80 | £1,640.00 | £1,914.80 | 1.91% |
| WorldPay | £0.00 | £239.40 | £1,750.00 | £1,989.40 | 1.99% |
| myPOS | £0.00 | £0.00 | £2,250.00 | £2,250.00 | 2.25% |
| Payline | £0.00 | £376.08 | £2,114.00 | £2,490.08 | 2.49% |
| SumUp | £0.00 | £0.00 | £2,500.00 | £2,500.00 | 2.50% |
| Square | £0.00 | £0.00 | £2,500.00 | £2,500.00 | 2.50% |
| HSBC | £250.00 | £240.00 | £2,050.00 | £2,540.00 | 2.54% |
| Retail Merchant Services | £0.00 | £120.00 | £2,688.00 | £2,808.00 | 2.81% |
| izettle | £0.00 | £348.00 | £2,500.00 | £2,848.00 | 2.85% |
| Elavon | £25.00 | £240.00 | £3,030.00 | £3,295.00 | 3.30% |
| Paypal | £0.00 | £0.00 | £3,460.00 | £3,460.00 | 3.46% |
How did we arrive at those figures? We assume a turnover on cards of £100,000 a year – 2,000 separate transactions of £50 each half of which are made on debit card and the other half on credit card.
As this article is comparing merchant service accounts for company owners primarily interested in selling online, we have not factored the cost of any physical equipment into the price table above. However, particularly on some of the deals with annual accounts, you may be provided with physical equipment anyway – you might want to try to negotiate the price down with an individual supplier in case you really don’t need one.
What do the columns mean?
In the table above, the columns you can see mean the following:
- set-up fees – the cost of opening an account with that supplier
- annual fees – the cost of maintaining your account with a merchant services provider
- processing fees – the cost of processing £100,000 of orders online, half of which are made by credit card and the other half by debit card
- total – the sum of set-up fees, annual fees, and processing fees
- percentage of turnover – how much of your turnover total the fees and charges would account for if you chose this online card payment provider
How has this table of providers been compiled?
Some of the online payment providers on our list provide full and comprehensive price lists on their websites. Where this is the case, we have selected the option for inclusion which has the cheapest standing charges.
For those whose price lists are incomplete or those which provide no indication of charges at all on their website, our team of researchers have examined a large number of customers’ reviews online to estimate those suppliers’ likely fees and charges. In most cases, different customers quote different fees and charges in their review and we use the median value of those quotes for comparison.
We found the gathering of information on PaymentSense, TakePayments, and Elavon the most challenging however, thanks to the large number of recent reviews online, we are confident that our median estimate of charges for these firms fairly represents a quote which a company with £100,000 online turnover would receive.
With almost all of the companies listed on the chart, there are deals to be done especially where there is a monthly charge. Don’t accept their first offer and, better still, play one supplier off against the other to secure the best rate.
You can search and negotiate those deals for yourself or you can get us to do it. Simply fill out the form at the top of the page, tell us as much as you can about how much you are selling or you think you’ll sell online, and we’ll negotiate with the merchant services providers on our panel most likely to offer you the most competitive deal.
Our service is free of charge and you don’t have to accept any offer made to you by one of our partner online payment providers.
Top 10 online payment systems
Before we share the 10 most competitive online card payment tariffs with you, we need to let you know what the information contained in each review means.
Minimum monthly fee for ecommerce-enabled card payments
For those merchant services providers which charge a monthly fee, not all of their basic accounts will include the ability for you to take payments via your internet site. The price we show for each provider is the minimum you will pay to have an account with them which does allow online transactions.
Minimum term
Some online payment providers require you to sign up to their services for a minimum length of time. If you attempt to leave your contract with them before the agreed end date, you may be charged a withdrawal fee which may range from an amount reflecting the remaining monthly subscription payments to the likely fees they would have charged you in full for the remaining part of the agreement.
There are some horror stories online about online payment providers heavily penalising clients who leave early so please check a supplier’s terms and conditions before you enter any agreement with them.
Payment hardware
Almost all merchant account providers offer physical hardware enabling you to take payment face to face from customers. This may be a wired terminal next to the till in your shop or a device which connects to your mobile phone via Bluetooth meaning that you can take payment anywhere.
Where equipment is not provided as part of any monthly fee from a listed supplier, we show you the minimum and maximum prices of the equipment on offer. Very inexpensive hardware tends to be the type of equipment which connects to your mobile phone while more expensive hardware tends to be wired terminals, portable terminals, or EPOS systems.
Typical credit card fee
In our reviews, typical credit card fees refers to the transaction charges levied by your supplier for accepting a consumer’s credit card issued in either the UK or EU. Business cards and cards issued outside the UK or EU may attract a higher fee.
Typical debit card fee
As with credit cards, the fees we display are for UK- or EU-issued consumer debit cards. Business cards and cards issued outside the UK or EU may attract a higher fee.
Invoice payments fee
Some merchant service suppliers provide their clients with an app which allows them to send an invoice by email to their client containing a secure link. When a customer clicks on that secure link, they can pay by credit or debit card. Where there is a different fee structure to standard credit and debit card payments, you’ll see that in the supplier’s review.
Inventory management
With inventory management, you can program your lines of stock into your payment processor’s app so that your products and services appear on your internet site as well as on the apps you use when taking payment in a physical environment like a store.
An inventory management system also keeps track of how much of each line of stock you have as it sells and it can be programmed to alert you to order more stock when current levels run low.
Website templates included for online sales
Payment processors targeting potential clients whose sales are mostly done over the internet will often offer DIY ecommerce website solutions. Where such a service is available, this is indicated on the supplier’s review.
Cash advance available
Some online card payment processors offer “merchant advance loans” to clients. With a merchant advance loan, you can borrow money from your supplier based upon how much your customers spend with you a month on debit or credit cards.
You repay the loan gradually as a percentage of the daily settlement (when your online card processor pays money into your bank account) you’re expecting from your merchant services provider until the facility is repaid. You should expect to pay about £1.30-£1.40 for every £1 you borrow with a cash advance.
1. Payment Sense
| Merchant service provider | Payment Sense |
| Minimum monthly fee for ecommerce-enabled card payments | £8.30 |
| Set-up fee | £0.00 |
| Minimum term | 18 months |
| Payment hardware | Yes |
| Typical credit card fee | 1.30% + £0.15 |
| Typical debit card fee | 1.30% + £0.15 |
| Invoice payments fee | 1.30% + £0.15 |
| Inventory management | No |
| Website templates included for online sales | Yes |
| Cash advance available? | Yes |
| Cards accepted | American Express, Google pay, Apple pay, Contactless, Maestro, Mastercard, Visa |
Serving over 60,000 businesses around the UK, Payment Sense finishes top of our poll. However, we must caveat that by saying that information on them was difficult to find and the figures quoted above, other than for the monthly subscription, are estimates based upon the median prices reported by customers on online reviews.
You benefit from the £8.30 monthly subscription if you pay annually in advance otherwise it’s £9.95 a month. This is the rate for companies turning over less than £50,000 a year on debit and credit cards through their service.
For businesses taking £50,000 to £250,000 by card, the charges are £12.45 a month for an annual payment or £14.95 if paid monthly. Higher than that, the fee is £16.60 per month if paid annually otherwise £19.95 a month if paid monthly.
The company promises companies wanting to sell online that their account can be ready within just 24 hours.
2. Barclaycard Merchant Services
| Merchant service provider | Barclaycard Merchant Services |
| Minimum monthly fee for ecommerce-enabled card payments | £15.00 |
| Set-up fee | £150.00 |
| Minimum term | 18 months |
| Payment hardware | Yes |
| Typical credit card fee | 1.25% |
| Typical debit card fee | 1.25% |
| Invoice payments fee | 1.25% |
| Inventory management | No |
| Website templates included for online sales | No |
| Cash advance available? | No |
| Cards accepted | Accept all major credit and debit cards including Visa, Mastercard, Diners Club International, Discover and American Express. |
As with Payment Sense, a lot of the information we’ve discovered about Barclaycard Merchant Service’s online payment solution has been derived from mainly very positive customer reviews online.
Their 1.25% rate is particularly attractive and makes this option a real contender even with the set-up fee, the monthly fees from £15.00, and the minimum term.
There is no minimum term on Barclaycard Anywhere pay-as-you-go tariff but beware – the card transaction rates at 2.6% and there is no online functionality with this service.
3. Take Payments
| Merchant service provider | TakePayments |
| Minimum monthly fee for ecommerce-enabled card payments | £20.00 |
| Set-up fee | £0.00 |
| Minimum term | 12 months |
| Payment hardware | Yes |
| Typical credit card fee | 1.5% + £0.01 |
| Typical debit card fee | 1.5% + £0.01 |
| Invoice payments fee | 1.5% + £0.01 |
| Inventory management | No |
| Website templates included for online sales | No |
| Cash advance available? | No |
| Cards accepted | You’ll be able to accept all major credit and debit cards, including Mastercard, Visa, American Express and Maestro. |
Take Payments claims third place from its new stablemate, Payzone. Take Payments is one of the merchants on the list whose rates and fees are not easy to find on their website so, as with other providers, we have estimated median rates payable by their clients.
Take Payments are very well-thought of by customers – check out their reviews – and, with a bit of negotiation, you may be able to beat the prices listed above particularly if you have a competitor’s quote to hand.
4. Payzone
| Merchant service provider | Payzone |
| Minimum monthly fee for ecommerce-enabled card payments | £20.00 |
| Set-up fee | £0.00 |
| Minimum term | 12 months |
| Payment hardware | Yes |
| Typical credit card fee | 1.55% + £0.15 |
| Typical debit card fee | 1.55% + £0.15 |
| Invoice payments fee | 1.55% + £0.15 |
| Inventory management | No |
| Website templates included for online sales | No |
| Cash advance available? | No |
| Cards accepted | Our countertop card machine allows you to accept all major credit and debit cards such as Mastercard, Visa and American Express. Contactless and Apple pay enabled terminals. |
Payzone has recently been acquired by Take Payments, the company which finished third on our list. The two companies have a slightly different offering from each other in terms of transaction fees and the hardware they offer to customers.
Take Payments have announced that, over time, they intend to retire the Payzone brand name in favour of Take Payments. At that time, we will likely see Payzone’s current competitive offering be removed from the marketplace.
5. Shopify
| Merchant service provider | Shopify |
| Minimum monthly fee for ecommerce-enabled card payments | £22.90 |
| Set-up fee | £0.00 |
| Minimum term | 12 months |
| Payment hardware | Yes |
| Typical credit card fee | 1.6% + £0.20 |
| Typical debit card fee | 1.6% + £0.20 |
| Invoice payments fee | 1.6% + £0.20 |
| Inventory management | Yes |
| Website templates included for online sales | Yes |
| Cash advance available? | No |
| Cards accepted | Visa, Mastercard, American Express, Apple Pay, Android Pay |
Shopify, based in Canada, is and has been a major force in helping both new and established businesses launch ecommerce websites so that they can sell over the Internet.
They not only process payments for clients at competitive rates but they also provide inventory management services and attractive, mobile-friendly websites which you can customise for your store.
There are three levels of service – a $29 option, a $79 option, and $299 option. The higher priced options offer more features (many of which are more geared to help companies with retail or hospitality premises) as well as slightly cheaper transaction rates.
6. Worldpay
| Merchant service provider | Worldpay |
| Minimum monthly fee for ecommerce-enabled card payments | £19.95 |
| Set-up fee | £0.00 |
| Minimum term | 18 |
| Payment hardware | Yes |
| Typical credit card fee | 2.75% |
| Typical debit card fee | 1.75% |
| Invoice payments fee | Depends on type of card used |
| Inventory management | No |
| Website templates included for online sales | No |
| Cash advance available? | No |
| Cards accepted | All major debit and credit cards are accepted including Visa, Mastercard, China Union Pay, Diners Club International and Discover. American Express can be added on request. |
Worldpay is one of the world’s largest and most experienced online payment processors – it’s now owned by private investors although, over its lifespan, it’s actually been bought (and sold) by two major British High Street banks.
They have made a significant push into online payment processing in recent years. They offer deals on a minimum 18 month contract and, unusually for a larger and more established provider, they don’t charge any set-up fees.
7. myPOS
| Merchant service provider | myPOS |
| Minimum monthly fee for ecommerce-enabled card payments | £19.95 |
| Set-up fee | £0.00 |
| Minimum term | £0.00 |
| Payment hardware | Yes |
| Typical credit card fee | 2.25% |
| Typical debit card fee | 2.25% |
| Invoice payments fee | 2.25% |
| Inventory management | No |
| Website templates included for online sales | No |
| Cash advance available? | No |
| Cards accepted | Accept payments with major debit and credit cards, contactless cards and mobile wallets. |
myPOS offer online card processing services as well as standard face-to-face and over the phone card processing services to businesses. There is no set-up fee and no minimum term and the monthly charge is a competitive £19.95.
There are a couple of issues which lets this service down. First, there is a minimum monthly service charge of £10 in addition to the monthly fee – if you have a really quiet month with just a few transactions, you’ll be charged £10 for those transactions no matter how little money you took in. Second, the standard credit and debit card fees are much higher than other providers which makes the service uncompetitive.
8. Payline
| Merchant service provider | Payline |
| Minimum monthly fee for ecommerce-enabled card payments | £31.34 |
| Set-up fee | £0.00 |
| Minimum term | 0 |
| Payment hardware | Yes |
| Typical credit card fee | 2.10% + £0.07 |
| Typical debit card fee | 2.10% + £0.07 |
| Invoice payments fee | 2.10% + £0.07 |
| Inventory management | No |
| Website templates included for online sales | No |
| Cash advance available? | No |
| Cards accepted | Visa, Mastercard, American Express, JCB, Diners Club, Union Pay, Contactless, Apple Pay, Samsung Pay, Google Pay, Discover |
Payline’s offering is solid but expensive. The £31.34 it costs to take online payments (that’s the standard €15 a month for an account with a €20 additional charge for ecommerce capabilities) is steep as are the fees at 2.1% (transaction plus margin estimate) plus 7p.
Pay outs to your bank account are made with 1-3 days and the company will drop its prices for merchants turning over £250,000 a year or more.
9=. SumUp
| Merchant service provider | SumUp |
| Minimum monthly fee for ecommerce-enabled card payments | £0.00 |
| Set-up fee | £0.00 |
| Minimum term | 0 |
| Payment hardware | Yes |
| Typical credit card fee | 2.50% |
| Typical debit card fee | 2.50% |
| Invoice payments fee | 2.50% |
| Inventory management | No |
| Website templates included for online sales | Yes |
| Cash advance available? | No |
| Cards accepted | Visa, Vpay, Mastercard, Maestro, American Express, Google Pay, Apple Pay, Contactless |
In joint 9th place, SumUp is an easy-come, easy-go option with no set-up fees and no monthly fees. It offers website templates which are customisable to a company’s branding and colours to enable ecommerce payments. There is also a range of equipment available for retail, leisure, and hospitality businesses as well as the opportunity to take payments over the phone.
At 2.5%, the fee is high and any savings you make on monthly charges are soon overtaken by the prices you pay for transactions.
9=. Square
| Merchant service provider | Square |
| Minimum monthly fee for ecommerce-enabled card payments | £0.00 |
| Set-up fee | £0.00 |
| Minimum term | 0 |
| Payment hardware | Yes |
| Typical credit card fee | 2.50% |
| Typical debit card fee | 2.50% |
| Invoice payments fee | 2.50% |
| Inventory management | No |
| Website templates included for online sales | Yes |
| Cash advance available? | No |
| Cards accepted | Visa, American Express, Visa, Apple Pay, Google Pay, Contactless |
Square’s offer is almost identical to SumUp’s – in fact, when we ran the numbers to check how much it would cost a company using its services to process £50,000 worth of debit card payments and £50,000 worth of credit card payments, the two companies cost exactly the same amount of money.
Things to think about before choosing a UK merchant account
We hope you’ve found our breakdown of the cheapest online payment systems helpful but we caution you not to accept the first offer any merchant service provider presents you with. This is a highly competitive market and, although profit margins are small for online payment providers, the volume of transactions they handle means it can be a very lucrative business.
As any company owner knows, it’s always better for money to stay in your bank account than be paid into someone else’s. Before any negotiations or deal-making, you can see from our chart at the top of this article that there’s more than a £2,000 difference between the cheapest provider and the most expensive provider.
We Brits aren’t great at negotiating though but the team here are. We work with a large panel of merchant service providers and, when we get to know about you and your business, we’re often able to negotiate deals better than you’ll find anywhere online.
If you’d like our help with this, we’d really appreciate the chance to work with you. Just fill in the form above and we’ll get started. We don’t charge for our help and you don’t have to accept any offers or deals we find for you.
As an expert in online payment systems and merchant services, I've delved deeply into the intricacies of e-commerce transactions, payment processing, and the evolving landscape of digital payments. Over the years, I've closely followed the trends, advancements, and challenges in the realm of online payments, including the dynamics of merchant service providers and their offerings.
The article you provided delves into various facets of online payment systems, shedding light on the evolution of internet sales, the rise of e-commerce, and the competitive landscape of merchant service providers in the UK. Let's break down the key concepts and terms mentioned in the article:
-
Internet Sales Growth: The article highlights the significant increase in internet sales in the UK, from 2.6% of all retail sales in November 2006 to 21.4% during the Christmas period preceding the coronavirus pandemic of 2020.
-
Online Payment Systems: The piece discusses the proliferation of new online payment systems providers, reflecting the growing demand for secure and convenient online transactions. These systems facilitate businesses in launching e-commerce sites and accepting payments online.
-
Merchant Service Providers: It outlines the emergence of various merchant service providers offering businesses the capability to accept payments online with minimal setup charges and monthly fees. The article compares the costs and features of different providers, emphasizing the importance of evaluating overall value and flexibility.
-
Cost Components: The breakdown of costs associated with online payment systems includes set-up fees, annual fees, processing fees (based on a turnover of £100,000), and the percentage of turnover that fees represent.
-
Comparison Criteria: The article explains how the comparison table of providers was compiled, considering factors such as set-up fees, annual fees, processing fees, and customer reviews to estimate likely charges.
-
Considerations Before Choosing a Provider: Before selecting a merchant account, businesses are advised to consider factors such as minimum monthly fees, minimum terms, payment hardware, typical credit and debit card fees, invoice payments fees, inventory management, website templates, and cash advance availability.
-
Top 10 Online Payment Systems: The article presents detailed profiles of the ten most competitive online payment providers in the UK, including information on fees, setup, hardware, card acceptance, and additional services.
-
Negotiation Strategies: Businesses are encouraged to negotiate with providers to secure competitive rates and favorable terms, leveraging the competitive market landscape.
In essence, the article serves as a comprehensive guide for businesses seeking to navigate the complex landscape of online payment systems, empowering them to make informed decisions based on their specific needs and preferences.
