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

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What's the best payment system for your small business? 11 of the best payment processors for UK SMEs reviewed

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. 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 your pick of countertop card machines, portable card machines, mobile card machines and Pax 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 has two packages:

Fixed monthly

This package has a 18-month terminal hire agreement. It has a minimum monthly package fee of £49.99 including transactions up to a set threshold and authorisation fees. Full membership trial period of three months free followed by £4.99 a month.

It has:

  • Fixed monthly income
  • Transactional fees
  • Terminal rental fee
  • Choice of desktop, portable or mobile terminal
  • PCI Management fee

Custom

Transaction authorisation fees apply on this account while premium transactions incur higher fees. It also has an 18-month terminal hire agreement with a monthly terminal hire fee from £17.95 and variable transaction rate based on your business volumes. Minimum monthly service charge fee of £15 per month. You’ve also got a PCI management fee to consider.

The package also has full trial membership of three months. After that the membership fee is £4.99 a month.

  • A mix of regular monthly fees and varying transaction charges based on business volume and card profile
  • A choice of desktop, mobile or portable payment terminal

Pros: WorldPay works with card providers around the world (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 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. At the time of update, Worldpay had 51 per cent ‘bad’ (one star) reviews on Trustpilot.

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

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?
Go (no monthly fee)
Invoice transactions: 2.5 per cent
Card transaction fee: 1.75 per cent
Payment link transactions: 2.5 per cent
PayPal QR code transactions: 1 per cent

Custom packages are available for businesses who take over £10,000 in card payments per month all year round. Fill in the online form to find out more.

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 and you get deposits to your bank account in one-two business days.

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.

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: 1.75 per cent
Card-not-present transactions including keyed-in transactions, card payments over the phone with Virtual Terminal, Square Invoices and eCommerce: 2.5 per cent
Online payments with European cards: 1.9 per cent
Online payments with non-European cards: 2.9 per cent

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: Reviews on Trustpilot reveal that customer service is lacking and that the Square isn’t compatible with all handsets.

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: 1.4 per cent + 20p
Non-European cards: 2.9 per cent + 20p

Currency conversion: 1 per cent

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, 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 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 £15 for any disputed transactions and only refunded if the customer’s bank resolves the dispute. Stripe also holds onto merchant money for longer to protect them from fraud but it’s still longer than competitors.

Best for: Online businesses with access to a developer.

Cardstream

What is it? Cardstream is independent of acquiring banks and has hundreds of reseller partners.

How much does it cost?

  • £18/month subscription fee
  • 350 free transactions per month
  • 9p per additional transaction

Pros: Cardstream doesn’t have as long a contract length as some of the other providers at 12 months and you can create a customised customer payment gateway with your company branding.

Cons: Costs can add up if you go over the 350 monthly transaction limit.

Best for: Businesses looking for competitive pricing.

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 (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: 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 2 per cent on Basic, 1 per cent on Shopify and 0.5 per cent on Advanced.

Basic Shopify

Monthly cost: $29 (£21)
Online credit card transaction fees: 2.2 per cent +20p
In-person credit card fees: 1.7 per cent

Shopify

Monthly cost: $79 (£57)
Online credit card transaction fees: 1.9 per cent + 20p
In-person credit card fees: 1.6 per cent

Advanced Shopify 

Monthly cost: $299 (£217)
Online credit card transaction fees: 1.6 per cent + 20p
In-person credit card fees: 1.5 per cent

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 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 card readers that can be used on-site or on the go.

How much does it cost?

Transaction fee: 1.69 per cent
Fee for card-not-present payments: 2.5 per cent
Cost for the reader: Air £29, SumUp Air and cradle £39, SumUp Solo £99, SumUp 3G and printer £149

Pros: SumUp’s offering has a fixed transaction rate which is lower than its competitors and no monthly fee. 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 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.

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 €0.10, an acquirer fee of €0.60 and a payment method fee for every transaction.

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.

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

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 happier customers and a lower likelihood of abandoned carts.

How much does it cost?

You must contact Cybersource directly to find out pricing.

Pros: Cybersource has payment acceptance in 97 per cent of countries in the world and it’s easy to use.

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.

Best for: More established small business who have developers.

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?

Sage Pay has three pricing plans

Flex – from £25 per month

350 transactions
Free fraud screening tools
24/7 telephone and email support eInvoice and phone payments included
Virtual terminal included
No fee for refunds

Plus – £45 per month

American Express SafeKey fraud prevention
Access to Fast-Pass support
Accept a range of local European Payment types
From 9p a transaction above 350 transactions

Corporate – bespoke pricing

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

Pros: No hidden fees, 24/7 telephone support available, quick to set up, strong customer service reviews on Trustpilot.

Cons: Opayo is more expensive than Sage Pay was.

Best for: Small businesses who want to go with a trusted name. 

Further reading on payments

Five tips to get started taking card payments