The Best Merchant Account Solutions for UK Startups

Wednesday, August 14th, 2019

Startups face lots of challenges when looking to get their feet off the ground. And one of the issues they have to deal with is how to start collecting payments from their would-be customers. The thought of a payment avenue is often accompanied by worries of how to acquire a merchant account.

It is not a walk in the park, especially for a newbie firm without enough financial records because most traditional merchant account issuers won’t accept them. And if they do, they’ll assign you a high-risk account and subject you to exorbitant fees for the first 1 to 2 years.

Fortunately, there are a bunch of account providers for UK startups to rely on. But each account issuer is unique in its service offerings and specializations. No one remedy fits all businesses, so you must research to discover the best solution for your business.

Startups generally need easy-to-understand services, uncomplicated fee plans, and pocket-friendly costs. Here are some of the top options in the United Kingdom.

PayPal

Payflow, PayPal’s payment gateway, and card terminals allow micro-business and startups to set up face-to-face sales. They do not scrutinize credit, do business reviews, or charge any signup fees. PayPal is affordable and processes payments in 1-3 days.

The world-known service provider has terminals known as ‘PayPal Here’ that a startup can purchase anywhere between £15 and £75. You’ll also need to pay £20 per month on monthly charges if you are going to use a terminal.

Merchants who plan to make online sales should not force customers to sign in to PayPal. Instead, they can use PayPal’s merchant account free-of-charge.

With PayPal, merchants begin by paying high transaction charges of 3.4% + 20p. However, this rate drops over time with an increase in income.

Stripe

Stripe is a reputable online payment gateway for micro-businesses and startups. It has rates from 1.4% + 20p. But it has no credit card hardware and tech to allow face-to-face payments, yet it is among the cheapest gateway solutions for a newbie.

With Stripe, you also enjoy free-of-charge online reporting, accept the various European payment avenues, and get hassle-free integration to many major shopping carts.

Square

Square is a long-standing and major account and merchant services provider for micro-business in the UK.

The company charges 2.5% for both keyed and online payments and 1.75% both for chip and contactless transactions. A startup will need to pay £59 to acquire the Square credit card machine.

For newbies looking for cost-effective solutions, Square is ideal because it charges no other fees beyond those mentioned above.

IZettle

IZettle is a startup merchant account and card terminal vendor for face-to-face transactions.

But iZettle has no payment gateway, so it does not offer services to ecommerce merchants. However, the service offers a credit card terminal for as low as £59 and charges flat rates of 2.5% for online invoicing and 1.75% for credit cards.

IZettle’s standard account is free (without extra charges), but for £20/month, a startup can subscribe for add-on upgraded tools and get reliable support.

Final words

A startup can choose from the above list of service providers based on their unique needs. Getting a merchant account and card terminal solution should no longer be a problem in the UK.