Payment processors for small businesses

Now that your firm is ready to accept payments, it’s time to consider your payment processing strategy. Alternatively, you may choose to alter your existing payment method. Which payment processors are the best for you and your business?

While payment processors perform essentially the same functions, it’s possible that a single feature – or the cost – can influence your ultimate selection.

Understanding what is available can assist you in getting started, which is why we’ve produced a list of the most well-recognized systems. However, let us begin with a brief definition.

What is the definition of a payment processor?

A payment processor is a third-party payment system that facilitates funds transfer between your customer’s and your business’s bank accounts. Additionally, payment processors may approve transactions and ensure that merchants are paid within a certain period.

The phrase is often used synonymously with payment gateway, a mechanism for authorizing payments. Because many businesses combine payment processors and payment gateways into a single offering, it is more often referred to as a payment gateway.

What kind of payment processor should I use?

Let’s evaluate some of the top payment processors on the market, concentrating on their cost, advantages, disadvantages, and the types of payments best suited to the system.

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

This account is subject to transaction authorization costs, with premium transactions incurring greater fees. Additionally, it includes an 18-month terminal rental agreement with a monthly terminal rental price starting at £17.95 and a variable transaction rate dependent on your company volume. A monthly service charge of at least £15 each month. Additionally, there is a PCI maintenance cost to consider.

Additionally, the deal includes a three-month trial subscription. Following that, membership is £4.99 each month.

A combination of monthly fees and transaction fees that vary according to company volume and card profile

A desktop, mobile, or portable payment terminal is available.

Pros: WorldPay collaborates with card issuers worldwide (in 116 currencies) and offers 24-hour customer service in the United Kingdom.

Cons: This payment processing solution may become rather costly when monthly and per-transaction costs are included. According to some reviews, there might be a delay in paying small company owners and a lack of product transparency and aggressive sales practices. Worldpay got 51% ‘poor’ (one-star) ratings on Trustpilot at the time of this update.

Most suitable for: Medium-sized enterprises with constant transaction volumes throughout the year or more established organizations with greater transaction volumes and more complicated requirements.

What is it, Zettle?

Zettle

What is it? Zettle by PayPal (formerly iZettle) is an e-commerce platform that includes a point of sale, a card reader, invoicing, and an eCommerce site. With real-time sales statistics, you can manage your inventory, send abandoned cart emails, and have a better understanding of your performance. It can generate sales statistics, manage inventories, and track employee 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 solutions are available year-round for companies that process more than £10,000 in card payments per month. To learn more, complete the online form.

Pros: There is no commitment with this money processing software, and it integrates with Xero and Shopify. Additionally, it is compatible with iOS and Android devices and accepts Samsung, Google, and Apple Pay. It has an attractive look, and deposits are made to your bank account within one to two business days.

Cons: The only phone assistance is offered Monday through Friday from 9 a.m. to 5 p.m.

Best for: Multi-platform food and beverage, retail, health and beauty, and service-based enterprises.

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 a simple-to-use payment gateway with a rapid start-up time and a free magstripe reader that takes foreign credit cards. Additionally, invoicing and a virtual terminal are offered. Integrate Xero with Excel for accounting and choose the next business day payment.

Cons: According to Trustpilot reviews, customer service is inadequate, and the Square is not compatible with all devices.

Best for: Small firms with inconsistent revenues that need a rapid start.

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

If your firm has a high payment volume or special business demands, you may create a bespoke plan. Calculate it using volume discounts, interchange pricing, discounts for multiple products, and country-specific prices.

Pros: It is simple to use, with customized payment plans for memberships and subscriptions, as well as two-day rolling bank transfers that may be scheduled weekly or monthly depending on when you wish to be paid. Stripe also integrates with the mobile app, supports over 135 different currencies, and the payment procedure is completely frictionless since users do not need a Stripe account to pay. Additionally, there are no startup costs, monthly fees, or hidden expenses to be concerned about.

Cons: The chargeback policy may annoy. Any contested transactions will incur a £15 fee, which will be repaid only if the customer’s bank settles the case. Stripe also retains merchant funds for a longer period to safeguard them from fraud, although it is still much longer than rivals.

Best for: Online companies 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’s contract period is shorter than that of some other providers, at 12 months, and you may construct a branded client payment gateway.

Cons: Costs might pile up quickly if you exceed the monthly transaction limit of 350.

Best for: Businesses seeking competitive prices.

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 benefits significantly from its brand awareness — a large percentage of the population has an Amazon account. While shopping is fast and simple for users who are already signed in, you can add a “purchase now” button to your site to make buying even simpler. Additionally, it is highly secure, protects merchants, and interacts with Shopify and BigCommerce.

Cons: Amazon Pay can be a lucrative target for scammers. Your account may be terminated without notice for security concerns, there is no PayPal assistance, and the transaction cost is rather expensive.

Best for: E-commerce enterprises.

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 get started with Shopify Payments immediately and test it out for 14 days for free. Your consumers may continue to pay using another method if they wish. Using Shopify Payments, on the other hand, eliminates additional transaction costs.

Cons: Shopify charges £10 each chargeback, and, like Stripe, you forfeit the cost if the verdict is not in your favor. Your merchant account may be locked to investigate chargeback issues or unusual account behavior.

Best for: E-commerce enterprises.

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 product has a lower set transaction price than rivals and no monthly fee. Additionally, it has a paperless onboarding process and no contractual responsibilities. The Air supports up to 500 transactions per charge, and the 3G supports limitless mobile data and WiFi access.

Cons: There is no phone assistance available on weekends or late nights, and multiple complaints about bad customer service have been made on their social media feeds.

Best for: Mobile companies such as freelance beauticians or food trailers.

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 does not charge a monthly fee and does not charge for setup, integration, or closure.

Cons: Because of the fees it levy, it is too costly for enterprises with modest sales volumes. Additionally, it is detrimental to high-risk merchants (those that get a large volume of chargebacks) since you are more likely to be blacklisted. The system is not intended for brand-new businesses — you must do a minimum of 1,000 transactions every month to maintain good status.

Best 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 accepts payments in 97 percent of the world’s nations and is simple to use.

Cons: Higher sales volumes result in increased fees, and it is only accessible on a long-term contract. Additionally, you will be unable to access more than six months old transactions.

Best for: Established small businesses with 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: There are no hidden costs, 24/7 telephone assistance is accessible, the service is simple to set up, and the customer service rating on Trustpilot is excellent.

Cons: Opayo is more costly than Sage Pay was.

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