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What is a Merchant
Account?
A merchant account is an agreement between a merchant (you) and an acquiring bank.
This allows the merchant to accept and process electronic payments via credit and debit cards.
If your card machine accepts contactless payments then you will also be able to accept and process payments from phones and other smart devices.
Search and see if you could save on the very best merchant account, simply complete our 2-minute form by clicking the "Start Free Quote" button below.
We look forward to helping you.
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1. Answer a few quick questions.
Complete our simple assessment form (takes less than 2 minutes).
2. Receive your quote.
We search services from the UK's leading merchant account providers (all for free and with no obligation).
3. Compare providers.
Compare a range of quotes and see how much you could save.
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Is a Merchant Account a Bank Account?
Although a merchant account is a bank account it isn't a conventional one and is only available to businesses.
Think of it as a secure holding pen where the funds sit whilst the customer has their bank account checked to make sure that they have enough money to pay for the transaction.
Once this is all confirmed, the merchant account receives the money and then forwards it to your bank account.
Do I Need a Merchant Account?
All modern businesses should be equipped with a merchant account if they want to be successful.
Debit cards have become more popular in recent years, with many people now choosing them as their preferred way to pay. If you want to offer your customers what they want, you need to be able to offer card payments.
So in a nutshell, yes, you need a merchant account.
How Does a Merchant Account Work?
Your customer uses their credit/debit card at your specific terminal. This can be physically at your premises or with a payment gateway online.
The details of the transaction are then passed to the customer's card via your specific merchant account provider.
The card issuer then checks the details of the payment and either approves or rejects the transaction.
Once the card issuer approves the transaction, the merchant account begins the transfer into your account.
Things to Consider When Choosing a Merchant Account Provider
Although the process of how a merchant account works is fairly straightforward, there are a few things that you will want to consider when choosing your provider and if they're the best choice for your business.
Fees
This will be how much you will pay your merchant account provider to use their service.
There is a more in-depth look at the different types of fees available later on, which can be found here.
Contract Length
Some people like having longer contracts so they don't have to worry about constantly renewing them and as the old mantra goes, 'if it ain't broken, don't fix it.'
Others however prefer shorter-term deals where it could be possible to switch providers on a semi-regular basis and potentially get a better deal.
Customer Service
If there are technical issues how quickly will they be resolved and will you be compensated for any downtime?
If you've been underpaid how quickly can you get the money into your account?
If you need to speak to someone directly, are they easily contactable and are they based in the UK?
You may have thought you had found your ideal provider but if their customer service is terrible then it may be worth finding someone else.
Hidden Fees
Everything may seem perfect on paper but then all of a sudden you're faced with hidden fees that don't make that great deal seem so appealing anymore.
Common hidden fees include things such as set up & exit fees or terminal rental costs that may not be stated in the initial chats with providers.
Ease Of Use
You want things to be as easy as possible and don't want to waste your time figuring out an overly complicated card reader.
Sometimes you just need an app on your phone and a card reader and you're ready to start taking payments.
How Much Does a Merchant Account Cost?
There is no one set answer to this question as there are many factors that come into play.
Sometimes you may get more favourable rates if you are a larger business and process more payments.
The most prevalent factor however is the type of pricing model you decide to select. Below is a brief description of these models:
Inter-charge plus
Also known as cost-plus pricing or pass-through pricing.
This breaks pricing down into two elements:
| The interchange | The cost from the issuing bank to you via your merchant account provider. |
|---|---|
| The plus | The fees your Merchant Account provider charges. |
If the issuing bank changes its rates then your inter-charge plus costs will also change to reflect the increase or decrease of the rates.
Payment processing by membership
Charges a flat rate for payment processing each month instead of by transaction.
Think of it as bulk buying at a wholesale price instead of buying items individually at retail price.
For some businesses, this could be the most cost-effective pricing, but for others, it may not so this is something worth taking into account when selecting a provider.
Flat rate pricing
Your rates are charged at a percentage of each transaction you make or the cost of said transaction.
Some may charge you a flat rate regardless of the cost & what card is used whilst others may have varying rates.
How Can I Get a Merchant Account?
As we've said a merchant account is essential to any business looking to be a success in the modern day and you might be asking yourself how you can get one for yourself.
Luckily it couldn't be easier. All you have to do is click "Start Free Quote" below, answer a few questions about your business and you'll receive a selection of quotes from some of the country's leading providers.
Which provider you think is best for your business is entirely up to you.