UK Merchant Accounts Comparison: Our 2024 Guide

Merchant accounts are essential if you want to take card payments cheaply. They act as a sort of holding pen for your customers’ money while the transaction is being approved, keeping it safe before it gets transferred to your business bank account.

We recently researched and tested 18 merchant accounts, and found that takepayments is the best on the market. Its custom pricing and credit card machines designed for small businesses make it one of the most effective services for tracking and taking payments.

It won’t suit everyone of course. Some businesses will prefer a provider with transparent pricing, like Tide. And with fees and contract lengths varying from provider to provider, it can be hard to find the right fit. That’s why we’ve created this comparison guide to help you understand the different options available to businesses in 2024.

In this article, we’re going to cover two different kinds of merchant accounts:

1. Contract-based merchant accounts – available on fixed-term agreements, they generally charge cheaper transaction fees alongside a monthly fee.
2. Zero-contract merchant accounts – available on a pay-as-you-use basis with no contracts, they generally charge more expensive transaction fees but no monthly fees.

If you’d like personalised recommendations and tailored prices, get started by answering the question below:

The Best Contract-based Merchant Accounts

Contract-based merchant accounts offer their service through fixed-term agreements. They tend to charge low (and usually negotiable) transaction fees in exchange for a monthly fee. By and large, they also lease their card machines instead of selling them to you.

Here’s a quick overview of the best contract-based merchant accounts, and the fees they charge:

1. takepayments

takepayments is one of the best merchant account providers for getting cheap transaction rates, thanks to its flexible, custom pricing structure. Choosing takepayments will also give you access to a quality card machine that doubles as a mini EPOS device.

Why we recommend takepayments

takepayments’ pricing is bespoke and tailored to your business’s budget. This can work in your favour if you process a lot of card payments each month since you’re likely to get highly competitive rates of under 1% per transaction for standard UK cards.

This provider also has some excellent reporting tools. From your account, you’ll be able to track inventory in real time, create customised categories, track employee sales, and even do accounting.

In terms of hardware, takepayments’ crowning glory is its proprietary takepaymentsplus card machine. Essentially functioning as a mini EPOS device, you can add new products with prices, and make adjustments directly from the card machine, without having to log into the backend on your desktop. We tested it, and found it extremely ergonomic, despite its size. It was also highly intuitive to use on the first try, so you should be up and running with it in no time.

Reasons to avoid takepayments and top alternatives

takepayments is a little old-fashioned, as merchant account providers go. It doesn’t have an app you can access the backend from, and as such, doesn’t have a function for accepting payments directly from your smartphone. If that’s what you’re looking for, providers that offer both include Tyl by Natwest, and Tide.

Like most contract-based merchant account providers, takepayments also doesn’t sell its card machines outright but instead charges a monthly licensing fee. This can add up over time, so if you want a provider you can purchase equipment from, we suggest Clover or Tide.

2. Worldpay

Worldpay is one of the biggest payment solutions providers on the market, and is a great option for high-volume businesses, thanks to its custom transaction rates and low minimum spend charges.

Why we recommend Worldpay

Worldpay offers bespoke transaction fees for businesses with over £75,000 a year in card turnover, which can get as low as 0.75%, well below the UK average of 1.75%. It also offers fixed-rate fees of 1.5% for businesses with under £50,000 a year in turnover, which are still below the national average.

Besides that deal for businesses processing over £75K each year, Worldpay also allows you to calculate expected transaction fees using its Pricing Calculator.

Below, we’ve calculated the fees you can expect for Visa / Mastercard usage for a retail business with an average transaction value of £20 so you don’t have to.

Illustrative prices checked via the Worldpay website for turnover between £50,000 and £1,000,000 turnover and correct as of 28/11/2024

The reason we recommend Worldpay more for high-volume merchants over low-volume merchants is mainly because of the size of this provider, and the fact that, unlike takepayments, it specialises in serving large businesses, meaning it can support your business as it grows. takepayments, on the other hand, advertises itself as a solution for small businesses.

Examples of services suited to growing businesses are Worldpay’s proprietary advanced fraud prevention features. which are all the more essential when you’re processing a large volume of transactions. We’d recommend Wordpay’s FraudSight, which uses the latest technology to predict fraudulent transactions before they occur.

Worldpay’s software also integrates with a large amount of third-party software, including popular EPOS systems like Epos Now, making it easy to use Worldpay’s card processing services alongside the rest of your merchant toolkit.

Reasons to avoid Worldpay and top alternatives

Worldpay isn’t the best solution for businesses with low card turnover. Its starting 1.5% transaction fee is still below the national average, but you can get cheaper fixed fees of 1.39% +5p with Tyl by Natwest, which has a plan specifically designed for new businesses, or ones with low turnover. Its card machine licensing fees also start at £9.99 per monthly, almost half the price of Worldpay’s starting £17.50 per month fee.

Worldpay also has one of the longest contracts we’ve seen, with an 18-month minimum. 12-month contracts are quickly becoming the standard for contract-based merchant account providers and are the length of both takepayments and Tyl by Natwest. You can also opt for a zero-contract option for maximum flexibility, like Clover, Barclaycard, or Tide.

3. Tyl by Natwest

Tyl by Natwest is a great merchant account provider for businesses that already bank with Natwest, since they’ll already be familiar with how it operates. It also offers the cheapest fixed rates, making it an affordable option for new or small businesses.

Why we recommend Tyl by Natwest

Tyl by Natwest is an affordable way to start taking card payments, with its cheapest card machine costing just £9.99 per month, much less than takepayments’ £25 per month and Worldpay’s £17.50.

It also has low fixed transaction fees, at just 1.39% + 5p for personal UK and European. These fees apply to both in-person and card-not-present transactions, like ones made over the phone or online, which is a rarity. Card-not-present fees at fixed rates are often over 2%, as is the case with SumUp, which charges 2.5%.

Tyl by Natwest also offers custom fees to businesses with over £50,000 in annual card transaction turnover, which is a lower threshold than Worldpay’s £75,000, and doesn’t charge any monthly service fees.

It offers a wide range of card machines, from portable card machines, to mobile readers, to countertop devices, and has an app that enables tap to pay with iPhone and Android, which eliminates hardware licensing fees. Most of Tyl’s card machines also have an offline mode that stores payments for up to seven days, which is very useful for businesses taking payments on the go.

Reasons to avoid Tyl by Natwest and top alternatives

Getting a Tyl by Natwest merchant account requires you to get a Natwest business bank account. So, if you don’t already bank with Natwest, and aren’t looking to switch, it’s not the provider for you. Clover offers more flexibility on this front, allowing you to work with the bank of your choice.

Tyl by Natwest’s reporting tools are also a little lacking, limited to end-of-day reports. So, if you want more insight into your data, we’d suggest takepayments or Worldpay.

The Best Zero-Contract Merchant Account Providers in 2024

Zero-contract merchant accounts don’t require you to sign a fixed-term contract, providing their service on a pay-as-you-use basis. While they don’t incur fixed monthly costs, they typically charge high transaction fees. And, unlike their contract-based counterparts, they usually sell their card machines outright.

Here’s a quick overview of the best zero-contract merchant accounts’ fees and charges:

1. Clover

Clover is a zero-contract payment services provider that also specialises in EPOS systems, and is a great option for businesses seeking sleek hardware and competitively custom transaction fees.

Why we recommend Clover

Clover is a great merchant account provider for businesses that are also interested in using its excellent EPOS system, which we rated one of the best EPOS systems in the UK.

What you’ll get in return for using Clover as a payment services provider are custom transaction fees, that can go as low as 0.2% if you process a high volume of transactions. Plus, Clover provides support to businesses switching to them from another provider, offering up to £1,000 cashback to cover cancellation costs.

On the hardware side, Clover has a card machine that doubles as a mini EPOS system, the Clover Flex. It’s got a built-in receipt printer and barcode scanner, and a large touchscreen, which we appreciated when we were testing it since it made it easier to input information. Clover also offers three different countertop EPOS terminals, which you can use alongside, or instead of its card machine, since they all have built-in card readers. All of its hardware has a polished, modern appearance, which is right at home in any trendy or upscale business.

Reasons to avoid Clover and top alternatives

Clover doesn’t have an app that enables tap to pay on a smartphone, and its hardware options are generally more geared towards fixed businesses, like restaurants or stores, rather than on-the-go ones. Its card machine for example, while mobile, is quite bulky.

Tide or Barclaycard are good alternatives, since Tide has tap-to-pay on iPhone, and Barclaycard has a compact mobile card reader specifically designed for mobile businesses.

Clover is also quite secretive about its pricing, which is unusual for a zero-contract provider, so you won’t know how much it’ll cost you until you’ve got a contract proposal in front of you. If you want a provider with clear pricing, we suggest Tyl, Tide, or Barclaycard.

2. Barclaycard

Barclaycard’s pay-as-you-go card reader and payment processing services are a great option for businesses that already bank with Barclays and are looking for a no-strings-attached way to take payments.

Why we like Barclaycard

Barclaycard, while offering contract-based services, also has an attractive zero-contract pay-as-you-go deal. With the deal, businesses get a mobile card machine for a one-off fee of £29 + VAT, and pay transaction fees of 1.6% (although variable fees for high-volume or high-value transactions are available upon discussion). This allows you to start selling for minimal upfront costs, and no monthly fee – all you pay are transaction fees.

The mobile card reader that comes with the pay as you go deal has a pin-pad and LED screen and needs to be used with the Barclaycard app to process payments. You can also categorise and log products on the app, to make taking payments easier.

Barclaycard also has 24/7 fraud monitoring, which means that suspicious transactions are flagged as soon as they appear, keeping your business and customers safe.

Reasons to avoid Barclaycard and top alternatives

Signing up to a merchant account with Barclaycard requires you to have a Barclays business account. If you don’t already have one and don’t want to switch, we suggest you look at Clover, which allows you to choose the bank of your choice.

Barclaycard’s software also doesn’t work with other EPOS systems, although a Barclaycard account does come with basic EPOS functions like product categorisation. If your business needs a complete EPOS system, however, once again, Clover is the best option.

Lastly, Barclaycard card machines don’t have an offline function, so if you lose connectivity you won’t be able to take payments. If this is a concern for you, we suggest Tyl by Natwest, which logs offline payments for up to seven days.

3. Tide

Tide offers great reporting tools, allowing you to view transaction reports by employees, card types, or items. And, with no monthly fees and no contract, it’s an affordable way for small sellers to start taking payments quickly.

Why we like Tide

Tide offers fixed-rate transaction fees of 1.5%, which isn’t bad for a fixed rate, and matches Worldpay’s rate. However, unlike Worldpay, there are no additional monthly fees, and Tide sells its card machines outright, eliminating monthly licensing costs.

Tide offers two card machines, the Tide Reader for £89 + VAT and the Tide Reader Plus for £99 + VAT. Both come with lifetime 4G connectivity and can be used with the Tide app or as standalone card machines, giving businesses the flexibility to use them on the go.

The Tide Reader Plus is the best value option since it’s a mini EPOS device, where you can log products for quick checkout. For context, though £99 + VAT might sound expensive, Tide’s competitors offer similar models for much more, such as Square’s £149 + VAT Square Terminal. It also has a battery that can last the whole day on a single charge, giving it the longest battery life of any product we tested.

Reasons to avoid Tide and top alternatives

To take payments with Tide, you need to sign up for a Tide business bank account, if you don’t already have one. Tyl by Natwest and Barclaycard have the same policy, so Tide isn’t alone in this. But, if you want to stick with your existing bank, your best option is Clover.

Tide’s refund process is also quite tedious and long-winded, so we don’t recommend it to businesses that might need to process regular refunds, like clothing shops. During testing, we found that to process a refund, we had to first go into the payment app, instead of doing it directly on the card machine. We then had to engage in a chat, with a reply coming around three days later, to finalise the refund.

This took a lot of time and effort, so if you issue refunds, we suggest you go with takepayments, whose refund process can be done directly from the card machine and is much more straightforward.

Buying Guide: How to Choose a Merchant Account

When choosing a payment processor, you should consider your budget and the size of your business, as well as how well your card machine company suits your needs.

Zero-contract providers are a cheap way to take card payments for startups and very small businesses, but they can also work for businesses that process a moderate amount of card payments, or simply want to test out a merchant account without any obligations. Either way, providers such as Zettle can provide a great way to get started without a hefty initial investment or fixed monthly fees.

Contract-based merchant accounts are better for medium-sized or larger businesses which are more established. Companies this size are unlikely to have a problem with meeting monthly fees, but they’re still able to benefit from low transaction fees, effectively offsetting the fixed costs over time.

Reporting tools and third-party integrations should also be taken into account when choosing a merchant account and payment facilitator. These are particularly helpful to small business owners, as they can provide data that informs their growth plans.

And the great news is, these tools aren’t reserved for businesses that use contract-based providers like takepayments. Zero-contract options like Zettle and Square can provide you with similar reports and integration.

How We Test Merchant Account Providers