There are many credit card processing companies offering a range of credit card processing services. How do you ensure you choose the best credit card processing service for your small business?
What are credit card processors?
Credit card processors are companies that process the transaction between two parties, most usually a merchant and their customer. They effectively relay the right information from the credit card to the business owner’s account.
Selecting from different card processing services, including understanding international merchant services credit card processing, can seem complicated. However, understanding the top credit card processors is the purpose of this article, and we will guide you through the process of selecting credit card processing merchant services.
In a nutshell, you will need to consider the types of payment a credit card processing service accepts, the relevant fees, and the transaction platforms that can be used.
How credit card processing works
When considering how your small business can accept credit card payments, and when you begin to compare credit card processing companies, you first need to understand how credit card processing work. You will be familiar with some of the process simply from having been a customer on the other side of the till, but let us explain in more detail.
The following process takes a matter of seconds.
Firstly the customer presents their credit card for payment. This will be linked to their bank account – known as the issuing bank. Using the card reader machine – either using chip and PIN, or swipe, or contactless technology – data is then ‘processed’ to enable a transaction to take place. The transaction information – value of transaction, for example – is sent via credit card processing services to the issuing bank for approval. Authorisation is returned through the merchant services credit card processing, showing up on your terminal. The first step is complete.
However, it’s not just authorisation that needs to happen as part of merchant credit card processing services. The next stage is settlement. Your merchant account will be held with an acquiring, or merchant, bank. The merchant bank is then responsible for receiving the settlement in to your merchant account. From here, it will then be moved in to your business account minus the fees for card processing services.
This can be understood more clearly by looking at the flow in our ‘how credit card processing works’ diagram.
How can my small business accept credit card payments?
Many small businesses want to be able to accept credit card payments so that they have a competitive advantage, can offer customers what they expect in terms of payment processing, and can ensure greater security of transactions. To do so you will need to use credit card payment processing companies.
There are two aspects you are going to need to understand: the merchant account, and the card payment technology. Many merchant processing companies will provide both the merchant account and the card processing machine.
Firstly, you will need to set up a merchant account with a credit card processor. This will either be through your bank, through another financial institution, or through a dedicated credit card processor such as WorldPay. Different merchant accounts offer different services, so choose wisely.
Next, you will need the credit card payment machine. This will usually come as part of a package with your merchant account. Alternatively you may need to purchase it or hire it separately. The number and type of devices you need will depend on the nature of your business.
You will then be ready to accept credit card payments.
How do I set up credit card processing for business?
There are a range of different ways to set up credit card processing, depending on what you need and what you are looking for. You will need to compare credit card processing companies and credit card processing providers so that you can be sure you get the best credit card processor for your small business.
You will need to consider factors such as whether you need to look at mobile credit card processors, or whether your card payment transactions will be happening at a fixed point. The cheapest credit card processor therefore may not be the one with the lowest fees, as you need to consider what your business needs.
Once you have selected your credit card processing service there will be an application process. This may include set-up fees, and differs according to different credit card processing merchant servicesp
How do I pick the best credit card processing company?
Choosing the best card processing services, and the right credit card processor, will depend on various different factors which are unique to your business. Therefore, the best credit card processing provider for your small business may be different from the one needed by a large scale operation.
Credit card processing companies that are suitable for small businesses need to be chosen based on credit card processors reviews, and their suitability for your business niche. For example, a café, deli or restaurant may need to select a mobile credit card processor.
Different merchant credit card processing companies offer different benefits for different businesses. Narrowing the selection down can be difficult and so we have created a list of the top 5 credit card processors for small businesses in the UK.
Top 5 credit card processors for small businesses
First Data offer a range of credit card processing solutions depending on your type of business. This means they are a great choice for small businesses, whatever their nature and requirements. With over 20 years of experience in the UK they are the first choice for many and should always be considered when you compare credit card processing companies.
First Data is a credit card processor who allows you to accept both credit and debit cards, from all major providers. They offer a secure processing system which works quickly and efficiently. Inbuilt is an online reporting function giving you insight in to your business, allowing you to grow. Support is on hand, including dispute resolution, and fraud prevention tools.First Data offer credit card processing services for a range of businesses including traditional shop-based retail, portable services for restaurants, and specific offerings for those operating in ecommerce or telephone sales. First Data credit card processing customer service is considered some of the best in the industry.
Worldpay offer a range of flexible solutions, meaning there are plenty of options for different business types. They offer a broad range of credit card payment machines including countertop, portable and mobile, and these link to their credit card processing services. These services are offered in three different ways: pay as you go, fixed monthly, and standard.Worldpay ‘pay as you go’ is an ideal starting point for many small businesses looking to accept credit card payments. It’s a low commitment option with straightforward transaction fees and no monthly commitment.
If you’re certain of more transactions then you may prefer to look at either the fixed or standard Worldpay options. The fixed arrangement is ideal for those with regular and consistent payments and includes your terminal rental. The standard option is more suited for those with variable monthly transactions volumes who want a customised plan. Fees are then based on volume.
With over 25 years of experience, and dedicated UK customer support, it is worth considering Payzone. They also offer a detailed range of options which means you can choose the right one for the nature of your business.Payzone only have a short 12 month contract period, with no set-up or exit fees, making them highly attractive to many small UK businesses. Their customer support is excellent including replacements when needed. Their systems are suitable for payment in person with a card reader, or over the phone, or internet.
Handepay have been developed with small businesses in mind. They aim to offer low cost, well-supported merchant services and credit card processing. There is no minimum monthly service charge, making them ideal for small businesses with variable monthly sales volumes. Furthermore, there are no authorisation fees or premiums for ‘card not present’ transactions, just simple to understand transaction fees.
Some credit card processing companies have high joining fees making them difficult to access for small businesses. Handepay has no joining fees, meaning small businesses can get started with accepting credit card payments quickly.If you are already signed up with a credit card processing company, Handepay can help you switch to them, simplifying the process.
Paymentsense is used by over 50,000 small businesses in the UK and are well reviewed on Trust Pilot. Compared to other credit card processors, they have a very fast setup time, normally having you up and running to take credit card payments within 3 days.
Paymentsense have some of the lowest credit card processing fees available, and are backed up with 24/7 support dedicated to the UK. They focus on efficiency and security. They also offer capped rates which is ideal for many small businesses.Paymentsense are suitable for a range of business types, and have solutions for ecommerce, phone payments, mobile payments, in-store and more.
Types of credit card processing
There are different types of credit card processing. Understanding these is important for choosing the right one for you.
- High-risk credit card processing: high risk credit card processors take on those merchant accounts that most processors steer clear of. Those merchant accounts might be deemed high risk because of poor credit ratings, or due to the nature of the business they are operating in. These business niches vary, but can include credit repair services, multi-level marketing, travel, and dating services.
- High-volume credit card processing: the volume of transactions you need to process will differ from business to business. Generally speaking, the higher the volume of credit card processing, the lower the fees you will pay.
- Low-volume credit card processing: smaller businesses will have a much smaller volume of credit card processing than larger ones. This means you need to choose a credit card processor who specialises in small business and has the appropriate fee structure for you. This may mean higher transaction fees but lower set-up fees and no monthly minimum charges.
- Mobile credit card processing: Mobile credit card processing is essential when you need to be able to process transactions away from a fixed POS system. This will be important if you need to take payment in multiple places, for example if you work in construction, or events. These systems are much the same as other processing options, but they operate using GPS and mobile connections.
- Online credit card processing: credit card processing is also necessary when operating in ecommerce or telephone sales. Many credit card processors offer specific online payment packages to suit your business which differ from the ‘in-person’ methods.