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The Cheapest Credit Card Processing Solutions

Last editedMar 20222 min read

You want to make your products and services available to as many customers as possible. As such, you know the importance of offering multiple payment methods. Customers want to be able to pay you in the way that is most reassuring and convenient for them.

That said, merchants also need to consider the costs associated with offering these payment methods. When it comes to processing credit card transactions, the fees that merchants encounter can vary significantly depending on the credit card processing solutions they choose.

Here, we’ll look at how SMEs like yours can minimise their overheads by choosing the right partner to process their credit card payments.

Read more about credit card processing fees in the UK

What are credit card processing solutions?

When it comes to accepting credit card payments, there are several charges that need to be borne in mind. There are:

  • Transaction fees (1-3% of each sale)

  • Authorisation fees (1-3p per sale)

  • Merchant service charges (usually around 0.25-0.35% for debit cards)

And that’s just for starters. While transaction fees and authorisation fees vary by credit card provider, merchant service charges vary depending on who provides your credit card processing solutions. These are the companies responsible for providing merchant services, enabling you to accept credit card payments and processing them on your behalf.

The cheapest credit card processing solutions

Merchant service providers may vary their fees depending on the size of your business and how many transactions it processes. Many will also have additional fees for add-ons like ensuring PCI compliance, or using a virtual terminal.

Here, we’ll look at some of the most cost-effective.

Worldpay

Worldpay is one of the biggest card payment processors out there, responsible for managing more than 40% of the UK’s credit and debit card transactions. They have a good reputation for providing effective and affordable payment gateways, virtual terminals and other solutions.

Charges are as follows:

  • 1% Credit Card Fees

  • 2% Debit Card Fees

  • 4p Authorisation Fee

  • £9.95 Monthly Minimum

Sum-Up

This German mobile payment provider is a big hit in the UK, processing more than 100,000 credit card transactions every day. It specialises in POS systems and virtual terminals.

Charges are as follows:

  • 1.69% Credit Transaction Fees

  • 2.95% +25p Virtual Terminal Fees

First Data

First Data has been around for more than 20 years and is very popular with UK SMEs. While it has some of the lowest fees, it also requires a lengthy 36-month contract.

Charges are as follows:

  • 10p Credit Card Fees

  • 1.25% Debit Card Fees

  • 2p Authorisation Fee

  • £5 Monthly Minimum

Is there a cheaper alternative to credit card processing?

Even with the right processing solutions, accepting credit card payments can be very expensive. The average credit card processing fees for merchants can be high, and some are uncapped. There are further fees involved if you want to accept cross-border payments.

Why? Because credit cards charge a standard rate on each transaction.

GoCardless provides a direct debit solution that’s easy to manage and much more cost effective compared to card payments. Transaction costs are much lower without causing any disruption to your customers.

If a portion of the customer base pays on a recurring basis, such as via a payment plan, moving them to a direct debit system may significantly reduce payment collection costs.

Direct debit is a payment method which puts the merchant in control of incoming payments. They are pull-based, meaning the merchant controls the payment amount and date. And because payments are protected by the direct debit guarantee, peace of mind is assured for the customer, too.

We can help

If you’re interested in finding out more about credit card processing solutions and how to save money when receiving payments, then get in touch with our financial experts. Discover how GoCardless can help you with ad hoc payments or recurring payments.

Over 70,000 businesses use GoCardless to get paid on time. Learn more about how you can improve payment processing at your business today.

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