Cheap credit card processing

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Libby James
Merchant Services Expert

Libby James is co-founder, director and an expert in all things merchant services. Libby is the go-to specialist for business with more complex requirements or businesses that are struggling to find a provider that will accept them. Libby is regularly cited in trade, national and international media.

Finding the cheapest way of receiving card payments

We’re often asked to find the lowest cost merchant account and payment gateway for our clients, irrelevant of the business type, price is key in every aspect of company costings. We have spoken to a panel of experts and advisors to put together this short guide, using their industry tips to help you find the cheapest way of taking card payments for your business now and in the future.

When clients approach us for help, they are more often than not rate driven. A common question put to our team is ‘who has the cheapest credit card processing fees?’ The answer, simply put, is that no two businesses are the same – therefore what might be the cheapest card processing company for one business might not be for another. Later we will look at this in more detail.

Tip One – Shop around providers for the cheapest card processing quotes

What most clients do not know is that the rates you are currently paying or have been quoted, if a start-up company, are more often than not negotiable. If using a broker service, request your advisor approaches at least two companies. If going at it alone, always try and get more than one quote. If you have evidence of what you have been quoted elsewhere, do not be afraid to email a copy to alternative provider, ask them if they can beat it! Let’s face it you’ve got nothing to lose, asking for discounts with your new (or existing) merchant account bank is quite common.

Tip Two – Look out for hidden fees and read the small print

Finding the lowest price merchant account doesn’t necessarily mean securing the lowest rates possible. Watch out for ‘add ons’ or ‘hidden fees’ to ensure you don’t get a nasty surprise on your transaction statements. We find that so many of our customers are paying above the odds even though they have some of the cheapest market rates when we look at their transaction statements.

For example, a pub/restaurant business that took a lot of bookings and payments over the phone were being charged extortionate added fees by a mainstream well-known provider for over the phone payments (see below) which made up a large proportion of their turnover. These fees ended up comprising over 50% of their total costs but they didn’t understand their transaction statements so couldn’t see that they were getting a bad deal behind the headline rates. In that situation a cheap rate provider that doesn’t charge extra for virtual terminals would have saved them a fortune. Similar situations arise with things like (often completely unnecessary) added PCI compliance fees and other small print.

It’s important to compare providers like-for-like and on a pound note basis rather than the rates alone, this way you will find the lowest price credit card processing available to you. If using a broker send them your transaction statements so that they can work out exactly you would have paid for those same months with a different provider. Remember, that cheap merchant accounts for one company might not be for another – shop around to find the cheapest way to take card payments!

Tip Three – Understand the difference between online and offline

Sourcing the cheapest online card processing can be a little more difficult, as you have two costs when accepting payments online; the merchant account and payment gateway. Business owners often see these as one and therefore do not find you the overall cheapest way to accept card payments online. As above, make sure you look out for hidden fees and add-ons when searching for a merchant account. When it comes to finding a payment gateway for cheap online credit card processing be aware that ‘cheap’ doesn’t always mean that its best for your business and client security. Do not forgo security levels with cheap internet merchant accounts and payment gateways in favour of price, a matter of pounds per month can mean the difference between a trusted and high quality payment gateway and jeopardising the safety of customer card details. If your focus is face-to-face payments, your priority might be card terminal prices and EPOS systems as well as the merchant account.


Tip Four – Consider your business and its customers

As briefly discussed, sourcing the cheapest merchant card services should be done on a case-by-case basis. Taking the time to understand where the majority of your payments come from is imperative when finding the best deal available to your business. Credit and debit cards are charged at different rates as well as business debit and credit and American Express. Equally mobile and contactless card payments are often cheapest and sometimes even free to process, so this should be reflected in the account you choose. Finding the cheapest way to receive credit card payments largely depends on how your business is run and what industry you work in. For example, a coffee shop owner will take a lot of contactless transactions under £30.00 normally on debit cards. However a shop selling large electrical items will take fewer transactions at higher amounts, often on credit card. To ensure you secure the lowest credit card processing for your business, take a few moments to analyse your customers and how they choose to pay.


Tip Five – Cheapest ways to take card payments over the phone

Accepting payments over the phone when the customer is not present is known in the industry as MOTO payments (mail order/telephone order) and often carried out using a virtual terminal. Finding low cost merchant accounts to accept these types of transactions can be a little harder than standard face to face payments. The reason for this is that MOTO accounts are deemed slightly higher risk. To ensure you find the cheapest virtual terminal credit card processing speak to companies that are experienced in online processing, some even offer virtual terminals free of charge when you use their payment gateway service.


Tip Six – Cheap card processing machines

Card payment machines (PDQ) are more often than not rented on a monthly basis by businesses. The cost for the machines themselves tends to be low, from as little as £15.00 per month, however when searching for cheap card payments it’s important to think of overall cost. For example, renting a machine for £15.00 a month over a four-year contract costs £720 (plus VAT). In comparison, card machines can be brought outright for around £250. Having said that, most companies prefer to rent PDQ machines and you may be restricted in choice of provider if you wish to buy rather than rent. When looking for the cheapest way to accept card payments, why not consider both options.


Tip Seven – Continue to shop around into the future

So you’ve secured the cheapest credit card processing fees available to your business, pretty good right? Now we’ve got to keep it that way. For some reason, when it comes to banking (both business and personal) we feel some type of loyalty to our providers and banks. Often the cheapest way to accept credit card payments long term is to move providers. Set a date in your diary and review your account annually – or even better, let us do it for you! Rates and fees are constantly changing and they are almost always negotiable! A start-up business more often than not pays higher fees in the first year of trading, for example. Once a clear transaction history has built, they can nearly always secure better rates and fees elsewhere. Finding small discounts each year could save hundreds on your credit card processing costs as your business grows.

Tip Eight – Use a broker service to find the cheapest deals for you

At Merchant Advice Service, we work alongside industry experts to help businesses in anything payments related from finding cheapest online credit card processing to face-to-face payments including cheap iPhone credit card processing and portable solutions. From small start-up businesses to larger more established and international firms, our advisors have a wealth of industry knowledge, aiding you in securing the lowest cost merchant services for your business now and in the future.


Affordable credit card processing – frequently asked questions…

What’s the cheapest way to accept credit card payments small business?

Sourcing the cheapest card processing solutions for a small business, often means that you want to avoid large overheads. Think about avoiding long contract lengths and finding simple solutions that fit your business needs, rather than all singing all dancing machines and terminals that will be a little more expensive. As with any business finding the lowest credit card processing fees for smaller business is an ongoing commitment, make sure you shop around annually to ensure you continue to get the very best rates.


How can I find cheapest merchant account fees and rates?

The industry is a confusing one, we understand that. Most banks will quote rates and fees – but what do they actually mean? To find the lowest rate credit card processing, it’s important to compare like-for-like. If needs be ask your advisor what you will be saving in pound notes rather than percentages. As discussed previously, we often use a previous transaction statement to carry out a fair comparison for our clients. Remember it’s not about the cheapest merchant account rates alone, it’s the overall cost that matters.


Are there any account discounts available to merchants?

YES! As briefly discussed earlier, finding a merchant account discount rate is more often than not a case of asking. If you are prepared with quotes from other companies you will find that fees can be negotiable, a lot of providers will want to beat what you’ve been quoted elsewhere, enabling you to secure the cheapest card processing fees available to you. Using a free brokerage services like us means you can potentially get even more leverage for better rates with the different providers.


How do I find cheap mobile card payments?

If you are accepting a lot of payments either via contactless or mobile, mention this when sourcing quotes. Some merchant account providers do not charge a fee for contactless payments. In reality this could save a merchant taking high volume lower transactions hundreds of pounds per month, ensuring you get the cheapest merchant account fees overall.


Merchant Advice Service offers clients access to industry experts. Working together we aim to not only secure you cheap credit card processing rates but provide a long-term service that suits your company now and in the future. Our advisors will remain in touch with you throughout the lifetime of your business, and if they think you should move providers to be eligible for more attractive and low rate merchant services they will tell you. Alternatively, if your current provider is right for you they’ll let you know. Our team of UK based experts make finding an affordable merchant account easy.

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Libby James

Libby James Co-founded Merchant Advice Service alongside David Bird in 2016. Her finance background, coupled with retail and customer service experience, gave Libby the drive to bring transparency and non-biased advice to the world of merchant services. Having come from the heavily regulated mortgage and insurance industry, Libby found it puzzling that other financial sectors lacked regulation and transparency leaving customers confused and unable to make informed decisions when it came to accepting card payments. This was soon to become Libby’s obsession!

With the help of some of the industry’s best, Libby began to research acquiring banks, complex terminology/regulation, and the problems customers experience within merchant services and payment gateway markets. She spent years on sourcing solutions for complex clients, which previously others were unable to assist with. Libby established relationships with brokers and banks which would soon form the cornerstone of Merchant Advice Service. As a result Libby has been featured in high-profile publications across the web.

Libby is proud to be the entrepreneur’s champion, supporting start-up businesses regularly. Her industry insights can often be found on LinkedIn where she provides free of charge advice and money saving pointers. It’s safe to say she has her finger on the pulse of everything card payments related.

Libby speaks of her experience in founding and running Merchant Advice Service…

‘Merchant Advice Service is one of my greatest achievements to date. We help business owners to overcome card processing issues which can become detrimental to their business. We assist SME’s in finding suitable card payments solutions, helping them create their vision. Each and every day is different, exciting and fore filling. As technology advances I can’t wait to see the way in which the merchant services market advances, and I’m pleased that our business will play a part in educating company owners along the way.’

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