Today's e-Commerce has permanently disrupted the traditional commerce sector. Particularly in the United Kingdom, where online buying and selling is becoming more and more popular, the e-Commerce sector's rapid growth has opened up new options for both businesses and customers.
Conversion is without a doubt the most important factor in e-Commerce success. A competent merchant account is essential in this process because the conversion rate from online selling tells you how well your firm is doing.
Let's look at the top five e-Commerce merchant accounts for online businesses in the UK in this post.
What is an online merchant account?
The first thing you must do before launching an e-Commerce business is to define a method of payment for your customers.
Online payments are typically processed through what is known as a merchant account, which enables businesses to accept a variety of payment methods, including debit and credit cards, contactless payments, eCommerce transactions, and more.
A firm and a merchant acquiring bank or other financial institution enter into a contract to establish this kind of account. The firm agrees to abide by the guidelines established by the supplier of the e-Commerce merchant account in exchange for the bank agreeing to process its transactions in a certain manner.
What advantages do e-Commerce merchant accounts have?
Businesses can gain a lot from having an eCommerce merchant account, such as:
increase sales conversion
Sending checks or wire transfers in order to make an online purchase is the most cumbersome option for clients.
A merchant account gives customers more easy ways to pay for your goods and services, which ultimately boosts sales and revenue.
secure transaction
When you utilize a merchant account, the customer's information is passed through what is referred to as an encrypted gateway, meaning the information is converted into a code that is highly challenging to decipher. This reduces risk across all of your sales channels and safeguards customers against con artists.
Receive payment more quickly
Since the money is sent straight into your account when you have a merchant account, you can get paid more quickly. This is especially useful if you are marketing time-sensitive goods or services like event tickets.
What factors should you take into account while opening an e-Commerce merchant account?
When searching for an eCommerce merchant account, you need take into account a few factors, such as:
contract conditions
Before opening an account, you must carefully read the contract. Pay particular attention to the contract's duration, any early termination costs, and the equipment specifications.
According to industry norms, a merchant account contract typically has a three-year initial term and an automatic renewal clause with a one-year extension after that. You will be charged an early termination fee (ETF) from the processor if you breach the agreement by cancelling the account before the specified time.
Make sure you select the best option for your company because more companies now offer a month-to-month contract.
Processing fees There are a number of charges connected to merchant accounts that you should be aware of right away, including:
Application or membership fees
Setup/programming charge
Monthly statement charge
processing on a monthly minimum basis
It immediately affects your cash flow and could potentially impair your bottom line, so make sure you are aware of exactly how much it costs to execute a transaction or to maintain your merchant account.
Integrations and compatibility
Make sure the merchant account you select is suitable with the kind of eCommerce platform you're utilizing for your company. The last thing you want is to create an account just to discover that it doesn't function with your website.
To find out if the company offers integrations with well-known eCommerce platforms like Shopify, Magento, and WooCommerce, you should ask the supplier in advance.
Best merchant account for e-commerce in the UK
Square offers the best merchant services overall
With a variety of services and advantages ideal for companies of all kinds, from brick-and-mortar to startups and small merchants, Square is one of the most well-known merchant account providers.
One of the main benefits of using Square is that there are no monthly or annual fees; instead, you only pay when you make a sale. They also provide next-day deposits, which expedites the process of receiving your money.
Pros
Features that are simple to use
transparent pricing
There is no monthly cost.
Free online store
There is no long-term contract.
Cons
There may be fluctuations in system performance.
Unsuitable for high-transaction businesses
Limited support for overseas sales
Pricing
For eCommerce transactions and invoices, Square uses a flat-rate pricing scheme; the following are the rates for transaction fees:
Personal: 1.75%
Online payments: 1.9% or 2.9%
manually entered: 2.5%
The best platform for processing credit cards online is Stripe
Stripe is a fantastic choice if you're searching for an eCommerce merchant account that focuses on processing online credit cards. It is compatible with popular e-Commerce website builders like Squarespace and Shopify and offers a straightforward pay-as-you-go pricing system with no additional charges.
Pros
No recurring monthly or yearly fees
There are no setup costs or additional costs.
Free trial with round-the-clock customer support
integrates with a variety of platforms
There is a flexible pricing structure available.
Cons
no POS system
First payout may take up to 14 days.
Pricing
In relation to UK cards: 1.4% + 20p (plus 1.1% for the European Economic Area)
2.9% plus 20p for international credit cards
You can choose a bespoke plan if your e-Commerce company processes plenty of payments and transactions.
The best solution for large businesses is PayPal
One of the most well-known payment processors in the world, PayPal provides a full range of options for companies of all sizes. Having an extremely low entry barrier and no monthly or yearly fees is one of PayPal's main benefits.
Pros
trusted by millions of businesses worldwide
There is always customer service.
Integrations with important e-commerce and invoicing platforms
Cons
high transaction fees
Processing payments slowly can take up to 21 days.
Fees for overseas cards are a little bit more.
Pricing
In comparison to other traditional merchant account providers, PayPal charges slightly higher fees. You will be required to pay a percentage plus a predetermined fee every transaction, which varies depending on the local currency.
The normal fee for receiving domestic transactions is:
Card-funded payment from a user without a PayPal account: 1.2% plus a fixed charge
QR code transactions costing GBP 10.01 and over: 1.5% plus a set charge
QR code transactions for amounts under GBP ten: 2% plus a set charge
All other business transactions: 2.9% plus a fixed charge
The price structure of PayPal provides a lower cost the more transactions you do, which is advantageous for large firms with a high volume of transactions.
The best option for high-risk merchants is PaymentCloud
You'll probably need a high-risk merchant account if your e-Commerce involves the sale or provision of sensitive goods like gambling, tobacco, alcohol, and so on.
Chargeback protection and fraud prevention capabilities are only two of the features that PaymentCloud offers for high-risk enterprises. They also offer a committed group of account managers who will assist you in setting up and
Pros
There are no monthly fees or setup costs.
instruments for preventing fraud
reasonable transmission rate
Dedicated customer service
compatible with payment gateways
Cons
higher transaction costs
No risk-free trial period
long account approval process
Pricing
Pricing information is not made available up front because PaymentCloud is often utilized for high-risk payment services. Pricing plans are often broken down into contracts, monthly minimums, and tiered pricing.
The best option for high-volume processing is Payment Depot
The best merchant account provider for companies with a high volume of transactions is Payment Depot, which charges a monthly membership fee.
Additionally, the business provides a flat-rate pricing structure with no additional charges, which can help you save money on processing expenses.
Pros
transparent pricing
There are no cancellation fees
There is no need for contracts.
free credit card reader
There is a monthly membership option.
Cons
For high-risk business owners, no service is offered.
possibly inconvenient for tiny merchants
Pricing
The following is a list of Payment Depot's price options:
Starter: $59 per month for processing up to $125,000 annually
Starter Plus: $79 per month for processing up to $250,000 annually
Growth: $99 per month for up to $500,000 in processing every year
Additional qualities to look for in a merchant account When you're looking for the best e-Commerce merchant account for your business, there are a few crucial features that you should keep in mind.
Integration with a shopping cart
Shopping cart integration, which enables users to add things to their basket and check out without leaving your website, is one of the most crucial elements of an e-Commerce merchant account.
payment gateway
Customers can enter their payment information securely on your website using an online payment gateway. Customer data will be encrypted via a reliable payment gateway to stop fraud.
Recurring billing
You will want a merchant account that enables recurring charging if you sell subscription-based goods or services. This makes it easier to automatically bill clients on a monthly or yearly basis.
Analytics and reporting
Most merchant account providers will include some kind of analytics and reporting tools that let you monitor fraud, analyze your sales, and determine which products are selling the most.
Conclusion
The five suppliers we've mentioned above are all excellent choices for companies of all sizes. PayPal is a terrific option if you're seeking for the most reasonable one. Pay attention to PaymentCloud if your company needs a high-risk merchant account, or Payment Depot if you process a lot of transactions.
No matter which company you select, be sure to evaluate features and costs before making a final choice.
If you feel that selecting the ideal e-Commerce merchant account for your company is a difficult trip that you don't feel like embarking on by yourself, BBCIncorp can assist you with opening a UK merchant account and provide you with advice on your best options. Please feel free to send us an email or start a live chat with one of our helpful experts for support.
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