Merchant Services
If you plan to take card payments, whether via a card reader in a shop, over the phone or over the internet, you will need a merchant account. Most UK banks outsource their merchant services to a third party provider, known as the aquiring bank.
Note that most merchant service providers are owned by one of the larger banks - something to bear in mind if you're interested in ethical banking. For example, Streamline is owned by the RBS group.
Merchant Service Providers
This is a list of the merchant service providers used by the UK banks. It is not a definitive list of all merchant service providers.
- Streamline – Merchant services.
- euroConex – Merchant services.
Payment Services
In order to receive payments online, most of the merchant service providers will be associated with an online payment service provider (aka payment processor) who provide a service to gather the user's payment details and pass them through a payment gateway to credit your merchant account.
Note that whilst it is possible to develop your own functionality for interacting with the merchant account, it is technically complicated and there are a number of requirements that must be met to satisfy the merchant service provider. In most cases it is unrealistic for a small business to develop such functionality and so a payment service provider will be used.
Payment Service Providers
This is a list of the payment service providers used by the merchant service providers listed above. It is not a definitive list of all payment service providers.
- WorldPay – Internet payment processor, used by Streamline.
- SECPay – Internet payment processor, used by euroConex.
Escrow Payment Serices
Some online payment service providers, such as PayPal, do not require you to have a merchant account. These providers differ in that they provide an account into which all payments go, i.e. they act as both the bank and the payment processor. In order to get money from this account into your business bank account you will have to transfer it manually.
One disadvantage of using an escrow service is that they are not governed by the various laws that govern banks. I have heard various reports of PayPal freezing an account because of 'suspicious' activity (e.g. if it suddenly grows) and it can be difficult and time consuming to resolve this problem. Also, if money is fraudulently stolen from your PayPal account it can be difficult to get it back.
One advantage of using PayPal is that they are easy and cheap to set up.
UK Banks
This is a list of the main UK banks, seperated according to the merchant service provider they use.
Banks that use Streamline
- RBS merchant services – Merchant services from RBS.
- NatWest merchant services – Merchant services from NatWest.
Banks that use euroConex
Banks that provide their own merchant services
- HSBC – Merchant Services from HSBC.
