How to find the cheapest merchant services for your small business


Card has now very definitely become the preferred method of payment for most consumers.

And with payment processors taking a cut of every card payment your small business receives, finding a cheap merchant service is vital if you want to keep margins low.

But it’s not as simple as hunting for the lowest transaction fee – various factors contribute to the overall cost of merchant services.

Below, we demystify merchant services costs and compare the cheapest merchant services for small businesses to help you find the best option for your particular needs.

What is a merchant service?

A merchant services provider is responsible for processing electronic payment transactions, giving your business everything it needs to safely and securely receive credit and debit card payments.

Whether you want to take payments in person, online, or over the phone, you’ll need to pay for merchant services.

Merchant services fees

The various fees and pricing structures used by merchant services can be bewildering. But don’t worry, we’re going to break down the main ones you’ll encounter so you can ensure you’re getting good value from your provider.

Transaction fee

  • Transaction fee – charged for every card payment you take. It actually breaks down into three separate fees (interchange, assessment, and processor markup), though as a customer, you’ll generally see it advertised as a percentage of each transaction.
  • Card-Not-Present fee is another type of transaction fee for online or phone payments. It’s a slightly higher percentage of each payment due to the increased risk of fraud.

Flat fees

  • Monthly processor fee – regular charge for using the service
  • PCI compliance fee – a fee for remaining compliant with the Payment Card Industry standards

Incidental fees

  • Chargeback fee – charged in the event of a transaction reversal/refund to a customer’s account
  • Contract termination fee – charged in the event that you wish to exit your contract early

You may be in a position to negotiate your rate on certain fees, though this is generally only available to high-earning businesses on tiered models.

Merchant services pricing models

There are four main pricing models used by merchant services providers:

  • Flat rate – one basic flat rate covering all fees and other markups regardless of sales volume. Cost-per-transaction is usually higher than other models, but the predictable and transparent fees makes it a great option for smaller businesses
  • Contract with tiered pricing – cost-per-transaction is lower the higher your sales volume or monthly takings. Thresholds vary by provider, but the lowest rates are usually only available to larger businesses with a very high turnover
  • Interchange plus – the provider charges the interchange fees plus a markup. Probably the most predictable and most competitive pricing model available depending on your sales
  • Monthly subscription – charges a membership fee which grants you access to lower or even zero transaction fees. Can be the cheapest option, but only as long as the total spent on fees with another provider would otherwise be higher than the subscription cost

What are the cheapest merchant services for small businesses?

One of the biggest challenges in comparing merchant services providers directly is their differing fees and pricing models. That’s why we’ve chosen to compare providers by giving an example for each pricing model.

Flat fee

Provider Monthly Cost Transaction Fee Device Cost PCI Compliance Fee Chargeback Fee
SumUp N/A 1.69% from £39 N/A £10 Admin fee
Square N/A 1.75% from £19 N/A N/A

Smaller businesses with low, unpredictable monthly takings love challenger merchant services like SumUp and Square because they’re not tied into a contract and the transaction fee is charged at a flat rate with no hidden fees.

This means you’re not paying unnecessary monthly fees if business is down, and you can easily work out monthly costs. However, once your takings start to increase, transaction fees of 1.69%+ no longer represent great value.


Provider Monthly Cost Transaction Fee Device Cost PCI Compliance Fee Chargeback Fee
WorldPay Online Payments £19 – £45 per month 2.75% + 20p or £19.95 per month £69 or £17.95 per month £29.99 per year £15 Admin fee
WorldPay from FIS Variable 0.20 to 2.25% from £17.95 per month £29.99 per year N/A

WorldPay’s monthly subscription model offers flexible payment plans that make it great for small established businesses – like hairdressers and restaurants – with predictable monthly takings.

Its monthly fees are designed to simplify charges and cover all standard fees. However, as you can see, fees are a lot higher than the likes of SumUp and Square. This is because they give customers access to more sophisticated security, reporting, and other features.

WorldPay’s contracts are now managed by US financial technology company FIS. Monthly costs are variable depending on the size of your business, but we’ve included it as an example of the competitive transaction fees you can access with a contract.

Interchange Plus

Provider Monthly Cost Transaction Fee Device Cost PCI Compliance Fee Chargeback Fee
Adyen N/A Variable depending on region and payment method Contact sales N/A N/A

Adyen uses the interchange rate, the fee paid between banks for the acceptance of card transactions, to determine costs. These vary enormously by region and payment type, but means the cost of each payment can be calculated exactly, giving you full transparency of each transaction.

It charges no monthly fees or set-up fees, but it does have a minimum invoice of €100 (£83) per month depending on transaction volume and region.

Which merchant service is right for me?

The best way to find the cheapest merchant service for your business is to do thorough research, compare providers, and establish how their particular fee structure would work with your business setup.

Or, if you’re ready to start comparing merchant services, simply fill in the form above to get quotes from top providers?

Companies mentioned in this article

Worldpay from FIS

Further Resources

Global payment services for small businesses – An explainer on the best international payment solutions for small businesses that allow you to avoid higher fees when trading internationally.

What is a merchant account and how do you open one? – This article explains everything from costs to getting set up, so you can find the best merchant account for your needs.

Taking payments online for e-commerce businesses – What are the easiest and most affordable options for small businesses?


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