Nowadays, the traditional commerce industry has been permanently impacted by the rise of e-Commerce. Particularly in the United Kingdom, where online buying and selling is becoming more and more common, the e-Commerce industry's rapid growth has opened up new options for both businesses and customers.
Conversion is without a doubt the most important factor for the success of e-Commerce. Your company's performance is measured by the conversion rate from online sales, and a reliable merchant account is essential for this.
Examining the top five UK e-Commerce merchant accounts will be the focus of this article.
Source: https://bbcincorp.com/offshore/articles/e-commerce-merchant-account-uk
What exactly is an online merchant account?
The first thing you need to do before beginning an e-Commerce business is to define a method of payment for your customers.
Online payments are often processed through a merchant account, which enables businesses to accept a variety of payment methods, including debit and credit cards, contactless payments, eCommerce transactions, and more.
This kind of account is created in accordance with a contract between a company and a financial institution that accepts payments from merchants. The firm agrees to comply with the policies and guidelines established by the provider of the e-Commerce merchant account in exchange for the bank agreeing to process its transactions.
What advantages do a merchant account for e-commerce have?
Numerous advantages that organizations might receive from having an eCommerce merchant account include:
Boost sales conversion.
Sending checks or wire transfers in order to make an online transaction cannot be more inconvenient for the customer.
Your sales and revenue will ultimately rise as a result of giving clients more easy payment alternatives for your products and services, which will increase customer convenience and increase sales.
reliable transaction
When you utilize a merchant account, the customer's information is passed through a mechanism referred to as an encrypted gateway, which means the data is converted into a code that is exceedingly challenging to decipher. Along with reducing risk across all of your sales channels, this safeguards clients from con artists.
Pay more quickly
The funds are sent straight into your account when you have a merchant account, so you can get paid more quickly. This is particularly beneficial if you are selling time-sensitive goods or services, like event tickets.
What to think about while opening an e-Commerce merchant account?
When looking for an eCommerce merchant account, you need take into account a few factors, such as:
Contract provisions
Before registering for an account, you should carefully read the contract. Be sure to pay particular attention to the contract's duration, any early termination penalties, and the equipment specifications.
According to industry norms, a merchant account contract typically has a three-year initial term and an automatic renewal clause that extends it by one more year. There will be an early termination fee (ETF) assessed by the processor if you breach the agreement by closing the account before the specified time.
Make sure you select the best choice for your company out of the increasing number of suppliers that provide a month-to-month contract.
Processing fees You should be upfront about a number of fees connected to merchant accounts, including:
payment for joining/application
setup or programming fee
Fee for monthly statements
processing minimum monthly
It immediately affects your cash flow and may perhaps 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.
Integration and suitability
Check to see if the type of eCommerce platform your company uses and the merchant account you select are compatible. You definitely don't want to create an account just to discover that it is incompatible with your website after you've already paid for it.
If you want to integrate with well-known eCommerce platforms like Shopify, Magento, and WooCommerce, you should ask the supplier in advance.
In the UK, the best merchant accounts are for online sales
Best merchant service overall: Square
One of the most well-known merchant account providers is Square, and for good reason: It offers a variety of services and advantages ideal for companies of all kinds, from brick-and-mortar to startups and small merchants.
Square doesn't charge monthly or annual fees; instead, you only pay when a sale is made, which is one of its main benefits. Offering next-day deposits, which expedites the delivery of your funds, is another fantastic advantage.
Pros
Feature simplicity
f transparent pricing
No monthly cost
Free online shop
no long-term contract
Cons
Unstable system performance is possible.
Inappropriate for high-transaction businesses
only sporadic support for overseas sales
Pricing
The following rates for transaction fees are used by Square's flat-rate pricing model for eCommerce transactions and invoices:
Locally: 1.75 percent
1.9% or 2.9% of online purchases
2.5% entered manually
The best platform for accepting credit cards online is Stripe
Stripe is a fantastic choice if you're searching for a merchant account for your eCommerce business that focuses on accepting credit cards online. It is compatible with well-known e-Commerce website builders like Squarespace and Shopify and offers a straightforward, pay-as-you-go pricing system with no additional charges.
Pros
Zero recurring or yearly fees
No setup fees, additional costs
Free trial and round-the-clock customer support
numerous platforms are integrated
Adaptable pricing strategy is offered.
Cons
No POS system
First payout may take up to 14 days to arrive.
Pricing
For cards issued in the UK: 1.4% plus 20p (plus 1.1% for the European Economic Area)
2.9% plus 20p when using a foreign credit card
A customized package is an option if your e-Commerce company processes a lot of payments and transactions.
For large businesses, PayPal is the best solution
An extensive range of capabilities are available for companies of all sizes through PayPal, one of the most well-known payment processors in the world. The fact that there is a very low entrance barrier and no monthly or yearly fees for using PayPal is one of its main benefits.
Pros
Millions of companies around the world rely on it
It offers round-the-clock client service.
connections to well-known e-commerce and invoicing platforms
Cons
hefty transactional fees
Up to 21 days for slow payment processing
Fees for overseas cards are marginally more expensive.
Pricing
When compared to other traditional merchant account providers, PayPal's fees are a little higher. You'll have to pay a fixed fee plus a percentage that changes depending on the local currency for each transaction.
Receiving domestic transactions at the regular rate is as follows:
A user without a PayPal account makes a card-funded payment: 1.2% Plus a set charge
GBP 10.01 and up for QR code transactions: 1% plus a certain charge
GBP 10 and under QR code transactions: 2% plus a set charge
any additional business dealings: 2.9% + fixed charge
Large companies that conduct a lot of transactions will benefit from PayPal's pricing model, which offers lower fees the more transactions you conduct.
For high-risk retailers, PaymentCloud is best
You'll probably need a high-risk merchant account if your online business involves the sale or provision of sensitive goods like gambling, tobacco, alcohol, and so on.
A number of capabilities, including chargeback protection and fraud prevention measures, are provided by PaymentCloud for high-risk enterprises. They also have a committed group of account managers that will aid in setting up and
Pros
there are no monthly fees or setup costs
devices for preventing fraud
Transfer rate that is reasonable
Customer service that is committed
with payment gateways compatible
Cons
more expensive transaction fees
not a free trial period
Protracted process for account approval
Pricing
Since high-risk payment services are normally handled by PaymentCloud, cost information is not made available up front. Tier pricing, monthly minimums, and contracts are the three categories that pricing plans are commonly broken down into.
The best for processing large amounts of data is Payment Depot
The ideal merchant account provider for businesses that process a significant volume of transactions is Payment Depot because it only requires a monthly membership fee.
Additionally, the business offers flat rates with no additional expenditures, which can help you save money on processing fees.
Pros
f transparent pricing
With no cancellation fees
Without a contract
gratis credit card reader
The option of monthly subscription
Cons
High-risk merchants are not offered services.
For small retailers, this could be inconvenient.
Pricing
The following is a list of Payment Depot's pricing packages:
Entry-level: $59 per month for services up to $125,000 annually
Starter Plus: $79 per month for up to $250,000 in annual processing
Development: $99 per month for up to $500,000 in processing
Additional characteristics to look for in a merchant account When you're looking for the ideal e-Commerce merchant account for your business, there are a few important characteristics that you should keep in mind.
Implementing a shopping cart
Integration of a shopping cart allows users to add things to their cart and check out without leaving your website, making it one of the most crucial elements of an e-Commerce merchant account.
gateway for payments
When clients enter their payment information on your website, they can do so safely via an online payment gateway. Encrypting consumer data and preventing fraud are two features of a solid payment gateway.
Payment cycles
A merchant account that allows recurring billing is required if you provide subscription-based goods or services. This makes it easier to bill clients automatically each month or every year.
statistics and reporting
You may watch your sales, keep a look out for fraud, and determine which products are selling the most using the analytics and reporting capabilities that the majority of merchant account providers will give.
Conclusion
All of the top five service providers are excellent choices for companies of all sizes. PayPal is a fantastic alternative if you're seeking for the least expensive one. Pay attention to PaymentCloud if your firm requires a high-risk merchant account, or Payment Depot if you process a lot of transactions.
Compare features and costs before deciding which service to choose, whichever one you select.
The experts at BBCIncorp can assist you with opening a UK merchant account and advising you on your best options 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. Send us an email if you need assistance, or you may chat with one of our helpful advisors in real time.
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