A Guide to Merchant Payment Services (UK 2025)

If you need to accept payments from customers on behalf of your business you may find you need merchant payment services which can include payment processing tools, payment gateways and even extra tools to streamline your operations and improve relationships with your customers. So, what online payment merchant services will work for your business?

This guide to card payment merchant services covers all you need to know. Plus we’ll touch on how you can use Wise Business to accept customer card payments in 18+ major currencies with no ongoing charges and low, transparent transaction fees.

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What are merchant payment services and how do they work?

Merchant services is a catch all term for a very broad range of tools and options for any business which needs to take customer payments. You can use merchant services for payment processing end to end when you accept customer card and bank payments, for example, including a merchant services payment gateway to securely transmit your customers’ sensitive financial data to their bank to request payments.

It can help to get a picture of the flow of a customer payment, to see the full scope of merchant services. When a customer initiates a payment on or offline, a payment gateway will encrypt their financial information and pass it to a payment processor. The processor then checks everything and works with the card network or bank to approve the payment - this chain of events takes no time at all, allowing for near instant card and bank payment approvals.

Merchant services can encompass pretty much all of the services needed for this process, and may also include customer care services, gift card issuance, physical POS equipment and other important tools.

Read more about the Best Business Payment Services in the UK.

What is the difference between a merchant service and a merchant account?

A merchant account is a specific bank account which is used to receive funds from customer card and bank payments before the merchant withdraws the money to their normal business account for day to day use.

Merchant services cover a far broader range of services - although depositing funds into a merchant account can fall within the remit of a merchant service provider.

Read more about how to take card payments without a merchant account.

Types of payment methods from merchant services

Merchant payment service providers offer many different ways to take customer payments, to allow you to connect with more customers and grow your business. Additionally, global payment merchant services include options to take international payments, including currency conversion where needed.

The features, fees and payment methods available from different merchant service providers can vary a lot - however, you’ll usually find the following options for on and offline use:

• Credit and debit cards
• E-wallets like Apple Pay and Google Pay
• Bank transfers
• Standalone providers like PayPal
• Buy Now, Pay Later services
• Cheques
• Gift cards

Pricing and fees for merchant services

Different merchant payment service providers take different approaches to pricing and fees. Some providers have ongoing monthly costs which may include different plans you can select depending on your transaction needs, for example. On top of this there are almost always per transaction costs which depend on the way the customer chooses to pay.

Some of the fees you may come across when choosing merchant service providers might include:

• One off set up costs, especially for physical POS equipment
• Monthly fees which may have different plans for different customer needs
• Per transaction costs based on the payment method
• Hardware costs if you need to take offline payments
• Currency conversion fees if you’re taking payments from customers based abroad

Pricing can be flat, tiered or entirely custom made for each client - there’s a lot of variation so shopping around to find the right fit for your business will be essential.

Global merchant payment services

Many UK businesses choose to work with global merchant payment services to allow them to take a very broad range of customer payments from around the world. Global merchant payment services support card payments from overseas, and can also often support other local payment methods which are popular in particular countries or regions - for example Alipay and WeChat Pay for customers in China and East Asia. These services can create connections with customers in new regions more easily by providing payment methods the customer is familiar with, building trust and brand recognition.

If you need to take customer payments from overseas, you might find your merchant service provider charges extra fees including currency conversion costs. This can mean you get less in your account in GBP in the end.

As an alternative, consider using Wise Business to accept customer card payments in 18+ major currencies, and have the money deposited to your Wise account in the currency the customer paid in.

If you have a customer in the Eurozone, for example, they can pay in euros and you’ll receive the amount without need for currency conversion. You can then hold your EUR with Wise until you next need to make a EUR payment yourself, or convert back to pounds with the mid-market exchange rate to cover your local costs in the UK.

This puts you back in control of the process of currency conversion and can cut out unnecessary costs when you manage your business finances across borders.

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How to choose a merchant payment service provider

Picking the right merchant payment service provider can feel a bit overwhelming as there are so many different options with vastly varied approaches to features and fees. Shopping around is essential, including comparing different providers based on their costs, convenience and customer service record. Some things to consider include:

Does the provider offer all the features and services you need? Some specialise in only online payments for example, while some offer specific payment methods only - double check the options you’re considering have all your business needs to flourish.

What are the fees associated with the services you need? Ongoing costs can be a drain, so consider the ongoing and per transaction fees carefully. Beware of unexpected costs too, such as the fees for currency conversion or dispute resolution support.

How will the provider fit your future ambitions? It’s worth thinking about how your payment services provider might be able to accommodate your growing business, based on your ambitions. If you plan to expand overseas for example, you need a global merchant payment provider. Or if you think you’ll move to a combined on and offline model at any point, you need a provider which can help.

Do the tools the provider has integrate with your existing systems? If you use cloud accounting for example, you’ll want a merchant service provider which integrates seamlessly so you don't need to change providers you’re already happy with.

Can you get feedback from existing customers in person or online? Check the provider you’ve picked has a good reputation for customer service so you’ll know what happens if things go wrong. Use services like Trustpilot to get aggregated online reviews, and ask around to see if other business owners you know have experience with the provider’s services too.

Ultimately, there’s no perfect merchant payment service provider but by doing some due diligence checks before you sign up you can give yourself the best chance of accessing all the tools you need for a fair price.

Simplify online payments with Wise Business

Complex payment gateway integrations are in the past, you can start accepting credit and debit card payments in 18+ currencies in minutes with Wise, no code required.

Just send a payment link, invoice, or QR code to your customers, and let Wise handle the rest, ensuring timely payments and improving your cash flow. This streamlined approach wipes out the technical challenges and time-consuming setup associated with traditional payment gateways, allowing you to focus on what truly matters: growing your business.

Say goodbye to high and complex payment processing fees. Wise Business offers a transparent, low-cost solution with just 1% fee for domestic cards and 2.9% for international and business cards.

And once the payment is done you can manage multiple currencies effortlessly, all in one account. Enhance your customer relationships and support your business's global expansion with a payment solution that prioritises simplicity and efficiency.

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FAQs - merchant payment services

Do I need a physical POS system to use merchant payment services?

You do not necessarily need a physical POS system to use merchant payment services. You may choose to get a physical system for offline payments if you like, but many providers offer digital means to take payments using software solutions hosted on your phone. Merchant payment providers also offer a full range of online payment solutions.

Can I integrate merchant payment services with my e-commerce platform?

Yes. Many merchant payment service providers have easy integrations which you can use to take payments online. Low and no code solutions are often available, or you can customise your system if you have the technical skills to do so.

Read more about the 6 best ecommerce payment providers.

What is a chargeback, and how do merchant payment services handle them?

A Chargeback occurs when a customer disputes a payment which your business has processed. This may be because of fraud, or because the customer states that the goods or services weren’t delivered for example. In this case they can ask their card provider for their money back. If this happens, the merchant payment service provider can help you resolve the issue. They’ll investigate what’s happened and can help to settle the dispute - fees are usually charged to you in this case.

Merchant payment services can include pretty much everything needed to manage the lifecycle of a customer payment, from the payment gateway and processor, to moving money to and from merchant accounts, and even following up with customer support and dispute resolution tools. Merchant payment services can be provided for on and offline sales, and are offered by a huge range of providers in the UK.

Before you pick the right merchant payment service provider for your business, shop around and compare a few using the ideas covered in this guide. Look at the fees, features and how you can get help if something goes wrong. And don’t forget that if you’re taking customer payments in foreign currencies, you might also be able to save with Wise Business. Use Wise to accept customer card payments in 18+ major currencies, get paid with local and SWIFT account information, and manage all currency conversion with the mid-market rate and low, transparent fees.

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