We decided to crunch the numbers and find out how much not accepting card payments could actually be affecting a business’s bottom line. A lot, it turns out.
Cash and Card Payments in 2015
2015 data from Payments UK shows the split between cash and card payments. When looking solely at credit card, debit card and cash payments, cash payments account for 58% of transactions and card payments 42%. Statistical data reveals that the average SME earns £223,000 profit annually, thus amassing, on average, £93,660 from card payments alone. Factor in that a quarter of UK consumers avoid cash only businesses, and that leaves a whopping £23,145 of unaccounted for, potential revenue. And that’s just the tip of the iceberg.
Cash and Card Payments in 2025
2025 projections see a huge shift in payment patterns, with card payments swelling to equate to 65% of transactions, and cash payments slipping to account for just 35%. This means that by 2025 businesses could be jeopardising £35,680 annually by failing to accept card payments.
Moreover, research by Worldpay found that two-thirds of 24-34 year old people prefer not to carry cash. Instead they opt to use credit or debit transactions, which further enforces future projections. In order to remain competitive in the digital space cash-only businesses need to adapt their payment options, or risk the future of their business.
How Do Internet Credit Card Payments Work?
In order to accept credit card payments, business owners must first have an internet merchant account. This is the account where the credit is actually transferred to.
The process of transferring the funds takes places using an internet payment services provider (PSP). The PSP sends a customer’s bank details to a business’s merchant account and it is during this process that the payment is either accepted or declined. The PSP then sends the result back to the merchant who either completes the sale or refuses it.
A payment page on the PSPs website will show the result of the transaction. Consumers, and merchant, will also receive an email confirming the transaction. The Point of Sale for online credit card transactions is the device into which the customer enters their PIN code. This could be a personal computer, a mobile phone, a tablet or some other device. You can see how this process works and make a test transaction here.
How Much Do Banks Charge for Credit Card Processing?
Offering customers the opportunity to pay by debit or credit card is a great way for businesses like yours to increase sales. Moreover, they can also provide their customers with flexible payment options suited to their preferences.
However, in order to process these payments, fees must be paid by businesses to the processor (most often a bank). Credit card processing charges depend on a number of factors including the volume of sales that are processed each month.
When you sign up for an online merchant account, you will be provided with a number of package options, and a number of these will include monthly fees in addition to the transaction fee. There are also different package types depending on whether you conduct your business face to face, online or over the phone and through mail order.
Barclays for example chooses to offer its customers the opportunity to take credit card payment services online for a monthly fee, rather than per transaction. This fee is around £45 a month and merchants need to be wary of any extra charges for the full range of the relevant services.
It is important to note than banks are not the only providers of credit card processing and you should compare other sources in order to get the best deal. Despite the transaction fees for processing credit cards, offering this option is still going to be more profitable than limiting payment options.
Online Credit Card Processing
In today’s online business environment, having the ability to take online credit card processing and debit card payments is an absolute must. It may be tempting to dispense with the fees and only accept PayPal but this can be a quick way to lose customers for the sake of saving a little money.
Taking payment online from credit and debit cards is not as straightforward as it may appear from the customer’s point of view. A merchant payment services account is required first and until recently these were offered only by offline businesses.
In addition to this, you need a payment processing provider. i.e. a system that processes the transaction and sends the details to your merchant account. Traditionally, you would have two different providers for each service, and that is still a viable way to operate. These days, however, you also have the option to choose providers that offer all in one solutions – a rolled together Internet Merchant Account (IMA) and payment processing.
Credit Card Processing Companies With No Monthly Fee
Nochex provide an all-on-one service for businesses. They combine a merchant account seamlessly with a payment gateway and payment processing. One solution. One supplier.
Accepting payments from both the UK and abroad, Nochex is ideal for businesses that deal solely online. They also benefit from the freedom to suspend service as they wish. And they are not bound in by monthly or annual fees and contracts.
With low transaction fees, Nochex offer the chance for small businesses as well as large businesses to offer online payments. Nochex even includes their PCI compliance services as part of the package!
Merchants all over the UK including those in the fintech, education, and service industries use Nochex. Nochex secure payment services is a recommended merchant account provider for business in the UK and Europe.
How to Get the Best Deal?
Even the smallest difference in percentage fee for card transactions can have serious financial implications in the long run. Therefore, shopping around for the best deal is essential for businesses. Do not simply rely on your trusted bank to give you the best deal – look at independent organisations as well.
We’ve reviewed some of the top card payment services UK companies that help keep businesses competitive through the digital curve.
Top Card Payment Services Providers
Worldpay
Worldpay used to be the leading player among UK payment service providers. However, US based Vantiv acquired Wordlpay in 2017 by . The company tends to work with larger, more traditional international organisations rather than more entrepreneurial online businesses.
First Data
First Data is another big, multi national payments service provider based in the US. Like Worldpay they mainly target large corporate customers. At the forefront of their technology First Data puts fraud prevention first.
Next Steps
Would you like to know more about business payment services or discuss your requirements with us? Click on the Apply button at the top of this page or call us on the number near the bottom.