Transparency is one of the most important factors when arranging your Merchant Services but sadly this isn’t the case with many third party sales companies, who sell merchant services by using a headline rate to encourage a customer to switch provider or attract businesses looking to start to accepting cards. 

In this article we will look to provide you with the tools to ask the right questions at the outset, before signing agreements, and particularly so with long terminal contracts tying you into the third-party sales company for 3 or 4 years, making it too costly to change your mind later.

On the face of it, it should be really simple and uncomplicated right?……… Well, you would assume this to be correct BUT and it’s a very big BUT, as nothing could be further from the truth!

The fact is that some sales organisations will use the approach of making it look simple with what looks like straightforward pricing on signing up, for example focusing your mind on a low personal debit card rate compared to what you may be currently paying, and then charging way more than you could be paying for other card types. (See examples we cover later in the article).

As a result, you may have switched having made no savings and in some cases, the fees are higher than your previous provider!

Look beyond the “Headline Rate”

The practice of promoting low costs at the outset to entice you in isn’t new, it’s been with us since we first started trading goods 1000s of years ago. We all love a bargain, and we all love a “deal” and we are no different when it comes to sourcing services for our business.

One of the challenges with Merchant Services is that there isn’t a simple, “one size fits all” pricing structure – If there was, it would be straightforward and this article would stop here!

There are a range of factors that affect the effective price you pay to process a card payment and ultimately the costs detailed on your monthly merchant services invoice issued by your provider.

The main factors are:

  • The type of card being processed (debit, credit and whether business or personal)
  • The submission or acceptance method (customer present, over the telephone, via your website or perhaps via a payment link or mobile phone or digital wallet)
  • The region of where the card was issued (UK, EEA or International for cards issued outside the European Economic Area)
  • What product/service you’re taking card payments for and delivery timescales

Reading this may make your head spin and its therefore unsurprising that many customers focus on the headline rates offered by their provider and accept these rates without lifting the bonnet and looking around at what’s really going on.

Here at acceptcards® we are constantly building our knowledge covering all aspects of Merchant Services, so how can a busy SME who just wants a reliable card machine to take card payments, be expected to understand the full details of what’s presented to them.  Sales reps will use this to their advantage to rush through the signing of applications knowing full well that many business owners have a million and one things to do and are likely to accept what’s being said without realising the repercussions.

Our advice would be to “hit the pause button” once you’ve obtained the full pricing and then take time to speak with someone who can provide a second opinion and will understand every aspect of what deal you’ve been quoted, covering pricing across all card types and contract lengths.

At acceptcards® we’ve helped thousands of businesses over the last 16 years who wished they had come to us sooner for advice before signing up to something they were not fully aware of.

Many third parties selling Merchant Services will even avoid telling you who the actual card processor is, which is very important given it’s that company who is providing the card processing and you are ultimately contracting with.

Below are a few examples of quotes that don’t provide the full cost of what you could be signing up for:

Visa Personal Debit cards v Visa Business Debit cards

0.35% on Visa Personal Debit Cards and 1.8% on Visa Business Debit cards

On the face of it this seems like a great deal, as the 1.8% is  a good rate for Business Credit cards, however much will depend on the volume of Visa Business Debit cards that you accept.  At 0.35% the Personal Debit cards are priced at just above the buy rate the third party has from the card processor and is circa 0.1% above the cost to the processor after paying Visa and MasterCard.  The buy rate is typically 0.1%+5p higher than a personal card (can vary dependent on the average transaction value and how the card is taken) for a Visa Business Debit card, so at 1.8% the margin they are making can be as much as 1.3%!  Therefore if you were to take £30,000 per annum on Visa Business Debit cards you’re being charged as much as £390 per annum more than you could be.

The headline personal card rate looks good though, right?

Surcharge in the small print for telephone and e-commerce transactions

We see statements every day with additional fees ranging from 0.1% to 0.85% for these transactions, which for businesses taking payments this way can increase your fees significantly.  The actual cost of processing these transactions can be as low as 0.05% so a surcharge of 0.5% is a big difference in costs that you don’t need to be paying. In this example taking just £30,000 per annum this way can increase your charges by £135 per annum.

Again, the headline rate looks good though and it’s highly unlikely that you haven’t had the surcharge explained before you sign up!

Charging much higher rates for Premium Personal Credit cards

We often see headline Personal Credit rates at say 0.8% and Premium Personal Credit card rates at much higher rates.  The actual cost of a Premium Personal Credit card to process is virtually the same as a Standard Personal Credit card, so charging much more is totally unjustified!


The above examples highlight the benefits in arranging your Merchant Services with a reputable company and taking a step back to understand the full pricing is essential before signing anything – It pays to do your homework!

Furthermore, we believe that there is no excuse for third party sales companies not to be transparent with their pricing, however sadly this is not the case and we regularly see customers turn to us who are distressed and confused by contracts they have entered into. The lack of clarity is more akin to the energy sector before the industry was forced to make their charging totally transparent and easy to compare.

What does Transparent Payment Services look like and how do I make sure I get them?

At acceptcards®, our mission has always been to offer transparent, easy-to-understand solutions for you to successfully manage your business.

We make it clear from the start what your rates will be, including if there are any additional fees for certain transactions like Card Holder Not Present (Telephone Payments) or International card payment surcharges. We do this where possible by providing a like for like comparison taken from one of your previous statements showing line by line what you would have been charged if you had been using a different provider for those transactions. Our transparent and independent approach means that there are no hidden fees or surprising costs lurking in the shadows ready to jump out & reveal themselves upon receipt of your 1st invoice from the Merchant Services provider.

We are proud to be at the forefront of changing the Merchant Services sector for the better and the good news is, it is getting better but there is a long, long way to go.

Our CEO Richard Bradley has been an advocate for the Payments Industry to be regulated. A simple step that would be able to apply penalties, fines and in extreme cases close the companies who don’t adhere to the code of conduct, much like we’ve seen in the Energy and Telecommunications markets.

To find out who is the right Merchant Services provider for your business, with clear and transparent pricing, fully explained, please get in touch and let us show you what you can achieve.