A merchant account is an acquiring relationship in your own business's name, underwritten for your trade and your turnover. An aggregated account, which is what most payment apps offer, puts you under the provider's own acquiring instead. The first gives you your own pricing and more control; the second opens in days and asks fewer questions.
Merchant account options for a UK small business: which one you have
If you signed up online, took payments the same week and never saw an underwriting decision, you almost certainly have an aggregated account. If a provider asked for accounts, projected turnover and a merchant category code and gave you a merchant ID, that is a merchant account. Paymentsense's pricing tool asks for the merchant category precisely because it is quoting the second kind.
Merchant account fees, set against a blended rate
Aggregated accounts advertise a single blended rate and no monthly fee: SumUp at 1.69%, Zettle and Square at 1.75%. Merchant accounts are quoted per business and typically carry a minimum monthly service charge, authorisation fees and a term. Lloyds Cardnet prints its minimum monthly charge; most of the others quote it privately.
When a small business merchant account is worth the paperwork
Above roughly 50,000 pounds of annual card turnover, bespoke pricing usually beats a blended rate, which is exactly the threshold Tyl by NatWest names on its own page as the point where it stops publishing. Below it the aggregated accounts are hard to beat on price and impossible to beat on speed of opening.
Questions people ask about merchant accounts
Do I need a merchant account to take card payments?
No. Aggregated accounts from payment apps let you take cards without one, which is why most small UK businesses now start that way. A merchant account becomes worth having as volume grows and bespoke pricing beats a blended rate.
How long does a UK merchant account take to open?
Underwriting typically takes days rather than minutes because the provider is assessing your trade and turnover. Aggregated accounts from the apps here usually open the same day, subject to identity checks.
Can I have a merchant account without a business bank account?
Some providers settle into an account they open for you, which is how Tide, Teya and Revolut Business work. Traditional acquirers settle to a UK business bank account in the same name as the merchant, so you will need one.
How do I make merchant account comparisons on equal terms?
Ask every provider the same questions and get the answers in writing: the in-person rate for UK consumer debit and credit, the rate for commercial and non UK cards, any authorisation fee or minimum monthly charge, the term and the early termination charge, when money settles, and who owns the hardware if you leave. Aggregated accounts print most of this on their own pages; a merchant account is quoted per business, so supply the same turnover and average sale to each one.