Card acceptance is a commoditised market

UK card acceptance for SME’s is commoditised – the product and service is virtually identical everywhere, however cost is not. Card acceptance services (or merchant services) used to be solely provided by high street banks, but now can be provided by ISO’s (“Independent Sales Organisations) who partner with banks.  When selecting your supplier, you should consider the ISO’s – they are significantly cheaper and the product and service is identical to what you would buy from a bank (see Who is who in card processing).

The SME card acceptance proposition is virtually identical from any supplier, whether a bank or an ISO :

Merchant Accounts

Acquiring (provision of a merchant account) can only provided in the UK by a limited number of card scheme members.  No matter who you contract with or who the helpful sales person works for, they are all re-selling a merchant account product from one of :

  • Barclays
  • Lloyds/HBOS
  • HSBC
  • WorldPay (formerly RBS)
  • Santander Group
  • AIB
  • First Data

ISO’s will partner with one of these card scheme members to provide merchant accounts.  So if you buy your card processing services from Annecto or Consolis (leading ISO’s) then the merchant account and the transaction processing is provided and performed by WorldPay in exactly the same manner as if you had bought from WorldPay directly.  The same applies to all other ISO’s in the UK market and any payment gateway which provides an internet merchant account – it will be from one of these card scheme members.

Transaction processing platforms

Transaction processing infrastructure used to be owned by the acquiring banks but most are now out-sourced to US technology companies.  No matter who your merchant account supplier is, your transactions are processed by the technology platform of one of :

  • First Data (for HBOS and AIB)
  • Lloyds
  • Global Payments (for HSBC)
  • Elavon (for Santander Group)
  • WorldPay (for RBS and for WorldPay itself)
  • Barclaycard (for Barclays)

Chip and Pin Terminals

All have virtually identical features and functionality.  The UK terminal market is dominated by 3 manufacturers :

  • Veriphone
  • Ingenico
  • Spire

No matter who you contract with (ISO or bank), they will all tell you they have the best terminals but they are almost all selling the same product from the same manufacturers.

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