Barclays Merchant Services Review 2019

Barclays Merchant Services Review 2019

The vast majority of high street banks will offer merchant services to their SME customers and Barclays is no different.

However, you might look at Barclays and wonder how much support a large multinational bank is really willing to offer to smaller SMEs. The answer might surprise you.

Barclaycard, a division of the larger bank Barclays, has a wide range of services and products, including merchant accounts, PDQ machines and payment gateways, and they match up well compared to other products in the market.

In this review, I’ll give you a brief overview of Barclays before evaluating its products, pricing and service. Let’s get started.

 

What is Barclays?

Barclays is a British investment bank and financial services company founded 327 years ago in 1690. (Yes, really!)

Despite positioning itself as a large multinational bank, Barclays does offer support to small- and medium-sized businesses.

Usually, high street banks operate by partnering with an established card processor and reselling their services. RBS used to resell Worldpay, HSBC resells Global Payments, Santander resells First Data and so on.

Barclays, however, is the exception as they sell their own merchant services through Barclaycard, a dedicated payment service provider subdivision. (Although whether this continues remains to be seen.)

 

Barclays Merchant Services

Barclays offers a wide range of services, covering everything from in-store card payments and payment gateways to eInvoicing and virtual terminals.

Below I’ve picked out some of the most popular services and the most important features.

  • Merchant Account: Unfortunately, Barclays is fairly strict with their merchant accounts so high-risk businesses, startups and other small businesses may struggle to qualify for an account
  • PDQ Machine: If you operate a bricks-and-mortar business, you will probably need a PDQ machine to accept payment from your customers. The good news is that Barclays offers a wide range of machines, including countertop PDQ machines, portable PDQ machines and mobile PDQ machines.
  • Mobile Card Readers: If your business is very small or your turnover is irregular, you might want to investigate Barclays pay-as-you-go card reader, Barclaycard Anywhere. Mobile card readers will charge you a bit more to process payments but you won’t have to deal with monthly rental fees or long-term contracts.
  • Online Payment Gateway: For online businesses, Barclays offers a product called Web Payments. This is essentially just a payment gateway and operates like any other one. Its fees are fairly competitive.
  • Virtual Terminal: Finally, Barclays offers a virtual terminal. A virtual terminal works just like a card reader but you type in the payment details instead of plugging it in. Virtual terminals are designed to take over-the-phone orders and mail orders.

 

Barclays Merchant Services Pricing

Barclays, like all high street banks, aims to offer its business customers a full suite of merchant service products so they aren’t forced to go elsewhere. Through its Barclaycard brand, merchants can purchase everything from PDQ machines and payment gateways to merchant accounts and mPOS devices.

In the next few sections, we’ll take a look at each category of merchant service—PDQ machines, mobile POS devices and payment gateways—and will discuss what Barclaycard has to offer.

 

Card Machines

All brick and mortar businesses need some way to take debit and credit card payments. Usually, that means a card machine—also called a card terminal, PDQ machine or Chip & PIN machine. There are three main types of card machine: desktop, portable and mobile. Here’s a quick overview of what each type of card machine does.

  • Desktop card machine: These are the most common sort of card machine and you probably see dozens on a daily basis. They’re perfect for businesses with a fixed checkout and as they are usually physically connected to the POS, although modern machines tend to have WiFi and Bluetooth support as well.
  • Portable card machine: These card machines connect to a base station via Bluetooth or WiFi and are powered by a battery. This lets you take payments away from the base station. They’re useful for businesses that take payments throughout their premises. For example, bars and restaurants.
  • Mobile card machine: Mobile card machines use the mobile telephone network (GPRS or GSM) to stay connected outwith a fixed business location. In theory, this means you can use a mobile PDQ machine to take payment anywhere in the country. These card machines are good for tradesmen, debt collectors, market traders, travelling salespeople and so on.

Below I’ve summarised Barclaycard’s card machine options. Unfortunately, they don’t publish their transaction costs online so you need to call up and deal with a salesperson.

 

ProductMonthly Rental FeeContract LengthStandard CostsTransaction Costs
Desktop card reader with separate PIN pad£15 + VAT18 monthsSet-up: £150

Cancellation: £125 + VAT

Authorisation: £0.03

Chargebacks: £9.00

Refunds: £0.30

Depends on transaction volumes.
Desktop card reader with integrated PIN pad£15 + VAT18 monthsSet-up: £150

Cancellation: £125 + VAT

Authorisation: £0.03

Chargebacks: £9.00

Refunds: £0.30

Depends on transaction volumes.
Portable card readers£20 + VAT18 monthsSet-up: £150

Cancellation: £125 + VAT

Authorisation: £0.03

Chargebacks: £9.00

Refunds: £0.30

Depends on transaction volumes.
Mobile card readers£25 + VAT18 monthsSet-up: £150

Cancellation: £125 + VAT

Authorisation: £0.03

Chargebacks: £9.00

Refunds: £0.30

Depends on transaction volumes.

 

Mobile POS Devices

The fourth kind of card machine is something called a mobile point of sale (mPOS) device. These are pay-as-you-go devices that pair with an app on a smartphone or tablet, allowing small merchants to accept payments without signing up to expensive multiyear contracts.

Barclaycard introduced the Anywhere in 2015 after seeing the success iZettle, SumUp and Square were having in the market.

A few years ago, Barclaycard’s pricing for the Anywhere made me wince. They charged £60 + VAT for the reader and 2.6% on every transaction. Compared to industry leaders like iZettle and Square, the Anywhere just didn’t make commercial sense. Barclaycard seemed to realise this and both the price of the reader and the payment processing cost. Here’s how the Barclaycard Anywhere stacks up against the industry leaders today.

 

Barclaycard Anywhere

Barclaycard Anywhere

iZettle

iZettle

SumUp

SumUp

One-Off Fee£29 + VAT£29 + VAT£29 + VAT
Transaction Fee1.6%1.65%1.69%

 

As you can see, the Anywhere is very reasonable, costing you £29 + VAT, which is roughly the same as the iZettle and SumUp devices. Barclaycard then takes 1.6% on each transaction, which is the lowest fixed processing fee on the market. SumUp comes second with a 1.69% fee.

In terms of the device itself, Barclaycard uses a third-party reader from Miura called the M010. It’s the same reader used by Shopify, PayPal and the original iZettle. It’s a great little device, albeit a little dated.

One final thing to think about is the brand name. Some merchants believe that a Barclays branded card reader makes a more professional impression. That, however, is a judgement you’ll have to make for yourself.

 

Online Payments

So far we’ve really only discussed in-store, face-to-face payments. If you’re an eCommerce merchant, you’re probably wondering what Barclaycard has for you. For online payments, Bayclaycard offers a service called Web Payments, which is essentially just a payment gateway.

Here is what you can expect to pay.

 

ProductMonthly FeeCost per Additional TransactionTransaction Costs*
Web Payments£20.00 (includes 350 transactions)£0.10Debit: 0.80%

Credit: 1.71%

Visa Business Debit: 0.80%

Commercial: 2.05%

Stripe£0.00£0.00Credit: 1.4% + 20p

Debit: 1.4% + 20p

* Transaction costs for a business turning over £40,000 per year with all £40,000 taken on personal cards. The average transaction value was £15. Correct as of 2018.

As you can see, Barclays offers a competitive rate for transaction costs. However, the monthly fee might put off merchants with irregular or unpredictable monthly turnovers.

 

Barclays Merchant Services Reviews

Reviews are a little bit thin on the ground for Barclays Merchant Services with no presence on TrustPilot, Feefo or any other mainstream review platform. (While there are reviews, they mostly refer to consumer products like credit card.)

After reviewing business forums and communities, I found a few posts critical of the service. However, most referred to Barclays’ strict application process rather than the service itself.

 

Barclaycard Fee Increases

Barclaycard, like all merchant service providers, has a history of steadily increasing its pricing. Here is a quick overview of fee increases that we have written about.

 

2015

Barclaycard was one of several merchant acquirers to increase its fees in 2015. Barclaycard wrote to its merchant services customers advising them of fee increases due to kick in on 1st October 2015. We can always tell when merchant acquirers undertake wide-ranging re-pricing because there is a significant spike in our traffic! When Barclaycard informed their customers of their price hike, our traffic doubled!

Barclaycard Increase Aug 15 Part 1

What has Barclaycard done?  Like the rest of the market, they have now switched their debit card pricing from pence per transaction to a percentage of the transaction value.  Barclaycard has cleverly waited until all other merchant acquirers had changed their pricing to gauge customer reaction and as their perception was that not many merchants switched, they have done likewise.

Barclaycard has always priced non-secure transactions well above market rate: 0.85% for both debit and credit. Most other suppliers price non-secure below 0.5% whilst many only pass on the interchange differential.

Barclaycard Increase Aug 15 Part 2

The recent changes from Mastercard (effective from 1st April 2015) levelled the playing field as there is no additional interchange cost on MasterCard consumer credit cards for non-secure transactions. The 0.85% fee from Barclaycard is pure profit for these cards and the profit mark-up on other common card types is significant.

Note this information may not be representative of Barclaycard’s current service. Please contact Barclaycard directly for up-to-date pricing information.

 

 

Find Your Next Merchant Services

If you are looking for new merchant services or to replace your existing merchant services, you could do a lot worse than Barclays.

However, I always recommend that merchants compare merchant services to see what’s actually on offer before they decide on a provider. If you are choosing a provider without researching the market, you simply can’t know whether you’re getting a good offer, a bad offer or something in between.

To see what payment options are available to you, click here to go to our comparison engine.

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