Payment Facilitator vs Merchant Account
A payment facilitator processes your card payments under its own master merchant account; a dedicated merchant account is opened in your business's name. SumUp (1.69%), Square (1.75%) and Zettle (1.75%) are facilitators: instant sign-up, flat fees, no monthly cost.
A dedicated merchant account, from acquirers such as Worldpay, Barclaycard Payments, Elavon or Lloyds Cardnet, involves underwriting and usually a monthly fee, in exchange for rates negotiated to your turnover. Below roughly £4,000-£5,000 a month the facilitator is usually cheaper; above it, the merchant account usually is.
Rates checked: August 2026
The structural difference, in plain terms
Every card payment must pass through a merchant account held with an acquirer. The only question is whose. A payment facilitator, sometimes called a PayFac or aggregator, holds one big account and boards you as a sub-merchant under it. You never meet the acquirer; you are a row in the facilitator's book. That is what makes sign-up instant and what makes the pricing flat: the facilitator charges everyone the same because it cannot practically price thousands of micro-businesses individually.
With a dedicated merchant account, the acquirer underwrites your business specifically: your turnover, sector, average transaction value and card mix. You get your own merchant ID, and the rate you are quoted reflects what your transactions actually cost to process. That is why negotiated pricing exists at all, and why it improves as your volume grows.
This one structural split explains most of the UK card payments market. It is the same divide we describe from the buyer's side in do I need a merchant account in the UK: pay-as-you-go flat rates on one side, negotiated acquiring on the other.
Side by side
| Payment facilitator (SumUp, Square, Zettle) | Dedicated merchant account (Worldpay, Barclaycard, Elavon, Lloyds Cardnet) | |
|---|---|---|
| Whose merchant account | The facilitator's; you are a sub-merchant | Yours, with your own merchant ID |
| Transaction fee | Flat: SumUp 1.69%, Square 1.75%, Zettle 1.75% | Negotiated, typically 1.2%-1.9% by turnover; lower for high volumes |
| Monthly fee | £0 | Typically £10-£60 |
| Underwriting | Minimal up front; risk checks happen as you trade | Full application before approval, typically 24-48 hours |
| Contract | None; pay as you go | Often 12-36 months; some offer rolling terms |
| Usually cheaper when | Card takings under roughly £4,000-£5,000 a month | Card takings above roughly £4,000-£5,000 a month |
Providers' published or typical advertised pricing, checked August 2026. Negotiated rates are quoted per business.
The crossover, worked through
Take £3,000 a month of card sales. On SumUp that costs £3,000 × 1.69% = £50.70, with nothing else to pay. For a merchant account to beat that, the negotiated rate plus the monthly fee would need to come in under £50.70, which rarely happens at this volume. The facilitator wins.
Now take £12,000 a month. Square's 1.75% costs £12,000 × 1.75% = £210. A negotiated 1.4% on the same volume is £168, and even after a £25 monthly fee the merchant account totals £193, saving £17 a month and widening as volume grows. Modern acquirers blur the old distinctions here: Dojo, for instance, sets up your merchant account with bespoke pricing typically between 1.2% and 1.9% depending on card turnover.
The honest summary: neither structure is better, they are priced for different sizes of business. Run both numbers at your own volume before choosing, or use our card machine cost breakdown as a starting point.
MerchantSwitch is a free comparison service; we are paid by providers when we successfully match a business. We are an introducer, not a lender or acquirer, and we are not regulated by the FCA.
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