Our in-depth guide to SME payments
Is receiving a payment about to get more expensive?
Crezco, one of the last ‘free’ bank account to account payment facilitators has announced the end of its free product. Their Account Receivables product enables a business to harness the power of a ‘Pay Now’ button to initiate a bank payment from their customer, all with no fee. It is quite a simple user interface and perfect for busy small businesses.
The trader creates their invoice using supported accounting software and it is sent to their customer. The customer views the invoice and clicks the ‘Pay Now’ button, selects their bank and is then taken to their banking app or log in screen. All the payment details, references and payment amount is populated automatically, it’s then down to the customer to verify the payment and it’s all done.
As the payment is processed via the UK Faster Payment system, the money is usually transferred in a few minutes. In many cases the trader is notified of the payment and their invoice marked as paid. Similar products also exist from a handful of other payment firms, but most had fees attached. Crezco was different, its simple bank to bank payment product was free, although they did have a number of other plans with value added extras or foreign exchange services.
So, from February 2026 anyone wishing to use the most basic payment tools that Crezco offer will be looking at a £12 fee, for many that might just be a step too far. Especially for small businesses and charities who have become to rely on the ease of Crezco bank to bank payments.
Are there any other choices?
There is a large array of players in the payment market, but for the smaller business it’s a fairly limited field. The options are further limited unless you want to write code and use APIs from your own website. Let's have a look at our pick of the payment market, along with what you need to know.
Crezco – app.crezco.com
Offering simple unlimited UK account to account payments using the Faster Payments system. Supported by most UK banks and integrates with major accounting platforms like Xero. In most cases payment confirmation is received by email or via your accounting software. You can customise the payments and receipts pages with your own logo, providing extra reassurance for your customers.
Payments are free although a £10+VAT monthly charge applies for the Collect Plus plan. Other plans include the ability make outbound payments, schedule multiple payments such as payroll and access to FX services.
Crezco also offer the ability to pay payable invoices using a credit or debit card (for a fee), this can be useful for paying invoices where the merchant doesn’t accept card payments themselves.
Stripe – stripe.com
Probably one of the most well-known online card payment provider for small and medium sized businesses. Best known for simple straightforward card payment facilities, most of which can be used out the box with no programming required.
Stripe integrates with most accounting software, many online shopping websites and quite a few ad-hoc platforms which have a payment need – such as community hall booking software. Stripe also offers access to it API and has an extensive library of developer documentation and sandbox facilities to help test payments & workflows.
They have also captured a large number of payment methods, from simple credit & debit cards to Buy Now Pay Later providers and BACS Direct Debits. It would be fair to say they are probably the most extensive acquiring platform available to the small business.
Pricing is a little more difficult to work out, especially if your margins are tight and you are in a price sensitive market. You also have to factor in greater risk with card payments, either from fraud or genuine customer disputes which often favour the payer.
Standard Credit & Debit card payments are charged at 1.5% of the final sales price plus 20p, with premium cards slightly higher at 1.9% + 20p. BNPL starts at 4.99%+35p, with bank payments between 0.5 to 1% (up to a fee cap) depending on the method used. Realistically this means that you will lose at least £1.70 for every £100 sale made.
Of course, these fees will need to be factored into you your pricing models and remember that you cannot add additional card payment fees to consumer purchases. You’ll also need to consider your exposure to fraud and some of that will be from known and trusted customers.
GoCardless – www.gocardless.com
GoCardless has been around for a few years now, its original ethos was that its fees were cheaper than accepting card payments. To a certain point that is true, however some business may find in-person card payments might be cheaper than the fees GoCardless charge. They are also one the very few third party providers that offer access to the Direct Debit system with very little technical knowledge required.
GoCardless offer a number of bank account to account payment solutions, from instant bank payments, variable Direct Debits or reoccurring Direct Debits. Their fees are also quite straightforward from 1% +20p per transaction. Clearly with reoccurring payments the fixed payment fee element could eat into your profit if the payments are small but regular. For instance, £60 collected over 12 months will cost from £3.60, but collected in one payment it’s from just 80p. Monthly payments in this example lose you 6% of your sale.
Other than instant bank payments, GoCardless processes payments via the Direct Debit system, which provides protection for customers against errors. However, it also gives the business an exposure to both payment fraud and dispute risk. Although there are tools to manage these risks, you’ll still need to factor this into your business model.
SumUp – www.sumup.com
Another card processing provider that has been around a few years now, and very popular with micro-businesses for in-person payments. They do have ‘add-on’ options for purchasing equipment, online store transactions and a business bank account. In a similar position to Stripe, they also have API access for those willing to code their own websites & stores.
Their pricing can be a little difficult to work out, although their pay-as-you-go no commitment model offers a 1.69% in-person card transaction fee, but with a hefty 2.5% fee for online payments. That said, they are fixed prices that you can factor in to your sales. Although you don’t need to rent a card machine, the transaction fees levied may start to add up as your business grows.
SumUp want to operate your whole Point-of-Sale, but you may find this a little intrusive, especially if you’re not entirely shop based. Those businesses who also edge into VAT registration & MTD for ITSA may find the reporting quite complex and difficult to understand. This comes even more complex should you take advantage of SumUp’s Cash Advance feature. This is a straightforward loan feature which charges an upfront fee, then payments are taken as a percentage of sales. It’s really important that you understand how to account for this properly, especially if you are VAT registered.
Other options –
Of course, there are the more traditional routes from receiving payments.
Bank transfers
Often still called BACS payments even though there are multiple systems in use now, generally UK payments will come in three different options
Faster Payments – limited to the value set by the payee bank, although usually around the £5000+ mark. These payments usually arrive within minutes but can take up to 24 hours should a ‘fraud check’ be required.
CHAPS (Clearing House Automated Payment System) – a same day payment system usually for transferring large amounts of money securely. Very occasional used for smaller amounts where a same day payment is important.
BACS (Bankers' Automated Clearing System) – often used between businesses or where a number of payments are being made to several payees at the same time. A delay of 3 working days is common on these payments, therefore a transfer made on day 1 will not be received until day 3.
In all the above cases, once the money is received it cannot be taken back unless fraud is suspected by the receiving bank. There are a number of scams circulating using the ‘bank transfer’ payment claim – not least the fake payment confirmation screen shown to the receiver. If you are expecting a payment to arrive, always check your own bank rather than relying on a customer ‘proof’ of payment.
Some business banks will charge for payments received or limit any free banking to a number of inward payments per month. If you’re a business that relies on small, frequent payments then it’s always worth checking your own bank’s charges.
Card Acceptance
We’ve covered some of the newer market entrants, but there are many others in the UK and beyond. Go back 20 years or so and the provider would have been the large high street banks or card providers themselves. Those from a slightly older generation will recognise terms such as PDQ, Access, Switch & Delta. These referred to the physical point of sale equipment and customer cards of yesteryear. Today, there are numerous providers of equipment although many are simply alternate brands of the same organisation. Equally many of these brands also use different acquirers to provide the card processing on their behalf.
Many of these providers and acquirers will offer bespoke pricing, some from as little as 0.4% although this is reserved for high turnover transaction businesses. Many of these will want the business to be already established and require monthly equipment rental from around £15 per month. A very limited number of providers will also provide online sales abilities or traditional mail order and telephone sales transactions but at higher fees and risk.
Cash
Unless you are a very small business, you’ll be familiar with the cash problem. Banking cash can be difficult if not now impossible to bank. A handful of business banks don’t have the option to pay in cash, they have no branches or third party handling agreements.
Of those banks that are still accessible, banking fees of around 1% plus the fact you have to find somewhere to pay the cash in, all lead to a willingness to become a cashless business. We’ve all stood in that queue willing it to move along quicker! Paying bills, suppliers and staff in cash is also more difficult now, many have the same problem of what to do with it.
Businesses dealing in large amounts of cash will also come under more scrutiny from banks and professional advisors, especially where the paperwork isn’t up to scratch!
Finally, some notes about fraud
Many businesses and retailers, especially those operating online, are finding customers increasingly using chargebacks to force refunds from the business.
Whilst there is always a risk to doing business at arm’s length, it’s getting even harder now to guard against fraudulent transactions. Far too many small businesses are unaware of the risk they run every time they sell an item and post it off to a customer. As a B2C retailer, not only have you a product responsibility, but also a delivery and support one too.
It might be you accept the risk of using an unsigned, economy delivery service as the profit margin or item value doesn’t support anything more. However, you might want to take a more risk adverse stance and require live proof of delivery, not just dumped on a doorstep. You don’t accept delivery to alternate addresses other than the bill payer, and certainly never allow address changes after the sale!
A customer paying by card can, for many reasons, ask their bank for the money back on an online order. In turn, your provider will debit the money from you and ask you for proof you did the right thing. This can be as simple as the parcel being left on the doorstep and the customer claiming it never arrived. This type of first party fraud is dramatically increasing, as many online sellers' forums will tell you.
Direct Debits have a similar chargeback mechanism, although a little more involved for the customer to initiate. As Direct Debits usually cover service businesses rather than products, it’s likely you’ve already discussed this with your customer, or at least have an inkling they might ask for money back.
As a business you have to balance up the cost of your sales security and administration with the profitability of your products. In a lot of cases, clearer terms and conditions, order confirmations or e-signed orders will help lower the fraud risk from organised parties and opportunists.
Our advice is making use of your business advisors; we can help signpost you to products and services that will help reduce your risk. This is one such service that we offer to our clients.
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info@hippey.co.uk
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