This is the funky new generation of payments and EPOS companies. They’ve got sexy card readers, no contract, free EPOS software, and a fixed rate of payment processing.
This chapter will help explain what payfacs are, what they do, and how you can choose between them.
Payfacs first appeared in 2009. They’re a way of accepting card
payments targeted at smaller merchants.
Remember, you have a choice between a payfac or a direct relationship with an acquirer, set out in chapter 1.
If you have a high average transaction size or a high turnover a
payfac might not be for you.
If you’re turning over enough that your rates are cheaper than their starter rates, they will reimburse you the difference every so often. So if you qualify for a 1% rate with iZettle, they will charge you 1.75% and then based on your end-of-month turnover they will deposit the extra 0.75% into your account at the end of the month.
iZettle were the first payfac to launch in Europe! This means that iZettle are the market leader here in the UK, and have a large number of integrations – they can work with lots of different kinds of EPOS software. They’re a fantastic choice, and usually the cheapest.
Square were the first payfac ever but took slightly longer to arrive in Europe. With their characteristic “square” card readers, Square is the most stylish payfac. Its native EPOS software is also great for free software. Fun fact: Square was founded by the guy who founded Twitter, Jack Dorsey.
At very low processing volumes, SumUp is the cheapest – so if you’re turning over a very small amount, Sum Up could be for you. It’s a great choice, but its EPOS is a little more basic than iZettle or Square’s software.
PayPal Here is certainly a respectable EPOS choice – it’s owned by the PayPal corporation so plugs into their other products. But remember, this isn’t PayPal’s main product – or even their main EPOS product, since they’ve recently bought iZettle. We find their rates to be a little more expensive at low volumes.
|GOES AS LOW AS||1%||1%||1.69%||1%|
|CARD NOT PRESENT||2.5%||2.5%||2.94%||3.4% + 3p|
|THEIR EPOS||BASIC||BASIC||VERY BASIC||VERY BASIC|
|INTEGRATIONS WITH BETTER EPOS||MANY||SOME||SOME||FEW|
|COST||£59 + VAT||£39 + VAT||£59 + VAT||£62.50 + VAT|
|DISCOUNT||AT ANY GIVEN MOMENT, STOREKIT HAS A DISCOUNT ON ONE OR MORE OF THESE CARD READERS. TO ACCESS THE DISCOUNT, CALL ON 0203 874 1470|
The 1% rates are reserved for larger merchants. The more you process,
the cheaper your rates will be. Payfacs are generally prepared to go
below the starting rate when you process volumes of £6K or more per
Different payfacs used to have a published sliding scale which would take place automatically. But that sliding scale was confusing – so the only payfac which still has their better rates published is PayPal Here. That can be accessed here.
Other payfacs will usually negotiate if you say you want a lower rate.
Quite a big factor! EPOS is the beating heart of your business, so if you’re choosing to use their free EPOS software, then we’d probably recommend going for iZettle or Square over Sum Up and PayPal Here, which are more basic.
GET OFF THOSE HEADLINE RATES
Find out what rate you should be on here
Think of integrations as “room to grow”
Generally, people figure out their EPOS software, payment processing,
and EPOS hardware in one go. An EPOS system is your till, and EPOS
software is the software that allows you to make orders, manage
inventories, and do all those things that help you manage your
This guide is designed to talk about payments , but the decisions you make here do affect what software you can use.
We find that most first-time sellers go for the free basic software which comes with a payment facilitator.
But second-time merchants, or merchants looking to upgrade, are much more likely to go for sophisticated software, which costs – even if they continue using their payfac for payments. So if you grow out of the free EPOS software, you need your processing to integrate with whatever you replace it with.
If you’re building a whole EPOS system we’d generally recommend doing EPOS software first and then coming to payments. But a well-integrated payment processor is a good place to start – because it gives you lots of options.
We think of it as room to grow.
This isn’t an exhaustive list of EPOS systems – just the most popular ones listed on our website. If you have EPOS you’re considering and you want to check what payments would work best, try firstname.lastname@example.org.