Payment Facilitators iZettle SumUp PayPal

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.

Payment facilitators alternatives: iZettle, Paypal HERE, Square, SumUp

I. Quick recap: What's the point of PayFacs?

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.

Upsides of a payfac

  1. The set-up is fast. It takes maybe 15 minutes to get set up for your first sale and another 5 to import your stock.
  2. They charge a fixed rate. This means they absorb the wobbly bits of a normal payment rate, such as different costs for high-reward cards like Amex, or foreign cards.
  3. They eliminate contracts. As long as you have one of their manufactured readers, you can process payments as soon as you’ve got it set up. And you can stop processing whenever.
  4. They charge net rather than gross fees. Since the contract has gone, they charge you before the money enters your account, rather than at the end of the month. Smaller stores and market stalls tend to prefer this.
  5. They eliminated minimum processing fees. Hooray!
  6. You buy your card reader outright. This works out much cheaper than renting.
  7. They come with free basic EPOS software. If you want more advanced EPOS software, don’t worry – you can still use a payfac to process your payments, and with the right payfac you can integrate better EPOS software. (So the number of available integrations is a key thing we think about when choosing between them.)
Card Network (VISA, Mastercard)Customer BankAcquirer Your CustomerPayment FacilitatorYour Business Bank AccountYouThe Interchange


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.

II. Who are the PayFacs?

  • iZettle

    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

    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.

  • SumUp

    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

    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.

iZettlePaypal HERESquareSumUp
STARTS AT1.75%1.75%1.69%2.75%
GOES AS LOW AS1%1%1.69%1%
CARD NOT PRESENT2.5%2.5%2.94%3.4% + 3p
READERiZettle readerPayPal HERE readerSquare readerSumUp reader
COST£59 + VAT£39 + VAT£59 + VAT£62.50 + VAT

How do I access the 1% rates?

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 month.

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.

How big a factor is the epos?

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.


Find out what rate you should be on here

Think of integrations as “room to grow”

Nobly, Lightspeed, TouchBistro

What do you mean by “well integrated”?

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 business.

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.

Integrations on epos available through storekit

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 hello@storekit.com.

Comparison between iZettle, Sumup, Square and Paypal HERE integrations. iZettle has 11, Sumup has 5, square has 3 and Paypal HERE has 2.

V. What's next?

Understand Card Fees In 5 Minutes
Learn what you’re looking at when you read your payments bills.
Other ways of taking payments
Accept cards over the phone and by invoice.
Acquirers (+ISOs) WorldPay First Data Bluebird
When would an acquirer be better?
Card Networks, The Interchange and all that
The academic view: how do payment actually work?
When Can I Negotiate?
How to get on better rates than your mates
E-Commerce 101
Ready for the next frontier?
Find out about StoreKit