How Does Payment Clearing and the Settlement Process Work in the UK?
Learn how payment clearing and settlement works, how the stages differ and what UK businesses should track when payments are in progress.
Merchant Payment Services: A UK Business Guide
Merchant payment services give UK businesses the infrastructure needed to accept customer payments by card, online, in person or through other digital methods.
This guide explains what merchant payment services are, how payment gateways, processors and merchant accounts fit together, the fees to compare and the questions to ask before choosing a provider.
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| With Wise Business, businesses can bill for their goods or services using payment links, invoices or QR codes. You can also receive payments using local account details in 8+ currencies and send money to suppliers in supported destinations. Currency conversions are at the mid-market rate with low, transparent fees. |
Note: Wise Business offers a free Essential plan for basic spending and transferring. If you need to receive money, set up direct debits, or generate invoices, you'll pay a one-time £50 setup fee to unlock the Advanced features.
Provider features, fees, eligibility checks, protections, integrations and timelines mentioned in this article may vary by customer, business type, application outcome, plan and country. Check each provider's website and terms and conditions for the most accurate and up-to-date information.
Wise services and features are not available in all regions, country and product restrictions apply. Visit wise.com to check availability, and for fee details and terms for your region, visit our pricing page for Wise Business.
Merchant payment services at a glance
| Term | What it means |
|---|---|
| Merchant payment services | The broad set of services that allow a business to accept and process payments, including cards, gateways, acquiring and point-of-sale tools. |
| Payment gateway | Technology that securely captures payment information and passes it into the authorisation process. |
| Payment processor | A service that routes card transactions among the parties involved in processing. |
| Merchant account | An account with an acquirer that receives card-payment funds before settlement. Some providers bundle this with processing and gateway services. |
| Acquirer | The merchant-side financial institution that supports card acceptance and settlement. |
According to the Government Crown Commercial Service's Payment Acceptance 2 guidance, payment-acceptance arrangements can include merchant acquiring, payment gateways, alternative payment methods, payment equipment and consultancy. A business may use an integrated arrangement or separate providers for different parts of the payment process.1
What are merchant payment services?
Merchant payment services are the tools and relationships a business uses to take customer payments. A provider may offer card processing, an online checkout, a payment gateway, a merchant account, card terminals, fraud controls, reporting, refunds and dispute support.
The exact package differs by provider. A small online retailer may need a hosted checkout and card acceptance. A shop may also need a terminal, staff permissions and end-of-day reporting. A business selling internationally may need relevant payment methods, settlement currencies and a plan for currency conversion.
How merchant payment services work
An approved payment can involve several parties. A provider may combine several roles, so the exact route varies.
| Party | Role in a card payment |
|---|---|
| Customer | Enters card details, uses a digital wallet or taps a card. |
| Merchant | Sells the goods or services. |
| Payment gateway | Captures and securely passes payment data for authorisation. |
| Payment processor | Routes transaction information through the payment chain. |
| Acquirer | Supports the merchant's card-acceptance relationship and settlement. |
| Card network | Connects the acquirer and card issuer. |
| Card issuer | Approves or declines the payment on the customer's side. |
The Government Crown Commercial Service's Payment Acceptance 2 guidance describes merchant acquiring as the regulated service that connects an organisation with payment networks for card and alternative-payment acceptance. It describes payment gateways as a service that enables payment acceptance, typically through a website.1
Merchant services, merchant accounts and payment gateways: what's the difference?
| Service | Main purpose | What to check |
|---|---|---|
| Merchant services | Umbrella term for payment-acceptance services. | Which elements are included and which need separate providers. |
| Merchant account | Holds card-payment proceeds within the acquiring and settlement process. | Application requirements, reserve arrangements, settlement timing and account fees. |
| Payment gateway | Provides the checkout or payment-data connection. | Website integration, checkout options, supported payment methods and security responsibilities. |
| Payment processor | Processes the transaction route. | Pricing structure, dispute support, payment-method coverage and reporting. |
Some businesses can access a bundled product. Others need a gateway that works with their existing acquirer or processor. Confirm the commercial and technical relationships before signing a contract.
Which payment methods can merchant services support?
Merchant services can support a mix of online and in-person payment methods. Common options include:
- Credit and debit cards
- Digital wallets, such as Apple Pay and Google Pay
- Bank payments and account-to-account options
- Buy now, pay later products
- Payment links, QR codes and invoices
- In-person card terminals and point-of-sale payments
Don't add every available option by default. Start with payment methods your customers are likely to recognise, then use checkout-abandonment, support and sales data to judge whether another method is worthwhile.
Merchant payment service fees: what should UK businesses compare?
Fees usually depend on the payment method, transaction type, business risk profile and service model. A quote can include a percentage of each payment, a fixed transaction element, recurring platform costs or hardware charges.
| Fee or cost | Why it matters |
|---|---|
| Card-processing fee | Often varies by card type, customer location and whether a payment is online or in person. |
| Monthly or platform fee | May apply for account access, reporting, gateway software or a plan tier. |
| Hardware cost | Relevant if you need card terminals, receipt printers or point-of-sale equipment. |
| Refund and dispute fee | Can affect margins and the workflow for customer-service teams. |
| Currency conversion and cross-border costs | Can apply when customer payment, settlement or operating costs involve another currency. |
| Contract and exit terms | Check minimum periods, notice terms and any termination charges. |
Merchant-service pricing can include transaction-based charges and may vary with a business's processing needs and risk profile. Check the provider's current price list and agreement before committing.
How to choose a merchant payment service provider
Use a provider comparison that reflects how your business actually takes payments.
| Decision area | Questions to ask |
|---|---|
| Customer journey | Does the checkout work on mobile, accept the payment methods customers expect and clearly show the total? |
| Sales channel | Do you need online checkout, payment links, invoicing, card terminals, marketplaces or a combination? |
| Technical setup | Is a hosted checkout enough, or do you need an API, plug-in or bespoke integration? |
| Fees | What are the card, platform, refund, dispute, cross-border, currency and hardware costs? |
| Operations | Who will manage refunds, failed payments, disputes, reporting and reconciliation? |
| International sales | Which currencies can customers pay in, where will money settle, and what happens if you convert it? |
| Future needs | Can the setup support new channels, countries, payment methods or a larger team? |
Avoid choosing purely on a headline card rate. A cheaper processing price may not compensate for poor reporting, limited payment methods or extra manual work.
What does a business need before applying for merchant services?
Requirements vary, but providers commonly review the business, its trading activity, website or sales channel, expected volume, refund policy and bank details. Higher-risk sectors or unusual payment patterns can prompt additional checks.
Prepare clear information about your legal entity, ownership, product or service, customer base and how you will fulfil orders. Review your website's contact, delivery, refund and privacy information before applying, especially if you sell online.
How can Wise Business support international payment operations?
Merchant services help customers pay at checkout. Once funds settle, the business still needs to manage the money, reconcile receipts and pay operating costs.
Wise Business can help eligible businesses accept customer card payments in 18+ major currencies, use payment links, invoices or QR codes, and manage money in 40+ currencies. It can also support local account details where available and payments to suppliers in supported destinations.
When a conversion is needed, Wise uses the mid-market exchange rate with low, transparent fees shown before you confirm.
Wise Business offers a free Essential plan for basic spending and transferring. If you need to receive money, set up direct debits, or generate invoices, you'll pay a one-time £50 setup fee to unlock the Advanced features.
With Wise Business, you can:
- 🌍 Send money to 70+ countries and pay overseas invoices at the mid-market exchange rate with low, transparent fees and no hidden exchange rate markups (product availability varies by region)
- 📥 Receive payments in 24 currencies and counting
- 💵 Get local account details for 8+ currencies, including USD and EUR, to let your customers pay in a currency they know and trust - convenience for them and peace of mind for you
- 💰 Hold money in 40+ currencies
- 🔁 Convert currencies anytime at the mid-market exchange rate with low, transparent fees
- ⚡ Use the batch payments tool to create and send up to 1,000 payments in a single transfer
- 👥 Run payroll and make international payments for up to 1,000 employees all over the world - including paying suppliers using local payment methods like ACH, SEPA, and Faster Payments
- 💳 Get business debit cards with 0.5% cashback for you and your team to keep track of team expenses and spend all over the world, with real-time visibility and categorisation. See full cashback terms and conditions
- 🏢 Manage cash in 55+ currencies across international offices from a single business account and move money between business accounts in seconds (exact speeds can vary depending on individual circumstances and may not be the same for all transactions)
- 🧾 Connect and sync every business transaction to your favourite accounting software, including Xero, Quickbooks, and more
- 🔐 Create your own payment approvals process to manage your team better with customised access for different team members, roles and permissions
- 📑 Create custom professional invoices and schedule invoice payments for future dates
- 📈 Earn variable returns on GBP, USD and EUR with Wise Interest (Growth not guaranteed. Your balance will go down in the event of a government default or interest rates going negative.)
- 🔗 Create payment links and QR codes to get paid easily (Card payment acceptance for new Wise Business customers is currently unavailable. Payment methods subject to eligibility and availability.)
- ⚙️ Automate payouts with the Wise API (comes with 24/7 customer support, a sandbox account to test integrations, API tokens, and clear documents on how to implement and make the most of our API)
Make the wise choice when selecting a business account for your domestic and global needs.
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Wise Interest disclaimer: Growth not guaranteed. Your balance will go down in the event of a government default or interest rates going negative. Taxes may apply. 3.32% variable rate on GBP is based on 7 day performance as of 05 Aug 2026. For full 5-year past performance and fund information, visit https://wise.com/interest. Investments are offered by Wise Assets UK Ltd. (FRN 839689)
Wise services and features are not available in all regions, country and product restrictions apply. Visit wise.com to check availability, and for fee details and terms for your region, visit our pricing page for Wise Business..
FAQs
Do I need a merchant account to accept card payments?
Not always as a separate product. Some payment providers bundle acquiring or merchant-account functions with their payment service. Ask where card funds will settle and whether you need a separate agreement with an acquirer.
What's the difference between merchant services and a payment gateway?
Merchant services is a broad term for the payment-acceptance package. A payment gateway is one component that supports payment acceptance, often through a website. The Payments Vision Delivery Committee's guidance describes payment service providers as entities that provide payment services to end users or other participants, subject to applicable requirements.2
Can merchant services support in-person and online payments?
Yes, depending on the provider. Some offer a combination of online checkout, payment links and physical card terminals. Check the channels and payment methods included in the quote.
How long does merchant-service approval take?
There isn't one standard timeframe. Approval can depend on the provider's onboarding checks, your business type, expected sales volume and the information you submit. Check the provider's current onboarding guidance before applying.
What should I check before signing a merchant-services contract?
Check the full fee schedule, settlement timing, contract term, termination terms, refund and dispute processes, payment-method coverage, technical integration and customer support arrangements.
Can Wise Business replace a merchant account?
Wise Business can support eligible businesses with card-payment acceptance and multi-currency money management, but the right arrangement depends on your sales channel and payment needs. Review its available card-payment features and the role of any merchant account, processor or gateway in your setup.
Sources:
- Government Crown Commercial Service: Payment Acceptance 2
- Payments Vision Delivery Committee: Roles and Responsibilities in the Future Retail Payments Ecosystem
Sources last checked on 18th September 2026
*Please see terms of use and product availability for your region or visit Wise fees and pricing for the most up to date pricing and fee information.
This publication is provided for general information purposes and does not constitute legal, tax or other professional advice from Wise Payments Limited or its subsidiaries and its affiliates, and it is not intended as a substitute for obtaining advice from a financial advisor or any other professional.
We make no representations, warranties or guarantees, whether expressed or implied, that the content in the publication is accurate, complete or up to date.
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