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Sole Trader Merchant Accounts

Sole Trader

Many sole traders worry that their self employed status means they will find it difficult or even impossible to set up a merchant account but often their concerns are unfounded. If sole traders were really excluded from merchant accounts then bank and payment service providers would be considerably less profitable than they are. According to Companies House, around 63% of all businesses in the UK are sole traders.

If you run a small business and want to open a merchant account then the information on this page could help; to start comparing quotes straight away, you just need to fill in the form at the top of this page.

Comparing Merchant Account quotes with Approved Index is free, quick and easy and it could save you as much as 40%.

Let Approved Index help you find the best Merchant Account for your business.


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Compare Sole Trader Merchant Account Providers

Some small operation or self-employed business owners might be worried about opening a merchant account - often they think that their business is not large enough to warrant this kind of service; this is not the case though. Many merchant account providers welcome sole traders, with a range of provider types included.

If you have a good credit and trading history, as well as a promising future outlook then it should not be too difficult to find an account provider. As with larger businesses, theses suppliers will generally be looking for a safe investment for themselves, this means that the size of the business does not need to be relevant. Additionally, being a sole trader does not necessarily mean that your business is small, many self-employed business owners turn over a very healthy profit year-on-year.

The list below includes a list of just a few of the banks that accept sole traders, as well as a few other payment gateways services that are worth considering. Take a look further down the page for a little more information on the range of merchant account options available.

Starting a Sole Trader Merchant Account

As with other business types, there is a standard process that sole traders will need to go through to establish their merchant account. The application will require information about both you and your business to ensure that you are a viable candidate.

The list below includes some of the things that an account provider will need access to.

  • Your business accounts
  • Past and predicted turnover
  • Supplier details
  • Market information

This list does not include everything, but should give a good insight into what kinds of information a supplier will require. New businesses that cannot provide some of this historic data may be required to prepare other documents - in this case, for example, a thorough business plan may be needed to prove the sense in your operation.


Sole Trader Merchant Account Options

The table below includes a quick comparison of the range of self-employed merchant account options available; continue down to the full sections below for more detail.

OptionFeature
Small BusinessSmall business accounts can often be used by sole traders too; in both cases, the contracts are designed to cater to smaller volumes of sales and revenue.
High-RiskIf you don't quite qualify for high-street bank merchant accounts then you may want to look into high-risk providers.
BankMerchant accounts from reputable high-street banks are the most sought after option; fortunately, a number of UK banks offer these services.
Payment GatewaySome sole trader businesses do not require a full merchant account, they just need a way to take payments online - there a range of options available.

The sections below includes more information on each of the options listed in the table above.


Small Business & Sole Trader Accounts

Suppliers offer a range of merchant services for small businesses, and many of them are also suitable for sole traders.

Small business and sole trader account providers will offer contracts that reflect the requirements and volume seen in lower-volume or revenue operations; this means that they will be able to manage these operations effectively. With a quality merchant account, small businesses and sole traders can extend their operations and begin competing with other businesses, even with larger enterprises that usually dominate markets.

Small business and self-employed account providers can offer a range of features:

  • PDQ Machines
  • Online software
  • Financial assistance.

Speaking to suppliers is the best way to find a small business merchant account that suits your business needs.


High Risk Sole Trader Accounts

High risk accounts are sometimes required by sole traders that cannot prove their details enough for a regular account for one reason or another; in many cases, this is simply because the business owner has not been operating long enough to prove the success of their business. In other cases, this is because their credit rating or earnings are not high enough.

High risk sole trader accounts work in a very similar way to regular accounts; the differences come with the acceptance criteria and may also spread to include payment options. A sole trader may pay slightly more per transaction, for example, or else they might pay a slightly higher monthly fee.


High-Street Bank Sole Trader Accounts

Sole trader accounts from high-street banks are the most sought after option; generally speaking, they offer the most security and the best features. While some banks will permit sole traders to use a private bank account for their business, this is almost certainly unacceptable if you want to set up a merchant account, so your first requirement will be to open a separate business account.

If you have a business account with a high street bank then you could talk to your bank manager about setting up a merchant account. If they agree, then you will at least be able to compare their prices with other merchant account providers; if they refuse then you will have lost nothing.

As mentioned, these accounts are among the best options for any sort of business, including sole traders.


Payment Gateways for Sole Traders

Payment gateways are not the same as full merchant accounts, but they do offer a high-quality option for businesses looking to take payments online. Indeed, for many modern businesses, this is all that is required to be able to operate.

One of the easiest payment gateways for sole traders to set up is one with PayPal, however it is a little limited and expensive compared to other merchant accounts. While it is a fall-back option, it probably isn’t the best option.

The list below includes some of the other account providers.


Sole Trader Merchant Account Costs

As with any other merchant account, a sole trader service will come with certain payments and fees required. This section offers a brief insight into what you might expect to pay, both overall and from month to month.

It is important to bear in mind that these fees are not always concrete, and so you may find that your own quotes are slightly different.

The two main costs to expect with a sole trader account are the set-up fee and transaction charge:

  • Account Set-Up Cost - £70-£250
  • Transaction Charge - 1%-3.5%

The set-up fee and transaction cost will both be based on the value of your account - from the overall value of your business to the average cost of your products or services.

The prices listed above are typical but not necessarily concrete; to find out exactly how much you will pay, you should speak to suppliers today - fill in the form at the top of the page to get started.


Compare Sole Trader Merchant Account Options Today

It is important to shop around. Just because you are self employed doesn’t mean that you will be considered to be high risk, especially if you have been in business for a reasonable length of time and you have a healthy trading record and order book.

If you require some detailed information tailored to your individual sole trader business, please complete the simple quote form and we will get back to you today with free no-obligation quotes.

Comparing sole trader merchant account quotes with Approved Index is free, quick and easy, and it could save you as much as 40%.

Compare Sole Trader Merchant Accounts Free Today


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