PayPal POS Merchant Services UK Review 2026: Fees, Features, Card Readers & Merchant Account Alternatives Quick answer
PayPal POS, formerly known as Zettle by PayPal, is a pay-as-you-go point-of-sale and card payment solution for UK small businesses.
It is best for small retailers, sole traders, cafés, market traders, mobile sellers and businesses that already use PayPal and want a simple way to accept in-person card payments.
PayPal POS is not a traditional merchant account. It is a payment service provider, which means PayPal handles the processing, risk checks and settlement rather than giving your business a dedicated merchant account.
PayPal POS charges 1.75% for card and contactless payments in the UK, with no monthly fee for its core POS software. Manual card entry and payment links cost more.
PayPal POS is a strong entry-level option for smaller businesses, but it can become expensive at scale compared with merchant account providers such as Worldpay, Barclaycard, Elavon, Tyl by NatWest, Dojo and TakePayments.
Compare PayPal POS with merchant account providers to see whether your business could get lower card processing fees.
Contents
Paypal POS Fees
Benefits of Paypal POS
Downsides of Paypal POS
Paypal vs Merchant Accounts
Our Verdict on Paypal POS
How do we work?
Transparent, impartial, and data‑driven reviews made by a team of expert humans, never AI generated – here’s exactly how Compare Your Business Costs helps you find the best deals from trusted UK providers: click here
Authored by: Ally Cox (Business Technology & B2B Services Specialist 10+ Years’ Experience)
Reviewed by: James Ward (Telecoms Specialist, 12+ Years Experience)
Last Updated: July 2026
PayPal POS at a glance
Category
Former name
Zettle by PayPal
Best for
Small businesses, PayPal users, mobile sellers, market traders and low-volume in-person payments
Provider type
Payment service provider, not a traditional merchant account
In-person fee
1.75% for card and contactless payments
Manual card entry
3.4% + 20p per transaction
Payment links
2.9% + 30p for PayPal payments
Monthly fee
Hardware
PayPal Reader and PayPal Terminal options
Setup speed
Usually quick compared with traditional merchant accounts
Main strength
Simple pricing, PayPal ecosystem and no monthly software fee
Main drawback
Flat fees can become expensive as turnover grows
Alternatives
Square, SumUp, Dojo, Tyl, Worldpay, Elavon, Barclaycard, TakePayments, Clover
Is PayPal POS right for your business?
Choose PayPal POS if…
You already use PayPal
You want a traditional merchant account
You want simple pay-as-you-go pricing
You process high monthly card turnover
You need a small business card reader
You want negotiable card processing rates
You sell at markets, events or pop-ups
You need advanced EPOS or hospitality features
You want no monthly POS software fee
You want funds settled directly into a bank account structure
You take low to moderate in-person payments
You run multiple locations or complex operations
You want quick setup
You need lower rates as your business grows
Key Takeaways
Zettle by PayPal is now called PayPal POS.
PayPal POS is a payment service provider, not a traditional merchant account.
PayPal POS is best for small businesses, PayPal users, sole traders, mobile sellers and low-volume in-person payments.
PayPal POS charges 1.75% for UK card and contactless payments.
Manual card entry costs 3.4% + 20p per transaction.
Payment links using PayPal payments cost 2.9% + 30p.
There is no monthly fee for the core POS software.
PayPal POS can be quick and easy to set up.
Flat-rate pricing is simple, but it can become expensive once card turnover grows.
Businesses taking regular or high-volume card payments should compare merchant account providers.
Alternatives to compare include Square, SumUp, Dojo, Tyl by NatWest, Worldpay, Elavon, Barclaycard, TakePayments and Clover.
Compare PayPal POS against merchant account providers before choosing your payment setup.
Need a merchant account or card machine? This quote service is best for UK businesses that want to take card payments using:
a merchant account
card reader
countertop card machine
portable PDQ machine
mobile card terminal
Chip and PIN machine
contactless payment terminal
EPOS-integrated card machine
virtual terminal
payment gateway
It is not the best fit if you only need:
a personal PayPal account
one-off online payment links
casual personal payments
a consumer banking app
general advice without business card processing
Compare merchant account and card machine quotes
Free quotes • No obligation • Compare leading UK providers
What Is PayPal POS (Formerly Zettle)?
PayPal POS (previously Zettle) is a payment facilitator, meaning:
You don’t get a dedicated merchant account
PayPal manages processing, underwriting and risk
You can start taking payments quickly
👉 This makes it fast and easy to set up, but less flexible than traditional merchant accounts.
Is PayPal POS the same as Zettle? Yes. Zettle by PayPal is now PayPal POS.
Many UK businesses still search for Zettle, iZettle or PayPal Zettle because those names were widely used for years.
However, the current PayPal point-of-sale product is PayPal POS.
The important thing for buyers is that the product still sits within the PayPal ecosystem and offers card readers, terminals, point-of-sale software and payment tools for small businesses.
Is PayPal POS a merchant account? No. PayPal POS is not a traditional merchant account.
It is better described as a payment service provider or payment facilitator.
This means:
you do not usually get a dedicated merchant account in the traditional sense
PayPal manages payment processing
PayPal handles risk checks and underwriting
payments are processed through PayPal’s system
setup can be faster than a traditional merchant account
pricing is usually simpler
rates are not usually negotiated in the same way as merchant account rates
This can be good for smaller businesses that want fast setup.
It may be less suitable for established businesses that want custom rates, merchant account control or lower fees at higher turnover.
Paypal POS Fees
Payment type
Card and contactless payments
1.75%
Manual card entry
3.4% + 20p
Payment links using PayPal payments
2.9% + 30p
Core POS software monthly fee
£0
Setup fee
Hardware
Reader and terminal costs vary
PayPal POS hardware PayPal POS offers hardware options including card readers and terminal products.
The PayPal Reader is designed to work with the PayPal POS app on a compatible smartphone or tablet.
PayPal says the card reader is available from £29 per new eligible business user, with no monthly fees or hidden costs and a 1.75% transaction fee.
PayPal also offers PayPal Terminal hardware options, including a terminal with barcode scanner.
Hardware type Best for
PayPal Reader
Mobile sellers, market traders and simple card payments
PayPal Terminal
Retailers and businesses wanting an all-in-one payment device
Smartphone with POS app
Businesses wanting lightweight mobile payments
Tablet POS setup
Small shops, cafés and counter sales
Integrated POS hardware
Businesses needing more complete retail or hospitality setup
PayPal POS features PayPal POS can support a range of small business payment and POS features, including:
card and contactless payments
PayPal POS app
product library
inventory management
checkout tools
sales reporting
gift cards
payment links
invoices
staff features, depending on setup
hardware options
ecommerce integrations
accounting integrations
PayPal business account integration
PayPal POS is best for straightforward selling.
Businesses needing advanced table management, kitchen display systems, complex stock control or multi-site reporting may need a more specialist POS or merchant account provider.
What Do Customers Think? PayPal POS is generally rated highly for:
Ease of use
Quick setup
No monthly fees
Common complaints include:
Customer support issues
Delays in accessing funds
Higher fees compared to competitors
Paypal POS Merchant Account Alternatives
Alternative Best for
Square
Best all-round POS alternative for small businesses
SumUp
Cheapest simple card reader alternative
Dojo
Better for growing businesses and regular in-person turnover
Tyl by NatWest
Bank-backed card machines and payment services
Worldpay
Established businesses and merchant services
Barclaycard
Bank-backed merchant account services
Elavon
Retail, hospitality and SME merchant services
TakePayments
SMEs wanting guided card machine setup
Clover
Retail and hospitality POS with payment hardware
Stripe
Online-first businesses and custom checkout
Our Verdict on Paypal POS Merchant Accounts PayPal POS is a strong entry-level payment solution for small UK businesses that want:
Simple pricing
No contracts
Quick setup
However, as your business grows, flat-rate fees can become expensive, and many businesses eventually move to:
👉 Square (they have better features)
👉 Or a merchant account (lower long-term costs)
FAQs About Paypal POS Merchant Accounts Is PayPal POS the same as Zettle?
Yes. Zettle by PayPal is now called PayPal POS.
Is PayPal POS a merchant account?
No. PayPal POS is not a traditional merchant account. It is a payment service provider, meaning PayPal manages payment processing and risk checks.
How much does PayPal POS charge in the UK?
PayPal POS charges 1.75% for card and contactless payments in the UK. Manual card entry costs 3.4% + 20p, and payment links using PayPal payments cost 2.9% + 30p.
Does PayPal POS have a monthly fee?
PayPal POS has no monthly fee for its core POS software, although hardware costs and transaction fees apply.
How much is the PayPal card reader?
PayPal says the card reader is available from £29 per new eligible business user. Pricing can change, so check current hardware pricing before buying.
Does PayPal POS work offline?
PayPal says the card reader needs an internet connection and is paired with the PayPal POS app on a compatible smartphone or tablet.
Is PayPal POS good for small businesses?
Yes, PayPal POS can be good for small businesses that want simple in-person payments, no monthly software fee and quick setup.
Is PayPal POS good for high-volume businesses?
PayPal POS may become expensive for high-volume businesses because the standard in-person fee is flat-rate. Higher-volume businesses should compare merchant account providers.
Is PayPal POS cheaper than Square?
PayPal POS and Square both list 1.75% for standard in-person card payments. Square may offer stronger POS tools, while PayPal may suit businesses already using PayPal.
Is PayPal POS cheaper than SumUp?
SumUp’s standard in-person card reader fee is lower at 1.69%, while PayPal POS charges 1.75%. The cheaper option depends on your payment mix and feature needs.
What are the best PayPal POS alternatives?
The best alternatives include Square, SumUp, Dojo, Tyl by NatWest, Worldpay, Barclaycard, Elavon, TakePayments, Clover and Stripe.
Can I use PayPal POS for a shop?
Yes, PayPal POS can be used by small shops, but retailers needing advanced stock, staff management or EPOS features should compare Square, Clover and merchant account providers.
Can I use PayPal POS for a restaurant?
PayPal POS may suit simple counter-service venues, but full-service restaurants usually need more advanced hospitality POS features, tipping, split bills and portable terminals.
Can I withdraw PayPal POS funds to my bank?
PayPal POS works through the PayPal ecosystem, and businesses can transfer funds according to PayPal’s account and withdrawal process.
Should I compare merchant accounts before choosing PayPal POS?
Yes. PayPal POS can be a good starter option, but merchant account providers may offer better long-term value if your card turnover is growing.
Related Merchant Account Guides
If you’re researching merchant accounts and card payment processing, the guides below explore specific providers, use cases, costs and common questions in more detail.
Merchant Account Basics & FAQs
Understand how merchant accounts work and what to expect before signing up:
Major UK Merchant Account Providers
Detailed reviews of leading UK merchant account providers and acquirers:
Payment Providers & Alternatives
Explore pay-as-you-go and hybrid payment providers often compared with merchant accounts:
Card Payments, EPOS & POS Context
Learn how merchant accounts fit into wider payment and EPOS setups:
Next Step: Compare Merchant Accounts
If you want tailored pricing based on your turnover, industry and risk profile, use our comparison tool to review UK merchant account providers side by side.
👉 Compare merchant accounts →
Hi, I’m Ally Cox , a senior copywriter and blogger at CompareYourBusinessCosts.co.uk, the UK’s trusted platform for comparing business services.over a decade of experience in the B2B sector, I specialise in simplifying complex topics like leased lines, VoIP, business energy, HR and payroll solutions, accounting software, and EPOS systems .HR, copywriting, and business operations- from clocking-in systems to card machines and office technology .informed, confident decisions when choosing products and services that improve efficiency and save money.
