UK merchants seek integrated payment platforms, study shows

By Divya Shah

UK merchants are increasingly evaluating payment providers based on software integration, deployment capabilities and lifecycle support rather than payment acceptance alone, according to new research from Castles Technology.

In its latest research, The UK Merchant Market, the Android-based point-of-sale (POS) terminal provider highlighted a shift in merchant priorities as digital payments become increasingly embedded within broader business operations.

According to the research, contactless payments and mobile wallet acceptance have effectively become standard features across the UK payments landscape. With around 90% of merchants already accepting mobile wallet payments, payment acceptance is no longer viewed as a primary differentiator when selecting a payments provider.

The change is expected to accelerate following the removal of the UK’s fixed £100 contactless payment limit in March 2026, allowing banks to set their own transaction thresholds. The move is anticipated to drive greater adoption of contactless payments for higher-value purchases across sectors such as hospitality, healthcare and luxury retail.

Rather than focusing solely on transaction processing, merchants are increasingly seeking FinTech solutions that integrate payment infrastructure with wider business systems. The research identified reliability, ease of use, payment flexibility, software integration, and transparent pricing and support as the key factors influencing provider selection and customer retention.

Integration with enterprise resource planning (ERP), customer relationship management (CRM) and e-commerce platforms emerged as a particularly important consideration for merchants operating across both physical and digital sales channels. As businesses look to consolidate operations and gain better visibility into sales, inventory and customer data, payment platforms are becoming a central component of broader commerce ecosystems.

For smaller businesses, cloud-based POS technology is playing an increasingly significant role. The research noted that merchants with lower transaction volumes are prioritising solutions that can be deployed quickly while combining payments, inventory management, reporting and customer analytics within a single platform. This allows businesses to access enterprise-grade capabilities without making significant infrastructure investments.

Commenting on the findings, Jean-Philippe Niedergang, Acting Group Chief Executive Officer of Castles Technology, said merchant expectations have evolved beyond simply accepting more payment methods. He noted that businesses now expect payment technology to integrate with day-to-day operations, support remote management and continue delivering operational value long after deployment.

The research also highlighted the growing influence of Independent Sales Organisations (ISOs) within the UK merchant acquiring ecosystem. According to industry estimates cited in the research, ISOs account for more than half of new merchant acquisitions for card acquirers, with over 60 operators active in the market.

As competition intensifies, the research noted that differentiation is increasingly being driven by managed services rather than payment hardware itself. Areas such as terminal deployment, remote device management, maintenance, monitoring and ongoing customer support are becoming more important as merchants seek operational efficiency and reduced complexity.

The findings reflect a broader trend across the FinTech sector, where payment acceptance is being combined with software, analytics and business management capabilities. As POS hardware becomes increasingly commoditised, providers are competing through integrated platforms and value-added services that help merchants manage operations, improve customer experiences and support business growth.

The research suggests that the next phase of competition in merchant payments will be shaped less by hardware capabilities and more by the ability of FinTech providers to deliver connected, data-driven and service-orientated payment ecosystems.