With online sales at an all-time high, now is the ideal time for merchants to start accepting payments via an online payment system on their website. Without such, online businesses would have no reliable method of taking payments – nor would they be able to reach customers all over the world.
For those who are starting a new online venture or adding an extra arm to their existing payment systems, there are plenty of systems to choose from. However, you’ll find there are huge differences in cost, depending on the type of business you run. It really comes down to what you need from a payment provider and how you want to operate.
And whilst accepting online payments might seem a little overwhelming, there are plenty of easy options out there for UK businesses. The trick is to find the right one for you – and that’s where we come in.
What is an online payment system?
Simply put, an online payment system is a way of making payment for goods and services via an electronic medium – without the use of cash or cheques.
Internet shopping and banking has dramatically increased over the last ten years and as such has the online payments industry. One of the most popular methods of payment online is via credit or debit cards. Of course, there are alternative methods such as bank transfers and smart cards, but the former is the most well-used and trusted.
An online payment system is usually managed by a third-party, such as Paypal. These third parties make their profit by taking a small percentage of each transaction. There are two main parts of an online payment system: the payment gateway, and the payment processor. The payment gateway allows merchants to pass credit card information securely between all parties, and basically acts as the ‘middleman’ between the merchant and their sponsoring bank. The payment processor is the company the merchant uses to handle the transaction – the one who does all the leg work moving the transaction through the processing network and working with your bank.
An alternative to processing transactions where the card is not physically available would be via a virtual terminal – which can be used over the phone or by email (as well as in-store). However, in this article, we’re going to be looking at the best online payment systems on the market right now in the UK.
What are the best online payment systems right now?
Worldpay is by far the biggest popular payment processing company in the UK, handling almost half of all card transactions. In fact, it was around way before online shopping became prominent. Yet it still remains the most popular UK payment processing provider, in particular for small businesses.
In terms of accepting card payments online they offer: an online payment gateway, an online merchant account, and the option to pay by link without the need for a website. Depending on your budget and requirements, a Worldpay payment gateway can be integrated into your own site or hosted on their site. Payments can be made in 120 currencies, with all major credit and debit cards accepted, including PayPal.
For those looking for a simple, online payment solution, Worldpay is a great option. But for comprehensive eCommerce brands, its features may not quite come up to par.
Worldpay offers various online payment methods depending on your business requirements as follows:
- Pay As You Go – 2.75% + £0.20 per transaction for both credit and debit card payments
- Monthly Fixed Fee – £19.99 per month plus 2.75% for credit card payments and 0.75% for debit card payments
- Pay By Link – £9.95 per month
- Accepts all major credit and debit cards
- Secure payments with additional fraud prevention measures to protect your customers
- Flexible pricing
- Pay by link capabilities saves time
- Has mixed reviews on Trustpilot
- Not a complete e-commerce package
Stripe is one of the most flexible and competitively priced payment systems on the UK market. In addition to card payments, it’s also possible to set up direct debit services and recurring billing. You can even create your own customised payment system. Best of all, it’s a lot cheaper than many other products on the market, including Worldpay. However, you will still need to have your own website or shopping cart software in order to sell online using this solution.
- 4% + £0.20 for European cards, 2.9% + £0.20 for non-European cards
- Customised payment – offers volume and multi-product discounts, and country specific rates
- User friendly
- Extra fast
- Cheap and transparent pricing structure – no hidden fees
- Powerful reporting tools
- Complex to set up
- Transfers take 7 days to arrive in your bank account
- Customer service not up to scratch compared to other providers
3. Sage Pay
Once a small but ambitious start-up in the UK, Sage Pay is now one of best rated payment processing companies in the world. Unlike other payment systems, transfers can take only 2 days, compared to the 7-day industry standard. It has a leading reputation for being secure and reliable – and there are no hidden charges. Best of all, there’s a full range of payment processing solutions for both online and offline businesses – so for those who run both an online store and a High street shop, Sage Pay can offer the perfect solution.
- Sage Pay Flex – £27 per month, up to 350 transactions per month, including 24/7 support
- Sage Pay Plus – £45 per month, up to 500 token purchases, and access to ‘fast pass’ support
- Bespoke pricing for corporates, over 3000 transactions per month, with priority support and a dedicated account manager
- Flexible and fast
- 24/7 phone support
If you’re after a simple and affordable solution to accept small amounts of card payments, Square could be the ideal offering. It’s admittedly not the cheapest but it comes in cheaper than PayPal and offers a range of free features compared to its rivals. It’s also a great choice if you’re looking to get your online business up and running quickly, particularly as it’s partnered with website builders like Wix.
- 5% transaction fee for card not present
- 75% for face-to-face transactions
- Competitive rates for online payments
- No commitment to long-term contracts
- No 24/7 customer support available
Shopify is the most popular ecommerce platform in the UK. They offer everything you need to start running an online business including web hosting, payment processing, as well as seamless integration with other sales channels such as Amazon. A free 14-day trial also makes them easy to get started with on a ‘try before you buy’ basis.
- Basic Shopify – $29 (£22.73) per month. 2.2% + £0.20 for online credit cards, plus a 2% fee charged on all payment providers other than Shopify payments. Features include the ecommerce website and blog and 2 staff accounts.
- Shopify – $79 (£61.93) per month – 1.9% + £0.20 for online credit cards. 5 staff accounts and professional reporting.
- Advanced Shopify – $299 (£234.39) per month – 1.6% + £0.20 for online credit cards. 15 Staff accounts, advanced report builder, and third-party calculated shipping rates at checkout.
- Offers the full package of everything you need and more
- Integration with over 100 payment gateways
- High monthly fees – but offers a lot for the price
Possibly the most recognisable online payment system, PayPal is often the first name that comes to mind for both businesses and customers. One of the best features being that all customers need do is set up a PayPal account, and voila! But, whilst it’s the easiest way to quickly start accepting online payments, there are a few compromises – and they’re probably not the best option for small businesses with lower monthly sales volume.
- 4% + £0.20 per transaction for under £1500 worth of payments each month
- 1% + £0.20 per transaction for more than £55,000 worth of payments each month
- Highly reputable and trusted worldwide
- Extensive card and currency support
- Very pricey for small businesses
Braintree is a division of PayPal, specialising in online and mobile payments. All major credit and debit cards are covered, as well as mobile payments and digital wallets, and over 120 currencies are accepted. It supports many well-known brands such as Airbnb and Uber and has some great fraud protection tools. Much like Stripe, Braintree focuses on flexibility over simplicity in terms of the developmental side of things.
- Simple pricing at 1.9% + £0.20 per transaction and no hidden fees.
- Low and transparent pricing
- Highly customisable
- Online reputation has dropped recently
- Complex to set up
8. Amazon Pay
Amazon Pay only started operating in the UK market in 2017 so hasn’t had much time to establish a huge foothold here. However, Amazon has a strong reputation. Customers are more likely to purchase products from here than any other online retailer. Plus, getting set up and integrated is easy, and the checkout process is seamless. However, Amazon Pay’s processing fees can be pretty steep if you’re only handling a low volume of card payments.
- 4% + £0.20 per transaction for less than £1500 worth of payments each month
- 9% + £0.120 for between £1,500-£6,000
- 4% + £0.20 for between £6,000.01-£15,000
- 9% + £0.20 for between £15,000.01 – £55,000
- 4% + £0.20 for over £55,000
- Highly reputable and well trusted brand
- Easy to set up
- Quick checkout process
- High transaction fees for those with smaller sales volume
Authorize.net is one of the oldest online payment systems and remains a favourite for online retailers. UK customers can opt for either a Payment Gateway and Online Merchant Account, or simply a Payment Gateway. Its key selling point is international payments with support for a wide range of currencies and a whole host of security features.
- Payment Gateway and Merchant Account – £19 per month plus 2.49% + £0.15 per transaction.
- Payment Gateway Only – £19 per month plus £0.10 per transaction. Free setup.
- Automated recurring billing is free
- Free advanced fraud detection suite
- Virtual terminal included
- Monthly fee
- Customer service reputation has dropped
Adyen is one of the trendiest offerings out there, boasting affiliation with the likes of Mark Zuckerberg and big names in the Silicon Valley. Adyen is the Surinamese name for ‘start over again’ and that’s exactly what they aim to do having created a state-of-the-art payment experience for customers. They accept over 250 payment methods online, over the phone, and in person, so for international retailers, they’re the most cost-effective option right now.
Adyen uses a pricing model known as Interchange ++ which tracks Interchange rates and scheme fees right down to a transaction level – but it can be a little confusing.
- Visa – £0.10 + interchange++
- Mastercard – £0.10 + interchange ++
- AMEX – £0.10 + interchange++
- Great support for international payments
- Highly competitive pricing
- Excellent customer service
- 2 weeks for fees to be settled in your bank account
- Minimum monthly invoice requirement of £100
So, there we have it – the 10 best online payment systems in the UK. As you can see, there’s a lot of choice and a lot to think about when it comes to deciding on which solution is right for your business. This article is designed to give you a roundup of what’s out there so you can start to think about what might best suit your business.
The simplest way to filter out the best payment method for your business is to do a quick comparison using our online comparison tool. Get started here.