Online Payment System

The 10 Best Online Payment Systems in the UK (Updated 2020)

An online payment system is the bread and butter of any e-commerce website. E-commerce sites require ‘card not present’ transactions, and without an online payment system, you have no reliable way of taking payments. That PDQ machine is no use to you here. As we’ll see, however, there’s no one-size-fits-all when it comes to online payment processing.

We’ve no doubt that you’ve already heard of Paypal and Worldpay – they are household names after all. As we’ll see, however, online payment systems can serve entirely different purposes and depending on the type of business you own, you may find considerable differences in how much they will cost to operate.

 

What is an online payment system?

An online payment system is typically managed by a third-party, such as Paypal. As we’ll see, there are a number of different payment methods that allow you to accept payments without a card reader in a way that is convenient and secure. The companies that run these payment systems make their profit by taking a small percentage of every transaction.

The online payment system for an ecommerce site consists of two main parts: the payment gateway – the software that links your site’s shopping cart to the payment processing network; and the payment processor (or merchant service), which does all the important bits like actually moving the transaction through the processing network, sending you statements and working with your bank.

Another solution for processing card not present transactions is a virtual terminal. Unlike payment gateways, these are typically used by an employee once they have collected a customer’s details. This could be over the phone, in-store, or by email.

There is a lot more to be said about the relative merits of each solution. If you’re still unsure about what exactly your business needs, check out our ‘what is a payment gateway’ article, or take a look at our best virtual terminals.

 

What are the best online payment systems on offer right now?

 

Worldpay

1. Worldpay

The UK’s most popular payment processing company, Worldpay currently processes about half of all online payments in the UK. It’s also a great choice for small businesses, with lots of flexibility when it comes to choosing a plan.

A Worldpay payment gateway can either be hosted on their site or integrated into your own site, depending on your budget and requirements. You can accept payment from around the world, with over 120 currencies supported. It’s also got advanced fraud protection to keep your business safe.

 

Fees

WorldPay offers two main pricing plans:

  • Pay as you go – 2.75% + £0.20 per transaction, applicable to both credit and debit card payments.
  • Pay monthly – £19.95 per month plus 2.75% for credit card payments and 0.75% for debit card payments.

The website also states that any business with over 1,000 monthly transactions can get in touch for pricing discounts based on volume. However, it’s worth noting that for PCI compliance, Worldpay’s SaferPayments PCI service comes at an additional cost.

Pros

  • Secure payments
  • Flexible pricing
  • All major cards accepted

Cons

  • Expensive

 

Stripe

2. Stripe

Stripe offers a customisable payment form that you can embed directly into your website so that your customers can pay easily without getting redirected. This can be important for earning trust as a brand and boosting your conversion rate. It accepts over 135 currencies. What’s more, it’s actually a lot cheaper than rivals like Worldpay.

 

Fees

Stripe offers some flexibility when it comes to choosing plans, though it’s not entirely clear how much from the website:

  • Integrated – 1.4% + £0.20 per transaction for European cards, 2.9% + £0.20 for non-European cards.
  • Customised – Offers volume discounts, interchange pricing, multi-product discounts and country specific rates.

Pros

  • Accepts Bitcoin
  • Payment form available in 12 languages
  • Cheap

Cons

  • Customer service not up to the standards of other providers

 

sage pay

3. Sage Pay

Sage Pay processes millions of payments each month for over 50,000 businesses. There are no hidden charges and the service provided is highly reliable. You can expect to receive your payments in as little as 2 days, compared to the industry average of 7 days. If you’re a business that operates an online store alongside a highstreet shop, then Sage Pay can also provide you with a single, cohesive solution.

Fees

Sage Pay offers a number of pricing options to suit different sizes of businesses:

  • Flex – £27 per month, for up to 350 transactions per month. Includes free fraud screening tools and 24/7 support.
  • Plus – £45 per month, permits up to 500 token purchases (where your customer doesn’t have to re-enter their card details) each month. Also comes with free fraud screening tools and access to “Fast Pass” support.
  • Corporate – Bespoke pricing. Over 3000 transactions per month. Comes with ‘bespoke’ fraud screening tools, priority support and a dedicated account manager.

Pros

  • 24/7 phone support
  • Sage also offers other services such as payroll and accounting if you want a more holistic package.

Cons

  • Expensive

 

square

4. Square

Square’s a great choice if you’re looking to get your online business up and running as quickly as possible, especially as it’s partnered with website builders like Wix and Weebly for ease of use. It’s cheaper than Paypal if you’re a small business (not the cheapest, admittedly), but it also offers a tonne of free features which you’ll want to take into account before you opt for any of its rivals. If you also accept a low volume of face-to-face payments, the low transaction fee could make all the difference.

Fees

Square offers a simple flat fee for both its card and card-not-present transactions:

  • Card not present – 2.5% transaction fee (1.75% for face to face transactions)

Pros

  • No commitment to long-term contracts
  • Simple, transparent pricing

Cons

  • No 24/7 customer support

 

Shopify

5. Shopify

Shopify offers a complete ecommerce platform, allowing you to build a site from scratch, integrate over 4,100 different apps and plugins, and use the Shopify payment gateway to take customer payments.

Fees

Shopify offers 3 main payment plans for different sizes of business:

  • Basic Shopify – $29 (£22.73) per month, includes the ecommerce website and blog, unlimited product listing, 2 staff accounts, 24/7 support, SSL certificate, discount codes and gift cards. Online credit card rates are 2.2% + £0.20 and there is a 2.0% fee charged on all payment providers other than Shopify payments.
  • Shopify – $79 (£61.93) per month, provides an additional 3 staff accounts for a total of 5 as well as professional reporting. Online credit card rates are 1.9% + £0.20 per transaction.
  • Advanced Shopify – $299 (£234.39) per month gives you a total of 15 staff accounts, an advanced report builder and third-party calculated shipping rates at checkout. Online credit card rates are charged at 1.6% + £0.20 per transaction.

Pros

  • The whole package! It also comes with some great looking store front templates that work well on mobile.
  • Offers integration with over 100 payment gateways.

Cons

  • High monthly fees, but this is more than just an online payment gateway at the end of the day.

 

Braintree

6. Braintree

Braintree is the lesser known division of Paypal which specialises in mobile payments and online payment solutions for ecommerce businesses. That said, Braintree also powers many of the brands you’ve come to know and love, including Uber, Airbnb and Skyscanner. It’s got some great fraud protection, accepts over 120 different currencies and low rates and zero setup fees make it an equally affordable choice for your small business.

Fees

Braintree fees are nice and easy to get your head around:

  • 1.9% + £0.20 per transaction, with no hidden or monthly fees.

Pros

  • Low and easy to understand fees.

Cons

  • Online reviews suggest it can take a little longer to set up than alternatives.

 

Paypal

 

7. Paypal

Paypal made itself known through the ecommerce giant eBay, allowing for fast, reliable and generally pain-free transactions. All customers need to do is sign up for a Paypal account. But don’t worry, Paypal proudly states on their website that, according to research conducted in 2015 by Nielsen Buyer Insights, there’s a 44% higher online checkout conversion rate with Paypal. It’s clearly earned a special place in consumer’s hearts, even as new alternatives to Paypal flood the market. Needless to say, Paypal’s payment gateway, Payflow, is a firm favourite with online businesses.

Fees

Paypal checkout can be expensive for businesses with a low monthly sales volume, but fees become much more manageable for higher volume retailers:

  • 3.4% + 20p per transaction for less than £1,500 worth of payments per month.
  • 1% + 20p per transaction for more than £55,000 worth of transactions each month.

Pros

  • Widely trusted, over 220 million users worldwide.
  • Budget friendly if you have an ambitious sales target.

Cons

  • High transaction fees for small businesses with low volume.

 

Amazon Pay

8. Amazon Pay

Amazon Pay really needs no explanation. Amazon makes the whole checkout process incredibly easy, with 1-click payment options, the ability to load Amazon accounts with gift cards and more. According to a recent survey, 89% of buyers are more likely to buy products from Amazon than any other online retailer. Checkout time is also significantly reduced for customers, who can re-use their previously entered details.

Fees

For a business with low monthly volume, Amazon Pay processing fees can be expensive:

  • Less than £1,500 volume – 3.4% + £0.20
  • £1,500 – £6,000 volume – 2.9% + £0.20
  • £6,000.01 – £15,000 – 2.4% + £0.20
  • £15,000.01 – £55,000 – 1.9% + £0.20
  • Above £55,000 – 1.4% + £0.20

Pros

  • 2.5 million active sellers, 150 million prime members, and millions more standard accounts.
  • Quick checkouts.

Cons

  • High transaction fees for small businesses with low volume.

 

9. Authorize.net

Authorize.net is a highly customisable payment system and one of the favourite choices for online retailers. It’s also one of the oldest and most trusted – and with over 400,000 merchant accounts around the world, it shows. UK customers can choose between either a Payment Gateway and Online Merchant Account or a Payment Gateway by itself.

 

Fees

Authorize.net can feel a little expensive, particularly for low volume merchants.

  • Payment Gateway Only – £19 per month gateway fee, + £0.10 per transaction.
  • Merchant Account and Payment Gateway – £19 per month and 2.49% + £0.15 per transaction.

Pros

  • Recurring billing is included.
  • Includes a virtual terminal.

Cons

  • Monthly fee.
  • Extra monthly fee for non GBP currencies (£15 per month).

 

Adyen

10. Adyen

The word Adyen means ‘start over again’ in Surinamese, which is exactly what the company planned to do with online payments when it was founded in 2006. The company aimed to create a frictionless payment experience for the customer, and with over 250 payment methods accepted online, in person and over the phone, there’s no doubt it has achieved this.

 

Fees

There are no setup fees, but a range of different fees depending on the payment method can make Adyen seem quite complex:

  • Visa – £0.10 + interchange ++
  • Mastercard – £0.10 + interchange ++
  • AMEX – £0.10 + interchange ++

Pros

  • Accepts hundred of payments all on one platform.
  • Competitive fees.

Cons

  • A minimum invoice of £100 makes it a difficult sell for small businesses.
  • Not good for higher risk merchants with larger proportion of chargebacks such as small businesses.
  • Funds are settled to your bank account twice a week, which is a little slower than competitors.

 

Conclusion

If you’re still scratching your head, we don’t blame you! There’s a lot to think about when it comes to deciding on the type of payment service that your business needs. This roundup is designed to give you an insight into the variety of services and fee models on the market.

 

If you’re looking for an online payment solution, then chances are you are also in the market for a new merchant account. Why not check out our article, ‘what is a merchant account’?

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