Payment gateways in the UK connect your website to the card networks and wallets your customers use, check each payment for fraud and move the money to your bank. The main choices for small and medium businesses are Stripe, PayPal and buy now pay later providers such as Klarna. Add to those the wallets Apple Pay and Google Pay, usually delivered through your main gateway, and bank-based options such as GoCardless for Direct Debit.
This guide explains what each one does, how their fees are structured and which combination most UK stores and service businesses should offer.
Key takeaways
- Most UK stores need one main card gateway with Apple Pay and Google Pay switched on, plus PayPal as an alternative.
- Card fees are usually a percentage plus a small fixed fee, with higher rates for non-UK cards.
- Buy now pay later can lift orders on higher-value items but costs more per sale and brings extra rules.
- Direct Debit through GoCardless suits recurring payments such as memberships and subscriptions.
- Offer the methods your customers expect, then check each one earns its place in your reports.
What a gateway does
When a customer pays, the gateway collects the card or wallet details securely. It runs fraud checks and Strong Customer Authentication where required, sends the payment for approval and records the result on your order. Later, the money is paid into your bank account, minus fees.
Modern gateways such as Stripe and PayPal also act as the processor and merchant account. So a small business can start taking payments without a separate agreement with a bank. They handle most of the card security burden, which reduces what you must do to stay compliant, as long as card details never touch your own server.
Stripe
Stripe is the default choice for many UK websites. It supports cards, Apple Pay, Google Pay and a growing list of other methods through one integration, and it works with WooCommerce, most booking tools and custom builds.
Its published UK pricing is a percentage plus a small fixed fee per successful card payment. Cards issued outside the UK cost more, and currency conversion adds a further charge. Check the current Stripe UK pricing before choosing. Stripe also offers tools for subscriptions, invoices and fraud screening.
PayPal
PayPal remains popular with UK shoppers, particularly for first purchases from unfamiliar shops, because customers do not have to share card details with you. Offering it can reassure some buyers.
Fees are generally higher than a card gateway for many transaction types and vary by payment type and country. Check the current PayPal UK merchant fees. Most stores offer PayPal alongside a card gateway rather than instead of one.
Klarna and BNPL
Buy now pay later (BNPL) providers such as Klarna, Clearpay and PayPal Pay in 3 let customers split a purchase into instalments while you are paid upfront. They can help with higher-value items such as furniture, fitness equipment or electronics, where spreading the cost makes a purchase easier.
The trade-offs:
- Higher fees than standard card payments, often a larger percentage per sale.
- Brand and eligibility rules on how you display the option.
- Regulation. BNPL products have been brought under Financial Conduct Authority regulation in the UK, so check the current position and each provider's requirements.
Klarna's business pages explain its options for merchants. BNPL rarely makes sense for low-value everyday items.
Apple Pay and Google Pay
Apple Pay and Google Pay are wallets rather than separate gateways. Customers pay with a card stored on their phone, authenticated with Face ID, a fingerprint or a PIN. For you, the payment usually runs through your main gateway at its normal card rates.
Their main benefit is speed. On a phone, a wallet payment removes the need to type card numbers and addresses. That removes one of the most common points where mobile shoppers give up. Our guide to checkout optimisation covers express payment buttons in more detail.
GoCardless and bank payments
For recurring payments such as memberships, subscriptions, tuition fees or maintenance plans, Direct Debit can be cheaper and more reliable than cards, which expire and get replaced. GoCardless is a common way to collect Direct Debit online.
Open banking payments, often called pay by bank, let customers pay straight from their bank app without a card. They can suit higher-value payments, although customer familiarity is still growing.
Security and compliance
Card payments come with security rules, known as PCI DSS. The easiest way to keep your share of them small is simple: never let card details touch your own server.
- Use your gateway's hosted fields, payment page or official plugin.
- Keep your website, plugins and admin accounts secure and up to date.
- Switch on two-factor login for your gateway dashboard.
- Review who has access to refunds and payouts.
Gateways also help with fraud. Most include automatic screening, and Strong Customer Authentication adds a check with the customer's bank for many online card payments. Keep an eye on disputes and chargebacks, and reply to them with evidence such as proof of delivery.
Fees compared
Fees for payment gateways in the UK change regularly, so this table compares how each option is typically priced rather than quoting rates:
| Method | Typical fee structure | Best for |
|---|---|---|
| Card gateway (for example Stripe) | Percentage plus small fixed fee; higher for non-UK cards | Most online sales |
| PayPal | Percentage plus fixed fee; varies by type | Customers who prefer not to share card details |
| BNPL (for example Klarna) | Higher percentage per sale | Higher-value items |
| Apple Pay and Google Pay | Usually your card gateway's normal rate | Fast mobile checkout |
| Direct Debit (for example GoCardless) | Low percentage, often with a fixed fee and cap | Recurring payments |
To compare properly, take a typical month of your orders, including average order value and the share of non-UK customers, and calculate the total fees each option would charge. Small differences in percentage rates become significant as sales grow, as shown in our comparison of WooCommerce vs Shopify.
What to offer
For most UK online stores, a sensible starting mix is:
- One card gateway as the foundation, with Apple Pay and Google Pay switched on.
- PayPal as an alternative for customers who prefer it.
- BNPL only if you sell higher-value items and the fees still leave a healthy margin.
- Direct Debit if you sell memberships, subscriptions or regular services.
Then measure. Most gateways and ecommerce platforms report sales by payment method. If an option is rarely used, remove it to simplify the checkout. If mobile shoppers abandon at the payment step, check that wallet buttons are showing properly.
Choosing among payment gateways in the UK is only one part of a store that converts. Our guide to ecommerce SEO covers bringing in the traffic, and our guide to ecommerce website development in the UK covers the full build. For marketing the store, see our small business SEO guide. You can see our store work on our website design and web development pages.
Frequently asked questions
What is the cheapest payment gateway in the UK?
It depends on your sales mix. Card gateways such as Stripe usually charge a percentage plus a small fixed fee, with higher rates for non-UK cards, while PayPal and buy now pay later providers generally cost more per sale. Direct Debit is often cheapest for recurring payments. Model a typical month of your own orders against current published fees.
Is Stripe better than PayPal?
For most stores, Stripe works best as the main card gateway because it handles cards, Apple Pay and Google Pay through one integration, usually at lower fees. PayPal is best offered as an additional option, because some customers prefer not to share card details with an unfamiliar shop. Most UK stores benefit from offering both.
Should I offer Klarna?
Consider Klarna or another buy now pay later option if you sell higher-value items where spreading the cost helps customers decide. The fees are usually higher than card payments, and there are display and regulatory rules to follow. For low-value everyday items, the extra cost rarely pays back.
Set up payments properly
If you are choosing a payment setup or your checkout is losing sales, talk to us about your checkout and payments.