Last editedJun 20233 min read
Fintech payment systems are rapidly changing the way businesses charge their customers. In the UK, the fintech payment industry has seen tremendous growth, with a wide range of businesses offering innovative solutions that are often faster, more secure and more cost effective than traditional banking methods. Here is a simple guide to the best fintech payment systems for UK businesses.
What to consider when choosing a fintech payment system for your business
Security should be viewed as non-negotiable in any fintech payment system (or traditional payment system). This means that the three key differentiators between fintech payment companies are the user experience, the integrations and the fees.
Depending on the fintech payment system you use, the user experience may be simply from the business side or from both the business and payer sides. If it’s the former, then overall, you will have a choice of dashboards, integrations and APIs.
With that said, what specific options are available will depend on the fintech payment company. Some fintech payment companies will support some of these options but not others. Alternatively, they may support all options but not support them equally well.
For example, a fintech payment company may have an excellent API but a weak dashboard or vice versa. Likewise, support for integrations can also be variable.
Integrations with existing software and systems can make your work process a whole lot quicker and easier. They can therefore be a major selling point for fintech payment companies. If you are heavily dependent on a particular software or system, it can make a lot of sense to use a fintech payment company that integrates with it.
The fees themselves are important. What’s more important, however, is the overall value. You will, however, only be able to determine the overall value offered by a fintech payment system if its fees and fee structure are transparent.
Keep in mind that many payment companies (both fintech and traditional) will have different sets of fees for different types of payment. For example, credit cards may have different fees from debit cards. International payments may have different fees from domestic payments. In fact, international payments may have different fees depending on the country in which they are made.
Top fintech payment companies for UK businesses
Here is a guide to the top four fintech payment companies operating in the UK.
GoCardless only supports payments by bank debit. When it was founded (in 2011), it focussed on traditional bank debit payments (e.g. BACS). Over the last few years, however, it has expanded its use of open banking. Probably the most obvious example of this is its support for secure Instant Bank Payments.
Merchants can choose between using GoCardless via its dashboard, its API or through an integration. Integrations are definitely one of GoCardless’ strong points. It is partnered with a wide range of popular business tools, especially accounting software, e-commerce platforms and member-management platforms.
GoCardless places a strong emphasis on customer support and education. In particular, it still offers a phone number where its merchants can speak to actual human agents. It also has a customer hub filled with resources and tools along with its API documentation.
Klarna specialises in the buy-now-pay-later sector. While it has various offerings, they are all essentially different types of instalment plans.
Both merchants and payers need to sign up for Klarna. This could technically be considered adding friction to the checkout process. In practice, however, the impact of this is negligible.
Signing up for Klarna takes only a little more effort than making an immediate payment. Furthermore, there is a clear reward to payers for doing so (access to instalment plans). Moreover, once a payer is signed up to Klarna, they can use that account at any merchant partner.
The nature of Klarna’s business offering means that it’s highly unlikely to be suitable for use on its own. It can, however, be a very useful addition to services offered by other fintech payment companies.
Technically, PayPal is an ewallet. That means transactions made through PayPal have to be backed by an external source of funds. In the UK, PayPal accepts payment cards and bank debits.
PayPal started out as what was effectively a proto-peer-to-peer payment service. This meant that it had to be easy to use. Its service has developed massively since then. Ease of use does, however, remain one of its major selling points.
There are, however, two potential drawbacks to using PayPal. The first is that PayPal charges very high fees in comparison to other options. The second is that PayPal requires both merchants and payers to have PayPal accounts.
The fact that PayPal has been in operation since 1998 means that it does have a fairly large, established user base. Its reach is, however, still nowhere near as extensive as either the payment networks or the bank-debit networks. It will also be interesting to see how well PayPal succeeds in attracting new, younger users to its platform.
Stripe is known for its API. This allows merchants to customise their use of Stripe to suit their exact needs. For completeness, it also has a dashboard and a range of integrations. These are not, however, its headline selling points.
The fact that Stripe is so API-orientated is reflected in how it operates. For example, its online documentation is arguably second to none in the industry. Developers can probably find anything they need to know via these resources. Its direct support process, by contrast, can be complex, especially for smaller merchants.
It’s also worth noting that, while it does support bank debits, Stripe is very much focused on card payments. Therefore, if you want to make significant use of bank debits, it might be better to go with a specialist in that area, such as GoCardless.
We can help
GoCardless is a global payments solution (with award-winning customer support) that helps you automate payment collection. It cuts down on the amount of financial admin your team needs to deal with and helps improve your bottom line. Find out how GoCardless can help you with one-off or recurring payments.