Last editedJun 20235 min read
In the UK, several low-cost online payment systems make digital transactions accessible and cost-effective, including PayPal, Stripe, GoCardless, WorldPay, Opayo and Shopify. These systems, despite their affordable pricing, still deliver high-quality service, security, and convenience, making them popular choices in the UK's digital payments landscape.
What is an online payment system?
An online payment system allows you to digitally pay for goods and services using the internet, eliminating the need for physical cash or traditional card readers.
Online payment processing takes place in two sections – the gateway and the processor. The former is the software linking a site’s shopping cart to a third party, and the latter is the process of moving funds, which also involves communicating with the buyer’s bank.
PayPal, for instance, is a good example of an online payment system, as it facilitates online business by allowing both individuals and companies to take payments from customers worldwide.
There are dozens of secure payment systems available within the UK, and they all make profits by taking a small percentage from each transaction.
What are the benefits of online payment systems?
There are numerous advantages to using an online payment system, both for consumers and businesses:
Convenience: consumers can pay for anything, anytime, anywhere, paying bills or buying goods and services online from the comfort of their own homes.
Speed: online payments are typically processed in a short amount of time, no more waiting for checks to clear or customers to take manual payment actions. Merchants can settle payments faster, improving their cash flow.
Security: online payment systems prioritise security to protect sensitive financial information through encryption and other robust safety features, to reduce the risk of fraud.
Integration: online payment systems usually integrate easily with e-commerce platforms, accounting software, and other business systems. This streamlines the payment process, reducing manual admin and mistakes and uncovers valuable insights through data analytics and reporting.
The top 6 payment systems in the UK
Many of us probably use payment systems or gateways daily without realising it. They are always there, running in the background, securing our important payment information and ensuring that payments are tracked reliably and effectively. But, as we’ll discover below, there’s no one-size-fits-all payment solution.
The best payment gateway for your needs will depend on your business’s specific needs. They will either charge monthly fees or take a percentage of each payment. Whichever you plan to use, however, any of the five below should more than meet the requirements of most.
You can save both money and time with payment collection through GoCardless, reducing costs by 56% on average.
The Perky Blenders, for example, is just one of more than 75,000 businesses using GoCardless as an automated payment solution to ensure they get paid on time, saving thousands of pounds by avoiding undesirable payment admin.
GoCardless takes the pain out of getting paid for UK businesses with transparent pricing and the ability to take international payments from 30+ countries. Perfect for receiving both regular and one-off payments, you can get started using either the GoCardless dashboard or an integration our partners, including Xero, QuickBooks, Sage 50, Tide, and Salesforce.
You can get started today on a pay-as-you-go basis with no contract, obligation, or upfront commitment.
The largest online payment system in the UK by quite some margin, Worldpay handles over 40% of all UK-based online card transactions. This payment gateway can either be hosted on the Worldpay site or integrated into your existing site. Pay-as-you-go and monthly payment options are suitable for businesses of all sizes.
The most renowned name on this list, primarily as it was the default eBay payment method for years, PayPal is easy to sign up to and even easier to use. It is also very expensive when compared to the alternatives in terms of transaction fees though, which means it’s rarely the best choice for businesses. For individuals, though, the ease of use makes it an enduringly popular choice.
One of the simplest solutions on this list due to the ease with which it can be integrated into your site, Stripe offers competitive rates and transparent pricing. It’s incredibly fast and robust and is a full-payment solution package. All you need to provide is the site and the shopping cart.
The most popular e-commerce platform in the UK, Shopify offers everything you need to get started selling. Everything from web hosting to payment processing is taken care of, and they even offer a free trial for undecided businesses. However, ease of use comes at a cost, as Shopify is one of the more costly payment solutions on the market.
6. Opayo (Sage Pay)
Formerly known as Sage Pay, Opayo is often championed as one of the best payment gateway solutions in the UK. It offers flexible payment options and drop-in checkout integration, making it a smart middle-ground option between something like Worldpay and Shopify's “all-inclusive” option. It does require a little technical knowledge to get the best out of it, though.
GoCardless is great for UK businesses that want to reduce transaction fees, eliminate late payments and reduce manual admin. Learn more.
A specialist in bank payments GoCardless offers quick and easy ways to set up payments and start collecting from customers today.
GoCardless is a pay-as-you-go platform, so no contract or upfront commitment is required.
GoCardless is a great option for businesses that want to save time and money whilst having a secure and reliable payment provider.
Stripe is a popular payment platform that is well-known for being a leader in card payments.
Card payments are good options for retailers, hospitality and e-commerce, but have a reputation for expensive transaction fees and relatively high payment failure rates.
PayPal is one of the biggest names in online payments and is easy to get started with, but it’s debatable if it could really be considered low-cost.
WorldPay is another huge player in online payments with something for everyone, but more suitable options will be available for many small businesses.
Shopify is a relatively new e-com specialist whose offering will be well-suited to many e-Commerce businesses.
Opayo is a solid payment provider but might be a steep learning curve for those without technical proficiency in setting these systems up.
Cost-effective, secure and reliable recurring payment collection for small businesses.
"For ongoing monthly payments it’s perfect. You can easily adjust the subscription amounts and don’t suffer from the problem of expired cards." - Charles Cridland, Technical Director, YourParkingSpace
Case Study: Ignite
Ignite, a boutique gym in the South of England, enjoyed rapid growth since its post-lockdown 2021 launch but faced an administrative burden in managing member payments. As a solution, Ignite adopted GoCardless for automating monthly bank payment collections.
Andrew Charalambous, Director of Ignite, praised GoCardless' support:
He also highlighted GoCardless' cost efficiency, stating,
Today, GoCardless processes 80% of Ignite's turnover, reliably collecting monthly payments from over 1,000 members with minimal admin work.
When Ignite encountered difficulties with failed transactions as its customer base grew, GoCardless' Success+ proved invaluable. By using machine learning to predict when customers are most likely to have funds and automatically retrying payments on that day, Success+ has saved Ignite considerable time and effort. Charalambous said,
The ease of the GoCardless system has also improved the customer experience. Charalambous remarked,
Looking ahead to the gym's expansion plans, he expressed confidence in GoCardless' scalability:
We can help
Setting up payment collection is fast and efficient with GoCardless. By automating the payment collection process, GoCardless drastically cuts down the administrative responsibilities of managing and tracking invoices for your team.
GoCardless makes it quick and easy to get started with no contracts or long-term commitment required. You can set up instant, one-off, or recurring payments in the merchant dashboard in just a few clicks. GoCardless automatically creates and sends all the necessary forms, doing all the heavy lifting for you. You can also connect to GoCardless via over 350 partner apps, such as Xero and Quickbooks.
Discover how GoCardless can automate payment collection, making it easier for you to concentrate on what matters most - your business growth.