UK businesses can accept online payments through a merchant account and payment gateway, a payment facilitator such as Stripe or PayPal, or Direct Debit for recurring payments. Compare provider fees, account controls and payment methods before choosing. Businesses accepting card payments must also consider PCI DSS requirements and Strong Customer Authentication where it applies.
Once you have registered your limited company with Your Company Formations, you need a reliable way to collect payments from customers. The right setup depends on what you sell, how customers prefer to pay, your transaction volume and how much control you need over payment processing.
Costs vary between merchant account providers, payment gateways and payment facilitators. Compare transaction charges, monthly fees, setup costs and other service fees against your expected sales volume rather than assuming one model will always be cheaper.
How to Accept Debit and Credit Card Payments Online
To accept card payments online, you need a payment provider or a combination of merchant acquiring and a payment gateway. The right setup depends on your website, transaction volume, and how much control you want over payment processing.
- Choose your payment setup: Use an integrated payment provider or arrange merchant acquiring and a compatible payment gateway separately.
- Compare providers: Look at transaction fees, monthly charges, supported payment methods, payout times, integrations, and account controls.
- Connect the payment service: Add the provider's checkout, e-commerce integration or payment gateway to your website or app.
- Check security requirements: Confirm your PCI DSS responsibilities and make sure Strong Customer Authentication is supported where it applies.
- Test and launch: Test successful and failed payments, authentication and refunds before accepting live transactions.
A payment gateway securely captures and transmits payment information to the processor or acquiring bank. The processor and acquirer handle authorisation and settlement.
Examples of providers offering online payment services in the UK include PayPal, Stripe, Square, Worldpay, Shopify Payments, Elavon and Cardstream.
PCI Compliance
PCI DSS applies to merchants that accept payment cards, including businesses that outsource all payment processing. Using a PCI DSS-compliant payment or hosting provider can reduce the systems in scope. Still, it does not automatically make your business compliant or guarantee that cardholder data is safe.
PCI DSS v4.0.1 is the current published version of the standard. Your acquirer or payment brand determines how you must validate compliance, and businesses that outsource payment processing still need to understand and monitor their third-party responsibilities.
Strong Customer Authentication (SCA)
Since 14 March 2022, Strong Customer Authentication (SCA) has been required for UK e-commerce card payments where the rules apply. SCA uses at least two independent authentication elements and is commonly delivered through 3D Secure 2, but exemptions can apply to some transactions. Before choosing a gateway or payment facilitator, confirm that it supports SCA and relevant exemption flows. See the FCA guidance on Strong Customer Authentication.
Using a Payment Facilitator to Accept Online Payments
Payment facilitators give businesses a streamlined way to accept card payments without building separate relationships with every party involved in processing a transaction.
The provider normally manages merchant onboarding, payment processing and account tools through one service. This can make payment setup easier for small businesses and online sellers, but eligibility requirements, pricing, payout schedules and account controls differ between providers.
Benefits of Using a Payment Facilitator
- Simpler setup: Payment processing, account tools and integrations can be managed through one provider.
- Straightforward pricing: Many providers use per-transaction or pay-as-you-go pricing, although additional charges can apply.
- E-commerce integrations: Providers often integrate with website builders, shopping platforms and accounting software.
- Centralised payment management: Businesses can manage transactions, refunds, reports and payment activity from one account.
What to Check Before Choosing a Payment Facilitator?
Check the provider's transaction fees, supported payment methods, payout times, industry restrictions and international payment options. You should also understand how it handles chargebacks, reserves, account reviews and payment holds.
Approval and continued access still depend on the provider's eligibility, fraud and compliance checks, so review the account terms before relying on a provider for your business payments.
How Much Does It Cost to Accept Online Payments?
The cost of accepting online payments depends on your provider, transaction volume, payment methods and how your account is structured. Do not compare providers using the headline transaction percentage alone.
Common payment costs include:
- Transaction fees: A percentage of the payment, a fixed amount per transaction or a combination of both.
- Monthly or gateway fees: Some providers charge a regular fee for access to their payment gateway or merchant services.
- Setup and integration costs: Charges can apply when setting up an account or integrating more complex payment systems.
- Chargeback and refund costs: Providers can charge fees for disputed transactions or certain refund processes.
- International payment costs: Additional charges can apply for foreign cards, currency conversion, or cross-border transactions.
- Payout charges: Some providers charge for faster or alternative settlement options.
Estimate how many transactions you expect to process and their average value, then compare the total expected cost across providers. Also consider payout times, fraud tools and account features rather than choosing solely on the lowest advertised rate.
How to Take Direct Debit Payments Online
Accepting direct debit payments allows your business to collect recurring payments from customers without requiring them to enter their payment information manually each time.
To collect Bacs Direct Debits, your business can become a Bacs service user and submit payment data directly or indirectly through a bureau, or use a facilities management provider that acts as the service user on your behalf. If you become a service user, your sponsoring payment service provider checks factors including integrity, financial standing and administrative capability.
Once set up, payment data is submitted to Bacs using the route that applies to your chosen model.
- Submitting payment files directly can suit organisations processing higher payment volumes and may be cheaper than using a bureau. Direct submitters need sponsorship from a Bacs participant payment service provider, a six-digit Service User Number (SUN) and Bacs-approved software to submit through Bacstel-IP, Bacs' secure online submission channel.
- Using a Bacs-approved bureau is an indirect submission route: the bureau submits payment data to Bacs on behalf of a service user. If your business does not have its own SUN, a facilities management provider can act as the service user and collect or administer Direct Debits on your behalf.
Pay by Bank and Open Banking Payments
Pay by Bank allows customers to pay an online business directly from their bank account without entering card details.
At checkout, the customer selects their bank and approves the payment through their banking app or online banking. A regulated payment initiation service provider connects the checkout to the customer's bank, and the payment is initiated through the UK's Faster Payments system.
For businesses, Pay by Bank provides another payment option alongside cards and Direct Debit. Availability depends on the payment provider you use and the banks it supports.
If you want to offer this method, check whether your payment provider supports UK open banking payments, how it integrates with your checkout, what transaction charges apply, and how refunds are handled.
You can learn more about how the payment method works from Open Banking's Pay by Bank guidance.
How to Choose an Online Payment Provider
The right online payment provider depends on how your business operates and how your customers prefer to pay. Instead of choosing solely on the advertised transaction rate, compare the complete service.
1. Payment methods and customer experience
Check which payment methods the provider supports, including debit and credit cards, digital wallets and other payment options relevant to your customers. The checkout should also work well on mobile devices and avoid unnecessary steps that could make it harder for customers to complete a payment.
2. Total cost
Compare transaction fees alongside monthly charges, setup costs, gateway fees and any additional charges relevant to your business. A provider with a lower headline transaction rate is not automatically the cheapest once all charges and your expected payment volume are considered.
3. Payout and settlement
Check how frequently the provider pays cleared funds into your business account and whether different payout schedules or charges apply. Settlement timing is particularly important if your business depends on regular cash flow to pay suppliers, staff or other operating costs.
4. Security and compliance
Check whether the provider's relevant services are validated for PCI DSS and support Strong Customer Authentication where it applies. Also review its fraud-detection tools and confirm which PCI DSS and security responsibilities remain with your business.
5. Refunds, chargebacks and fraud controls
Understand how the provider handles refunds, disputed payments and chargebacks, including any associated fees or evidence requirements. Look at the fraud controls available and whether you can configure them for the level of risk associated with your business.
6. Integration and support
Confirm that the payment service works with your website, e-commerce platform or other business systems. If payments are critical to your operations, also check the provider's support hours and how quickly you can contact its technical or account-support teams when something goes wrong.
How to Start Accepting Online Payments
Once you know which payment methods suit your customers, setting up online payments comes down to a few practical steps:
- Choose your payment methods: Decide whether you need card payments, Direct Debit, Pay by Bank or a combination.
- Choose a provider: Compare total costs, payment methods, payout times, integrations and account controls.
- Set up your checkout: Connect the payment service to your website or online store.
- Check security and compliance: Understand your PCI DSS responsibilities and make sure Strong Customer Authentication is supported where required.
- Test before launch: Check successful and failed payments, refunds and the customer experience on desktop and mobile.
- Go live and monitor: Keep an eye on payment failures, chargebacks, fees and settlement times as your business grows.
There is no single payment setup that suits every business, so review your provider as your sales volume and payment needs change.
