Last Updated on July 2, 2026
The Whito stage check
Compare Stripe, PayPal, square & more
Payment processing is not admin.
Note: For UK service businesses taking payments online, Stripe is the default choice. It handles one-off payments, subscriptions, and invoicing. Setup takes under an hour. If you need card machines for in-person payments, look at Square or SumUp instead.
It is margin control.
If your fees are wrong, profit leaks.
If your checkout is slow, conversion drops.
If payouts are delayed, cashflow tightens.
Note: Payment processing fees in the UK typically range from 1.4% to 2.9% per transaction. On £10,000 monthly turnover, that is £140 to £290. Compare total cost including monthly fees, not just the per-transaction rate. A lower percentage with a £25 monthly fee can cost more than a higher percentage with no monthly fee.
Most businesses choose a processor because it is familiar.
Few calculate the real cost.
This guide compares the leading payment processors used by UK businesses and explains when each makes sense.
Structure before scale.
First Principle
Payment processors differ on:
Transaction fees
Settlement speed
Hardware support
Invoicing tools
Subscription handling
International capability
The wrong processor does not break your business.
It quietly erodes it.
Quick comparison snapshot
| Platform | Best For | Online Fees (Approx UK) | In-Person Fees | Payout Speed | Subscriptions | Invoicing |
|---|---|---|---|---|---|---|
| Stripe | Online-first businesses | 1.5% + 20p | N/A (via partners) | 2–3 days | Yes | Yes |
| PayPal | Brand-trust checkout | 2.9% + 30p | Via Zettle | 1–3 days | Yes | Yes |
| Square | Retail & POS | 1.75% (in-person) | 1.75% | 1–2 days | Yes | Yes |
| Worldpay | Larger merchants | Custom pricing | Custom | Varies | Yes | Limited |
| GoCardless | Direct Debit | 1% capped | N/A | 2–3 days | Recurring focus | Limited |
| SumUp | Small retailers | 1.69% | 1.69% | 1–3 days | Limited | Basic |
Fees vary by volume and contract.
Always confirm with current UK pricing.
Platform Breakdown
Stripe
Best for: Online businesses and SaaS.
Strengths:
Developer-friendly
Subscription management
Strong API
International support
Limitations:
Requires technical setup
Chargeback management responsibility
Use if:
Online checkout drives revenue.
Avoid if:
You only need card machines.
PayPal
Best for: Consumer-facing checkout trust.
Strengths:
Brand recognition
Express checkout
Buyer protection
Limitations:
Higher transaction fees
Account risk reviews
Use if:
Your audience expects PayPal.
Avoid if:
Margins are tight and average order value is low.
Square
Best for: Retail and hybrid businesses.
Strengths:
Integrated POS hardware
Inventory tracking
Simple setup
Limitations:
Less flexible for complex online models
Use if:
You sell in person and online.
Avoid if:
You require advanced subscription logic.
Worldpay
Best for: Larger UK merchants.
Strengths:
Custom pricing
Established banking relationships
High-volume capability
Limitations:
Longer contracts
Less flexibility for startups
Use if:
You process significant monthly volume.
Avoid if:
You want flexible month-to-month contracts.
GoCardless
Best for: Recurring payments and Direct Debit.
Strengths:
Low-cost recurring billing
UK bank integration
Predictable fees
Limitations:
Not suitable for one-off card payments
Use if:
You run memberships, retainers, or invoices.
Avoid if:
You rely on card checkout.
SumUp
Best for: Micro and small retailers.
Strengths:
Low-cost hardware
Simple onboarding
Flat fees
Limitations:
Limited advanced reporting
Use if:
You need a quick POS setup.
Avoid if:
You require complex integrations.
Fee comparison example
Transaction fees impact margin directly.
Example:
£10,000 monthly revenue at:
1.5% + 20p
2.9% + 30p
Small differences compound annually.
Always calculate:
Effective blended fee
Chargeback risk
Refund costs
Cross-border fees
Headline rates rarely reflect the full cost.
Settlement Speed
Cashflow matters.
Standard payout:
1–3 working days.
Faster payouts may incur additional fees.
If you rely on daily working capital, payout speed is strategic.
Subscriptions & recurring payments
If you run:
Memberships
Retainers
SaaS
Installment plans
Ensure the processor supports:
Automated recurring billing
Failed payment retries
Dunning management
Stripe and GoCardless lead here.
Invoicing Needs
Some processors include:
Branded invoice links
Automated reminders
Payment tracking
If you send regular invoices, built-in tools reduce admin.
Otherwise, integrate with accounting software.
Hardware Considerations
Retail businesses need:
Card readers
POS terminals
Inventory sync
Square and SumUp dominate simplicity.
Worldpay supports larger retail operations.
Integration Considerations
Check compatibility with:
E-commerce platform
Booking systems
Accounting software
CRM
Subscription tools
Disconnected systems create reconciliation problems.
International Payments
If you sell abroad:
Check FX fees
Cross-border surcharge
Multi-currency support
International fees are often higher than domestic rates.
Common buying mistakes
Choosing based on familiarity alone.
Ignoring blended transaction cost.
Overlooking chargeback policies.
Not calculating annual fee impact.
Failing to model cross-border costs.
Payment processing is infrastructure.
Mistakes compound quietly.
Who should choose what
| Business Type | Recommended Direction |
|---|---|
| Online service business | Stripe |
| E-commerce brand | Stripe + PayPal |
| Membership business | Stripe or GoCardless |
| Retail store | Square or SumUp |
| High-volume merchant | Worldpay |
Match processor to revenue model.
The UK reality check
| Stripe | Square | SumUp | GoCardless | |
|---|---|---|---|---|
| In person | n/a | 1.75% free plan, 1.6% Plus | 1.69% | n/a |
| Online UK cards | 1.5% + 20p | 1.4% + 25p | From about 1.69% | 1% + 20p, capped at £4 |
| Monthly fee | None | None on free | None, or £19 for 0.99% in person | None on Standard |
| Payout speed | 2 to 3 days standard | Next day | Next day | Tied to Direct Debit cycle |
| Watch for | Non-UK cards cost more | Per-location pricing on Plus | Reader offers change often | It is Direct Debit, not cards |
Payment questions UK businesses actually ask
What does taking cards actually cost a small shop?
Why is my online rate higher than my in-person rate?
When does a traditional merchant account beat Stripe and Square?
How do I stop chasing invoice payments?
Is Klarna or a BNPL option worth adding?
Whito Takeaway
Payment processors affect: Margin, Cashflow, Checkout conversion, Operational efficiency Choose based on: Transaction volume, Revenue model, Hardware needs, Subscription requirements, International exposure Small percentage differences compound. Structure before scale.
See how real UK businesses do this well
Our Stolen With Pride series breaks down smart marketing moves from real UK businesses. No theory, just practical ideas you can use. See how Surreal Cereal turned LinkedIn into a free marketing channel, how Bloom & Wild’s email opt-out built more loyalty than any campaign, and more.
Pricing reviewed June 2026. Tools change their prices often, so always confirm the current figure on the vendor site before you buy.
Frequently asked questions
Which payment processor is best for a small UK business?
It depends on where you sell: online-first businesses often favour Stripe or PayPal, while in-person sellers lean towards a card reader from the likes of Square or SumUp. Many small firms end up using one for the website and another for the till. The best processor is the one that fits how your customers actually pay you.
How much do payment processors charge in the UK?
Most charge a percentage plus a small fixed fee per transaction, with rates varying by card type and whether the sale is online or in person. Some use simple flat pricing, others tiered or interchange-plus. Read the fee table for your typical transaction size, since a tiny percentage difference adds up over a year.
Are there monthly fees or just per-transaction costs?
Many popular processors charge per transaction with no monthly fee, which suits low or seasonal volume well. Higher-volume sellers can sometimes get lower rates on a monthly plan. Run your expected monthly turnover through both models, because the cheaper option flips as your sales grow.
Is the processor secure and UK compliant?
Reputable processors are PCI compliant and handle the heavy lifting of card security, including Strong Customer Authentication for UK and EU payments. Check that it supports the payment methods your customers expect, such as Apple Pay and Google Pay. Compliance is non-negotiable, so do not cut corners on a lesser-known provider.
