Best Online Payment Systems for Small Businesses

Online shopping accounts for around 26% of UK retail sales, according to the Office for National Statistics, and has been steadily increasing over the past five years. So, if you’re a small business looking to cash in on the action, you’ll need a reliable merchant account provider for taking payments online.

Based on our research and testing, takepayments offers the best online payment gateway for small businesses. It’s an affordable solution, since takepayments offers custom pricing to match your budget, and its online payment gateway integrates with over 50 popular shopping carts, including WooCommerce and Magento. takepayments’ affordability also earnt it a spot in our list of the top credit card machines for small businesses.

However, takepayments doesn’t offer a website building tool, so if your business doesn’t have a website yet, you might prefer providers like Square or SumUp, who offer an online store builder plus payment gateway.

Or, use our comparison tool which will generate bespoke quotes for online payment services that are tailored to your specific needs.

Top Systems for Taking Payments Online: Overview

Let’s start with an at-a-glance view of our top six merchant services for taking online payments, with information on how we’ve rated them and what their transaction fees are.

1. takepayments: Best for Flexible Pricing

takepayments offers a several systems for merchants who need to take online payments, meaning it can suit a variety of business types.

Online payment solutions:

• Online payment gateway (integrates into existing website)
• Pay by link (send to customers via email)
• QR code ordering (QR code links to online menu and payment page)

Why we recommend takepayments for online payments

takepayments caters specifically to small businesses, and offers competitive custom transaction rates, designed to match your transaction volume and revenue. This can work out cheaper than using a provider with set fees and rates, especially if your business has a high volume of monthly card transactions.

If you plan on selling through a website, takepayments offers an online payment gateway that integrates with 50 popular online shopping carts, including WooCommerce and Magento, so there’s a good chance it will work with your existing website.

takepayments also offers a solution for hospitality businesses, thanks to its QR code ordering system, beepaid. This gives you access to a unique QR code, linked to a menu page and an online payment page. takepayments will build all this for you, removing a lot of the hassle.

Lastly, if you offer services, you can also be paid via invoices, thanks to takepayments’s pay-by-link service. This removes the need for a website, since you can simply generate links and branded emails via takepayments’s Merchant Management System.

Reasons to avoid takepayments

We don’t recommend takepayments’s online payment gateway to small businesses with limited technical skills, since integrating it into your existing website might require some minimal coding.

If that’s you, you’ll find it easier to work with a provider that offers an online store builder as well as payment solutions, like SumUp, Square, or Shopify. This removes the need for you to integrate a separate payment page into your website, since the work has already been done for you.

We also don’t recommend takepayments for retail businesses that primarily sell online, since while takepayments offers online solutions, it doesn’t specialise in ecommerce. Once again, you’ll be better off with a provider that’s also an online store builder.

2. Worldpay: Best for High Volume Sellers

Worldpay offers two package solutions for selling online via payment gateway or link, and has custom pricing for businesses that process over £75,000 a year in card transactions.

Online payment solutions:

• Online payment gateway (integrates into existing website)
• Pay by link (send to customers via email)

Why we recommend Worldpay for online payments

Worldpay is a highly trusted merchant services provider, and is used by large enterprises as well as small businesses. It provides merchant services globally, and offers specialised solutions for businesses selling online internationally. This includes accepting over 120 currencies, and allowing you to accept regional payment methods, on top of global ones like Apple Pay.

WorldPay currently offers two bundled online payment solutions, Worldpay eCommerce and Simplicity Payment Gateway, both of which include an online payment gateway and a pay-by-link function for invoices.

A Worldpay payment page can be hosted on its site or integrated within your own website, which offers a lot of versatility. It integrates with popular ecommerce builders and shopping carts, including Shopify and Opencart.

eCommerce comes with no monthly fees, and transaction fees starting at 1.3% +20p for low-volume businesses, while Simplicity has a monthly fee of £19.95, and transaction fees starting from 1.5%. In both cases, transaction fees are lower than the 1.75% UK average. If you process over £75,000 a year in card payments online, you’ll likely get even lower transaction fees than the ones you see above.

Reasons to avoid Worldpay

Wordpay has a long contract length of 18 months, which is six months longer than the average of 12 months. This doesn’t offer businesses a lot of flexibility, and although you can terminate your contract early, this will incur exit fees. For this reason, we don’t recommend Worldpay to new businesses still figuring out what services they need, or ones that don’t want to be tied to a provider. There are plenty of affordable zero-contract options for selling online, such as Square and Stripe.

Additionally, although Worldpay offers low transaction fees, a contract with them often comes with a lot of additional monthly fees, which make it an overall expensive option. You’re likely to pay fees of at least £5 per month for PCI compliance, as well as ones for fraud maintaining fraud protections, and servicing your account.

Lastly, Worldpay doesn’t have a QR code or online ordering solution for hospitality businesses, and is heavily geared towards retailers. For hospitality-friendly merchant services providers, we recommend takepayments, Square, or SumUp.

3. Square: Best All-in-one Provider

Square is a zero-contract provider that offers a host of solutions for taking payments online, from a free online retail store or online ordering store builder, to invoices, to QR code ordering.

Online payments solutions:

• Online store builder with integrated payment gateway (suitable for services, retail, and hospitality)
• Invoices (pay by link via email)
• QR code ordering

Why we recommend Square for online payments

Square offers an all-in-one solution when it comes to taking payments online. It has an online store builder that comes with a Square payment gateway, eliminating the need for you to integrate one into your website – no coding necessary. It aims to cut out the hassle of keeping tabs on your online transactions, letting you track all your sales from one place.

As well as being easy to create and use, Square’s online store builder comes with no monthly fees, besides transaction fees, making it an affordable solution. You can, however, upgrade to a paid online store, for £20 to £64 per month, which we recommend to small businesses that are experiencing increasing online sales.

Square has solutions for retail, hospitality, and services businesses like salons, making it one of the most versatile providers on the market. Services businesses can also benefit from Square’s invoicing tool, which like the online store builder, has a free plan, or a paid plan at £20 per month, which comes with additional features like batch-sending and custom email layouts.

If you like the look of Square’s free tools, but think the price of the paid premium versions is a little high, don’t worry. Square’s free tools aren’t just test versions designed to make you upgrade to the paid version, they’re fully functional. Plus, Square is fully transparent with its pricing, and doesn’t come with hidden fees (PCI compliance is handled at no extra charge for example), so what you see is what you’ll pay, no more.

Reasons to avoid Square

Square’s transaction fees are a little on the high side, to compensate for the lack of monthly fees, and they don’t go down by much if you’re on a paid plan. Its online transaction fees are a little ore than Worldpay’s, at 1.4% + 25p on the free and £20 per month plans, and 1.4% + 15p on the £64 per month plan. However, Square’s invoicing fees are much higher, at 2.5% on both the free and £20 per month plan.

Square does offer custom transaction rates for high volume sellers, but its threshold for what qualifies as high volume is higher than Worldpay or takepayments, so if you’re looking for the cheapest rates, those are the providers we recommend.

Square’s online store builder is also quite basic when it comes to design choices and customisation, so if you want to create a unique store, we recommend Shopify. Plus, it doesn’t support multi-currency payments, so international sellers will do better with Worldpay.

4. Stripe: Best for Security

Stripe offers a payment gateway that businesses can embed directly into their website, and advanced fraud detection that detects unusual patterns in payment flow.

Payment solutions:

• Payment gateway (embedded into website, customers stay on the same page)
• Invoices (send emails with link to payment page)
• Pay-by-link (send users to a payment page to sell limited products or subscription, no website required)

Why we recommend Stripe for online payments

Stripe is an affordable option for small businesses with a low transaction volume. It doesn’t charge monthly fees for the vast majority of its services, instead, services are charged as an extra percentage cut or fixed fee on transactions.

This is the case for Stripe’s excellent fraud prevention software. Stripe’s proprietary anti-fraud system, Radar, costs a fixed fee of 4p per screened transaction. It uses machine learning to detect unusual patterns in transactions and stop fraud. Besides Radar, Stripe has a few other programs to boost security, including customer identity verification, which costs £1.25 per verification.

In terms of its online payments solutions, Stripe offers a payment gateway page you can embed into your existing website. This means your customers can easily pay there and then, without the annoyance of getting redirected somewhere else. You can also customise the logo, images, and colour to make the image seamlessly align with your website. This is very useful for online businesses keen on providing a good customer experience, but matters less if the bulk of your activities take place in a brick-and-mortar shop.

Stripe also has an invoicing tool, which allows you to email payment links to customers (0.4%-0.5% per paid invoice), and a pay-by-link tool, which is a solution for selling limited products or subscriptions online without a website. You can share the link with customers on any platform, and they’ll be taken to a payment page.

Reasons to avoid Stripe

We don’t recommend Stripe to businesses with a high transaction volume. Since most of Stripe’s payment services are charged solely per transaction, fees can really add up.  Stripe’s standard transaction fees are also not particularly low, at 1.5% + 20p per standard UK card. This is similar to what Worldpay and Square charge, but with Stripe there are no customised fees for high volume sellers.

Stripe is also heavily focused on facilitating payments for retail businesses, or those selling subscriptions, and doesn’t have systems in place for hospitality businesses, like online ordering.

Lastly, Stripe takes a little longer than its competitors to transfer your funds to your business bank account. Most competitors now transfer funds the next working day, but with Stripe it can take up to three days. However, for an extra 1% fee on the payout volume, you can receive your funds in minutes. Depending on the payout amount, this can be an expensive option.

5. SumUp: Best for New Businesses

Online payment solutions:

• Online payment gateway (integrate into existing website via plugin or API)
• Online store builder with integrated payment gateway
• Invoices (send payment links via email)
• Pay-by-link (send payments links to customers on any platform)

Why we recommend SumUp for online payments

SumUp is an all-in-one platform that’s easy to sign up to, and comes with no contract or monthly fees, making it a great solution for new businesses looking to take payments online.

It offers a plethora of ways to take payments, including a free online store builder, which comes with SumUp’s payment gateway pre-integrated into it. This is means there’s no fussing around with code or plugins, although SumUp also has these option for technically savvy businesses.

SumUp also has an invoicing tool, which has a free version, and a £7 per month Pro version. This lowers transaction fees from 2.5% to 1.25%, and allows you to customise the design of your invoices, and create ones in different languages. And lastly, there’s a pay-by-link feature, which like similar features offered by competitors, allows you to send payment links to customers on any platform, and is a great options for startups selling on social media.

All of SumUp’s tools for taking payments come with no monthly fees, and a transaction fee of 2.5%. However, if you sign up to SumUp One for £19 per month, this lowers transaction fees to 0.99% (including for invoices and online store payments). It’s an option worth considering if you plan on becoming a frequent online seller, since SumUp’s 2.5% is very high, and will eat into your profits the more transactions you process.

Reasons to avoid SumUp

As we’ve established, on its free plan, SumUp’s transaction fees are quite high, plus it doesn’t offer customised transaction fees for high volume sellers. Your only option to lower fees is to sign up for the £19 per month SumUp One plan. The 0.99% transaction fee you get for doing this is actually quite low compared to average online fees, so you’re not getting a bad deal.

That said, SumUp’s products will soon feel very limiting if you plan on growing your business. For example, its online store builder is very basic, and it doesn’t have an advanced version for larger businesses, unlike its rivals Square and Shopify.

If you sell products online as part of a side hustle, or want to use SumUp for QR code ordering at your independent restaurant or bar, you shouldn’t run into any issues. However, if you plan on building an ecommerce business, we suggest you choose a provider up to the task, like Shopify or Worldpay.

6. Shopify: Best for Ecommerce Retailers

Online payment systems:

• Online store with integrated payment gateway (can be connected to social media for omnichannel selling)

Why we recommend Shopify for online payments

Shopify is the best ecommerce platform for small businesses. So, if you’re an online retail business, we strongly recommend Shopify if you want to simplify and use the same provider for both running your website and processing transactions.

Shopify has its own payment processing service called Shopify Payments, which works seamlessly with Shopify websites. It is possible to integrate third-party payment processors into a Shopify website, but this incurs extra transaction fees of 0.2% to 2%, on top of third-party fees, so choosing Shopify Payments is the most affordable choice.

Another advantage to using Shopify for online payments and ecommerce is that it’s a highly scalable option, capable of accommodating even large enterprises, so the chances you’ll outgrow it are very slim.

You can start very small, with Shopify’s £5 per month Starter plan. This allows you to sell on social media, email, or SMS, with links that lead to a basic product page and payment page. The downside is that transaction fees are 5%, which is very high, so its not for regular sellers. Transaction fees quickly go down to 2% + 25p on the £19 per month Basic plan, and high volume sellers on the $2,300 USD per month Plus get custom rates.

If Shopify’s monthly fees seem quite high, don’t forget that, unlike with a lot of the other providers on this list, you aren’t just paying for online payment processing, but for an online store that includes advanced reporting and marketing tools, and can be used as a hub for omnichannel selling.

Reasons to avoid Shopify

Shopify isn’t a cheap option, in terms of both its monthly fees and its transaction fees. The price jump between the £49 per month Shopify plan and £259 Advanced plan is pretty steep for most businesses. You can find a cheaper online store builder and payment processor in Square.

Given that it is one of the most popular online store builders for small businesses, many clearly feel it’s worth the money, and we would tend to agree. However, if Shopify is out of your budget, don’t stretch yourself.

Additionally, Shopify is purely geared to retail businesses, and really doesn’t have any solutions for hospitality or services businesses. For that, we’d recommend takepayments or Square.

What’s the Difference Between an Online Payment Gateway and an Ecommerce Website?

An online payment gateway is the part of an online payment system that processes payments, whereas an ecommerce website is a software platform used to build and manage an online store (create products, organise them, track inventory, manage marketing etc.)

To help you visualise this, imagine you’re a customer. You use the ecommerce website when you click on its URL, peruse items, and add them to your cart. You use the online payment gateway when you click “checkout”, are prompted to enter your card or payment method details, and have your order processed.

Online payment gateways can be integrated into a website via plugin or API, but nowadays, many ecommerce platform providers also process payments, as is the case with Square or Shopify. This means that when you build an ecommerce store with them, their payment gateway will already be built-in, with no extra integration necessary.

Most ecommerce platform builders also give users the option of using a third-party payment processing provider, in which case businesses will need to integrate that third-party’s payment gateway into their online store using a plugin or API.

Tips for Taking Payments on Your Website

Online shoppers can be a fickle bunch, with almost 75% of online shoppers abandoning their baskets before completing a purchase. Transactions can break down in seconds if you don’t give your customers a smooth and snappy shopping experience.

Follow these tips to keep people on your site and inspire them to buy:

1) Make it easy

Don’t make your users have to sign up for an account to pay. It’s one of the biggest barriers to making a sale. People can’t be bothered to enter their details and will often choose to abandon the purchase rather than signing up. By offering guest checkout you simplify a user’s journey and boost your chances of them making a purchase.

Choosing a payment processing provider that accepts other payment methods besides credit and debit cards, like Google Pay, Apple Pay, or PayPal, can also boost your sales. These payment methods don’t require your customers to enter any card details, making a sale even easier.

2) Make it look good

If you’re using two providers, one for payment processing and one for online store building, try to make your payment page look like it belongs to your website. Add your logo and colours to ensure a visually consistent path from browser to buyer. If your customer feels like they’re lurching around different websites to make a payment, they may just abandon their cart.

Most providers that only offer online payment gateways, and not online store building, like Worldpay or Stripe, understand this, and let you customise their payment pages to match your website.

3) Make it quick

Don’t ask your customers for lots of details or make them navigate long, data-heavy forms. Only take the minimum amount of information you need for the transaction to take place. This speeds up the process and is sure to inspire trust in your website and services.

How We Test Merchant Services

To bring you this review, we tested and researched merchant services providers. We evaluated each across five main areas of investigation, and 23 subcategories.

Here’s what we looked at:

• Hardware: we looked at each provider’s card machines on offer, accounting for size, weight, and portability, and assessed their connectivity, interface, receipt printing, and battery life.
• Software: we looked at each provider’s payout times, reporting and security features, EPOS functionality, and what systems it integrated with.
• Pricing: we compared monthly fees, card machine costs, transaction fees and contract lengths against the features each provider offered, to determine value for money.
• Ease of use: We had several different average users test providers’ card machines to see how intuitive each one was to use, and how quickly everyday tasks could be complete.
• Help and support: we assessed providers based on how many different support they offered, and how available and responsive the support team was.

We then gave each provider an overall score based on how well they fared in the above assessment categories.