Best Payment Gateway Providers

So, you have set up your new business startup and are ready to make sales. But how do you safely process online transactions?

You will need a merchant account to help process payments in your business.

However, to process online transactions, a payment gateway is required. But, what is a payment gateway and which provider offers the best plan for your type of business?

In this article, we will explore the concept of payment gateways and offer you expert insights into the best payment gateway providers currently available for your business.

Provider	Score	Details
1. Square	★★★★★	Click Here
2. PayPal	★★★★★	Click Here
3. Opayo by Elavon	★★★★★	Click Here
4. Worldpay	★★★★★	Click Here
5. Smartpay Anywhere From Barclaycard	★★★★★	Click Here
6. Xpate	★★★★★	Click Here
7. Adyen	★★★★★	Click Here
8. SumUp	★★★★★	Click Here
9. GoCardless	★★★★★	Click Here
10. Stripe	★★★★★	Click Here

What Is a Payment Gateway Provider?

A payment gateway provider is a company that provides businesses with the ability to process payments online. 

The payment gateway provider supports your business through the payment processing journey, utilising expert security features to protect your finances from fraud. 

Some providers offer the additional feature of verifying the customer’s bank account before the transaction takes place.

Providers may also offer other add-on features, such as PCI compliance to safeguard your customers’ data, incorporating with mobile banking apps, or integration with Xero web-based accounting software to reduce your admin tasks and increase accuracy.

Best Payment Gateway Providers

Which payment gateway service offers you the most benefits for the lowest fees and charges?

Take a look at our best payment gateway providers below and see how they compare.

1. Square — Best for Simplicity

Prices: 

• Payment gateway fee: 1.4% to 2.5% per transaction plus a fixed fee

Square provides payment gateway services with a simple structure so you know where your finances stand. You can add additional features such as PCI compliance so you know your data is safe and secure.

With no monthly fees or long contracts, you can run your business productively and with ease. Only pay a fee to Square when a sale is made, yet you can also add-on additional features such as the ability to pay with a QR code.

As there is no monthly fee to use Square’s payment gateway service, you will only pay a fee with transactions made. The current fee payable is between 1.4% to 2.5% of the transaction value although a fixed fee of arou

2. PayPal — Best Overall Provider

Prices:

• Website transaction fee: 2.9% + 30p for UK transactions
• Website transaction fee: 1.2% + relevant fixed fee for international transactions

PayPal has 230 million customers across the world, 20 million of those customers being based in the UK. It, therefore, offers a trusted brand that has amassed a wealth of experience over the years for both businesses and individuals.

PayPal is also a brand that can be integrated with other software applications, such as accounting software. For example, you could import your PayPal account into Xero web-based accounting to immediately link business transactions into your account. Not only does this enhance accuracy, but this automation will save you time spent on admin tasks.

When accessing a payment gateway for online payments from PayPal, you can expect to pay zero monthly fees. Such savings offer an immediate benefit for small and medium-sized businesses, particularly those businesses that are new to the industry and are keeping a close eye on their startup business costs.

To process payments through the payment gateway, your business will pay a fee. When using PayPal’s service for UK payments, you will pay 2.9% of the transaction value plus a fixed fee of 30p per transaction.

International transactions carry a fee of 1.2% of the purchase value in addition to a fixed fee which varies according to the country. 

3. Opayo by Elavon — Best for Choice

Prices:

• Monthly plans from £15 per month with no set-up fee
• Payment gateway fees: From 0.99% per transaction
• Pay-as-you-go plans with zero monthly cost and a £29 set-up price
• Payment gateway fees: 1.75% per transaction
• Additional options for larger businesses

Opayo from Elavon is a dominant payment gateway provider that offers a range of choices to suit the needs of your business.

Choose a pay-as-you-go plan with no monthly fees and just £29 to set up. You will then pay a fee of 1.75% of the transaction value every time a customer buys your goods or services. You will receive a pocket-sized card reader to use in your business.

You will obtain a low transaction fee of 0.99%, however, when opting for a Business Booster monthly plan. Your monthly cost will start at just £15 per month and you can choose from two different card reader options.

However, if you are looking for wider choices for your business, consider the Operate Smarter plan. Costing you £40 per month and a transaction fee of 1% of the transaction value, you will receive a tablet-sized terminal, complete with touchscreens. 

The premium plan available from Opayo is the Business Control plan, providing you with a touchscreen Talech Register with a 15.6-inch screen. You will pay a monthly fee of £62 if you choose the Business Control plan, in addition to a transaction fee of 1.2% of the transaction value.

4. Worldpay — Best for Scalability

Prices:

• Payment gateway price on a monthly plan: £19.95 per month
• Monthly plan transaction fees: 2.75% for credit cards and 0.75% for debit cards
• Pay-as-you-go transaction fees: 2.75% + 20p

Worldpay is the best choice of payment gateway for a growing business, allowing your business to achieve scalability in a short time period.

Worldpay offers monthly accounts as well as pay-as-you-go accounts, enabling you to choose which format is beneficial to your business. You could begin with a pay-as-you-go account and progress to a monthly account once your business has secured stability. However, you will need to sign a contract and abide by this.

An additional benefit to utilising a Worldpay account is that you can add PCI compliance, taking care of your obligation to safeguard customer data and confidentiality.

When a transaction is made online on a monthly plan, you will pay a fee of 2.75% of the transaction value when the payment is made via credit card. If the payment is made with a debit card, a fee of only 0.75% is applicable. Monthly plans require an additional fee of £19.95 per month.

However, if you opt for the pay-as-you-go account, you will pay a uniform rate of 2.75% of the transaction value regardless of whether a credit card or debit card has been used. An additional charge of 20p per transaction is also applicable.

5. Smartpay Anywhere From Barclaycard — Best for a Reputable Brand

Prices: 

• Payment gateway monthly cost: From £15 per month
• Payment gateway pay-as-you-go cost: 1.6% per transaction

Smartpay Anywhere is a payment gateway service from Barclaycard, utilising a well-known brand that you can trust. 

When opting for a Smartpay Anywhere account, you can choose from a pay-as-you-go or monthly option and you will receive a pocket-sized card reader for contactless and online payment.

The pay-as-you-go choice will cost you a one-off fee of £29 plus VAT to set up the system. You will then pay a fee of 1.6% per transaction value which is a reasonable fee in comparison to other payment gateway service providers.

However, if you choose to sign up for a monthly plan, you will pay £15 per month, plus VAT, and you will receive a card reader that accepts contactless and chip and PIN transactions. You will need to abide by an 18-month contract. The transaction fee to pay is 1.6% of the transaction value. 

6. Xpate — Best for Instant Payments

Prices: 

• Payment gateway fees: 1.3% per transaction + 20p

Xpate is a payment gateway provider with a difference. You will receive your customer payments instantly when some providers do not transfer your cash for several days.

When you sign up to Xpate, expect zero setting-up costs and no monthly fees. 3D secure authentication is included in your plan in addition to payment links, taking your business into the next technological age.

When a customer purchases goods or services from your business, you will pay a fee of 1.3% per transaction in addition to a 20p fixed charge. This fee is applicable for both credit cards and debit cards.

International cards where currency conversion is required are charged a fee of 2.8% of the transaction value, in addition to the fixed fee of 20p.

7. Adyen — Best for International Purchases

Prices: 

• Payment gateway fee varies according to the payment method

Ayden tailors their transaction fees to the payment methods used in each transaction. There are no monthly contracts or monthly fees, and you can expect zero set-up costs also. Offering a single integration, all payment methods are accepted. You can also decide the currency you want to be paid in.

The fees you will be charged for payment processing vary according to the payment method and the country the payment was made. For example, when a customer chooses to make a purchase using ClearPay in the UK, you will pay a fee of 4.19% of the transaction value in addition to flat fees of 11p and 30p respectively.

When a payment is made using Alipay in the UK as well as the USA and Australia, you will pay a transaction fee of 3% of the value in addition to a flat fee of 11p.

Alternatively, when a payment is made using Zip in the UK, you will pay a transaction fee of 4.25% and a flat fee of 11p. 

8. SumUp — Best for Zero Contracts and Zero Monthly Fees

Prices: 

• Payment gateway fee: 2.5% per transaction

SumUp provides payment gateway services with a simple structure so you know where your finances stand. You can obtain payment gateway services with no contract and with zero monthly fees, providing a flexible option whatever your business size.

In addition, you can integrate your SumUp account to other software applications, such as QuickBooks. Such integration ensures that your accounting software receives data for all transactions in your business. This saves you time away from admin tasks so you can put more time into making sales.

SumUp offers excellent customer service so that support is accessible when you need it. You will also access your cash fast, typically the next working day.

9. GoCardless — Best for Low Price Pay-As-You-Go

Prices:

• Standard pay-as-you-go transaction fees: 1% + 20p
• Advance pay-as-you-go plan transaction fees: 1.25% + 20p
• Pro pay-as-you-go plan transaction fees: 1.4% + 20p
• Custom plans available

GoCardless is a superb payment gateway provider if you know you want a pay-as-you-go plan. You can choose from one of several pay-as-you-go plans, each with zero monthly fees and set-up costs.

Every plan comes complete with a zero transaction fee benefit for the first 90 days of use, helping you settle into your business and start generating sales. 

Integrations with software applications such as Xero or QuickBooks will save you time with admin tasks, ensuring that all transactions are automatically updated to your accounts.

When signing-up to a standard pay-as-you-go plan, you will pay a transaction fee of 1% in addition to a fixed fee of 20p. The fixed fee remains the same whichever plan you choose, although the transaction fee rises to 1.25% with the Advance plan and 1.4% if you opt for the Pro plan.

You could also contact GoCardless for a custom plan, tailored to your business exactly.

Each plan adds increased security features and fraud prevention, depending on the level of plan you purchase.

10. Stripe — Best for Package Building

Prices: 

• Payment gateway fees per transaction: 1.4% to 2.9%
• A fixed fee of 10p applies for all payment gateway transactions

Stripe is a fantastic choice for e-commerce businesses that sell goods and services completely online. However, businesses that sell both online and in physical transactions will be impressed with this payment gateway provider.

When a transaction is made through the payment gateway, you will be charged a fee of between 1.4% to 2.9% of the transaction value. You will also face a fixed fee of 10p for every transaction made.

Stripe also offers a unified platform to integrate other services into your account. This includes sending invoices and managing how your business spends money.

How Does a Payment Gateway Work?

A payment gateway works to act as a third party when a payment is processed, protecting the interests of the customer and the business. This is the safe method to take when you accept online payments for the goods or services sold in your business. 

The payment gateway passes the customer’s information to the card issuer, which verifies whether the transaction is authorised. Usually, a transaction will be authorised if the customer has enough money in their bank account or enough credit available on their credit card.

Of course, the customer will need to enter the correct security details for the transaction to be authorised.

If the transaction has been authorised, the payment gateway sends the money to the business’ account.

Follow these steps to understand how a payment gateway works:

• Step 1: The customer makes the first step as they initiate a purchase. When shopping online, the customer will choose the goods to buy and then check out. They will enter their debit card or credit card details and choose to press the ‘Pay Now’ option.
• Step 2: Once the customer has chosen to buy goods from the business’s website, the site will transfer the customer’s financial details to the payment gateway.
• Step 3: The payment gateway is now in control of checking the transaction and sends the request for payment to the issuer of the customer’s credit card or debit card.
• Step 4: The issuer then verifies the payment details and communicates to the payment gateway whether there are sufficient funds to authorise the payment.
• Step 5: If the transaction is authorised, the payment gateway will send the money from the payment to the business.

How Are Payment Gateways Used In Business?

Payment gateways are versatile payment processing options that are used practically in business every day with a merchant account.

Here are some of the main ways that you might use a payment gateway in business:

Subscriptions

If your business offers a subscription service to customers, you will use a payment gateway to process the payments. For example, you could offer a platform that streams content to the user, requiring a subscription which is automatically collected through the gateway each month.

In-App Purchases

Your business may utilise in-app purchases, offering customers the chance to purchase additional content or other apps for a price. The payment gateway will be used to process such payments.

Online Shopping

Regardless of your business size, any online shopping requires a payment gateway. When a customer chooses items to purchase from your website and they decide to check out, the transaction travels through the payment gateway to protect your own interests and the interests of the customer.

Hospitality Bookings

Whenever a booking is made online for travel, accommodation or hospitality, the booking is secured via a payment gateway. The customer details are protected from fraud, ensuring that data compliance is fulfilled.

Online Marketplaces

An online marketplace like eBay also uses a payment gateway to process payments. When a customer purchases goods from the online marketplace, a payment gateway is used to help process the payments. 

Why Is a Payment Gateway Important?

A payment gateway is important when selling online so you can protect your own money and your customers’ money. Without a payment gateway, your business and your customers could be vulnerable to fraud and theft.

Depending on the card issuer and the payment gateway provider used, additional security features may be used through network tokenization.

What Is Network Tokenization?

Network tokenization is the use of tokens used in the payment processing procedure instead of primary account numbers, or PANs. Payment data from the customer is hidden throughout the payment processing chain to prevent sensitive data from being stolen or vulnerable to fraud.

For example, the customer’s card number, security number, and expiry date will be replaced by digital network tokens. The specific financial details are hidden during the entire processing procedure, protecting their cash and their bank account. 

How Does Network Tokenization Work?

Network tokenization works by preventing the customer’s financial details from becoming compromised during the payment process.

When making an online purchase, the customer will enter their details into the computer or mobile device. They will typically enter the 16-digit credit card or debit card number along with the card expiry date and 3-digit security number.

As the transaction moves through the gateway, network tokens are requested and shared along the way. The network tokens stay with the customer’s data during the entire payment process.

What Are the Benefits of Network Tokens?

Including network tokens in your payment processes provides several benefits.

Your customer’s data is safe when using network tokenization. Network tokens ensure that sensitive card details are not exposed, preventing the risk of data being stolen. Your business will increase its reputation with customers for safeguarding their data and money.

Customer satisfaction increases as checkouts are faster. There are fewer issues to address when a transaction is processed and verified, ensuring that your business makes a higher volume of sales.

What Are the Disadvantages of Using a Payment Gateway?

Using a payment gateway provider will cost your business money. Depending on the payment gateway provider you choose, you may need to pay the following fees and costs:

Set-Up Fees

You may need to pay set-up fees before you can use a payment gateway to process payments and transactions. 

Typically, set-up fees may cost in the region of £30 and will secure your mobile card reader. However, a higher amount of set-up fees may be charged if you want to adopt a card reader that also accepts chip and PIN payments as well as contactless transactions.

There are payment gateway services that do not charge a set-up fee, however, or a contract to tie you to the plan.

Monthly Fees

If you choose a payment gateway with a monthly plan, you will need to pay a monthly fee. The fee typically costs from £15 to £75 and a contract may be required for at least 12 months.

However, a monthly fee will not be charged if you choose a pay-as-you-go plan that only charges a fee for transactions made.

Transaction Fees

Every payment gateway service will charge a transaction fee for the purchases made by customers. This means that you will be charged a percentage of the transaction value for the payment to be processed.

Usually, the transaction fee will fall between 1% and 5% of the purchase value. So, if a customer purchases a transaction worth £100, you will need to pay between £1 and £5 for the payment to be processed.

The specific transaction fee will be constant and you will know the expected fees when signing up to the plan to process payments. However, some providers will charge a higher fee for credit card payments or international payments.

Fixed Fees

In addition to transaction fees, your provider may charge a fixed fee for every transaction processed. Typically, his fixed fee will cost between 10p and 30p for every transaction made.

Some providers do not charge a fixed fee, however.

At a Glance, Pros and Cons

What are the benefits and limitations of using a payment gateway provider in your business? 

Check out our expertly crafted pros and cons:

Pros

✔️ Take online payments — Using payment gateway service providers ensures that you can take online payments for your business.

✔️ Happy customers — Your customers will be happy that they have the chance to pay online for goods and services, meeting their needs by expanding your accepted payment methods.

✔️ Support — Payment gateway service providers offer tailored customer service for your business so you can get the help you need when you need it.

✔️ Fraud prevention — Payment gateways ensure that the transactions made in your business are safe, helping to prevent fraud. Fraudulent transactions occur every 15 seconds so it is important to take all necessary steps and precautions.

Cons

❌️ Delays in receiving payment — Some payment gateways take a few days to transfer the money you have made from a customer sale. However, there are payment gateway options out there that do offer instant transfer.

❌️ Set-up costs — Depending on the provider and plan chosen, you might need to pay setting-up costs so you can use the service and obtain a card reader.

❌️ Transaction fees — When a customer purchases goods or services from your business and is processed by the payment gateway, you will need to pay a transaction fee. The transaction fee is usually between 1% and 5% of the transaction value.

❌️ Fixed fee — In addition to the transaction fee, some gateway providers charge a fixed fee for every transaction processed.

Leading Payment Gateway Providers for Business: The Verdict

With so many payment processing options for your business to choose from, it is important to choose from the best online payment gateway providers. 

Ideally, the best payment gateways offer a lower monthly fee whilst ensuring you can accept payments online with low transaction fees. Depending on the nature of your business, you might also want to ensure you can accept international payments and credit card payments for your customers.

Our best overall payment gateway is PayPal, offering your business no monthly fees and a reliability that other payment gateway providers cannot match. However, you will face a transaction fee of 2.9% for UK transactions, plus a fixed fee of 30p. International transactions come with a lower transaction fee of 1.2% and a fixed fee depending on location.

However, other payment gateways should not be discounted due to their lack of brand awareness. Go Cardless offers varied pay-as-you-go options with transaction fees as low as 1%, although a fixed fee of 20p per transaction is required.

Or, opt for Xpate to receive your customer payments instantly instead of waiting days for the cash to arrive in your account. You will pay a transaction fee of 1.3% plus a 20p fixed fee, although no set-up costs or monthly fees apply.

Related Guides:

• Best Cloud-Based Payroll Software Companies
• Cheapest Card Payment Machines in 2024
• Best Card Machines for Small Businesses
• Cheapest Ways to Take Card Payments in 2024