Best Payment Gateways for Small UK Businesses

To make an Ecommerce Store successful, you need a way of getting paid!

Fortunately, there are now many different options out there for small businesses and specifically for this post, I am going to be looking at pay as you go or all in one payment gateways as they do offer a few advantages to small businesses such as:

  • Only pay when you make a sale
  • No long term contracts
  • No monthly fees

Even though the advantages are very attractive, there is one trade off and that is that you do pay a higher transaction fee and they aren’t negotiable. Some of the payment gateways mentioned below do offer discounts for high volume users.

Option 1: PayPal

The one that every business owner loves to hate but as they are one of the biggest payment gateways in the world and an option that should be on every ecommerce website.

This is because customers trust using this option as they know that if anything should go wrong with the transaction, PayPal will help them out. Trust is a huge factor in encouraging people to buy from your site, especially when they don’t know who you are.

PayPal offer a couple of different options when it comes to using them on your site but I would recommend using the Express Checkout rather than the standard PayPal as it offers a better experience for the customer.


  • Sales of less than £20,00 a month – 2.9% + 30p
  • Sales over £20.000 a month – Contact PayPal
  • Chargeback Fee – £14
PayPal Logo


• Highly trusted by customers
• Easy to use dashboard
• Monthly Reports
• Industry standard fees
• Instant access to funds

PayPal Logo


• Disputes usually go in buyers favour
• Transaction fee’s not refunded
• Support can be hit and miss
• Buyer leaves site to complete transaction
• No recurring billing option

Option 2: Stripe

The company that disrupted the whole credit processing industry! Stripe was the first company to allow small businesses to accept credit card payments, without having to sign up to a lengthy and expensive contract.

This makes them a great option for small businesses and the combination of Stripe and PayPal, covers nearly all of the payment options that you could want.

Stripe also integrates with pretty much every ecommerce platform you can think of and have also introduced more advanced fraud protection, which they call Radar as well as 3D Secure compatibility here in the UK.


  • Standard Fees – 1.4% + 20p
  • International Payments – 2.9% + 20p
  • Chargeback Fee – £15

You can also add extra’s as well if you want to add more protection on your transactions. You can add their advanced Radar for an additional 2p per transaction and one I really like, which is Chargeback Protection at 0.4% per transaction.

Stripe Logo


• Easy for customers to use
• Buyers stay on your site during the transaction
• Competitive Pricing
• Recurring Billing

Stripe Logo


• Set-up can be more difficult than PayPal
• Transaction Fees not refunded
• Support can be inconsistent
• Takes longer to get access to funds

Option 3: Klarna

The third option is a relatively new payment gateway but just like Stripe, Klarna have really shaken things up in the industry. They did what Stripe did to credit card payments to flexible payments and retail finance.

Prior to Klarna, to even be considered by retail finance companies, you needed to have a significant online turnover. With many requiring a minimum of £1 million annual turnover and the smallest requirement I saw was £250,000 and both of these are way out of the scope of any new ecommerce store.

That is where Klarna come in, they offer a variety of different payment options such as pay after 30 days, pay in 3 instalments or finance options up to 36 months. You do still have to be approved by Klarna but the requirements are much lower and many new businesses do get approved.


Finding out Klarna’s fees is not that straight forward as they don’t advertised their fees on their website. The only set fees I could find were courtesy of my friends at EKM, according to them fees start at around 2.49% but to get exact fees, you do need to contact Klarna directly.

Klarna Logo


• Easy for buyers to use
• Multiple payment options
• Merchant gets payment upfront
• Lots of platform integrations

Klarna Logo


• Transaction fees not easily accessible
• Some refund related complaints/issues
• Support can be inconsistent

Option 4: Amazon Pay

One payment gateway that is starting to gain popularity is Amazon Pay and that is simply down to the popularity of the Amazon retail site. Amazon Pay allows you to leverage this popularity on your own site as people can pay using their Amazon account.

This makes the customers checkout process extremely easy for your customers to buy from you as they use the credit card information that they already have stored on their Amazon accounts.

Amazon Pay might not be your most popular payment gateway but giving people multiple options to pay is never a bad thing.


  • For sales up to £50,000 – 2.7% + 30p
  • Sales above £50,000 – negotiable
  • Chargeback fee – £14
Amazon Pay Logo


• Name recognition
• Competitive fees
• Fees returned after refund
• Lots of platform integrations

Amazon Pay Logo


• Some reported issues with Account freezing/closures
• Support can be inconsistent

Option 5: Nochex

An often overlooked payment gateway is the UK based Nochex. In the early days of Ebay, Nochex was on one of the most popular payment options along with PayPal. Following the breakdown of the Ebay/Nochex relationship, they focused on creating an ecommerce payment gateway.

The offering from Nochex is very good, you get a fully PCI compliant payment gateway that offers 3D Secure as standard. To get access to the full merchant account, you do need to pay a £50 set up fee but then you only pay when you use the platform.

The one thing that does hold Nochex back is that that unlike many other payment gateways is that your business name does not appear on the bank, instead it says Nochex and this has led to some chargebacks/disputes being raised.

This is also why Nochex has a poor rating on trustpilot as nearly all of the complaints are about merchants who use Nochex, rather than the company itself. Many merchants who use the gateway are very satisfied with the service.


  • Merchant Account Opening Fee – £50
  • Transaction fee – 2.9% + 20p
  • Chargeback fee – Unknown
Nochex Logo


• UK Based payment gateway
• Competitive fees
• 3D Secure included for free
• Funds instantly available

Nochex Logo


• Business name doesn’t appear on bank statement
• Lacks name recognition
• Transaction fees not refunded


So there you go, my top 5 choices of payment gateways for small businesses in the UK. The good thing is that nearly all ecommerce platforms such as Shopify, ShopWired and EKM all offer integration with these platforms, making the set up process much easier.

If your business is growing and generating substantial turnover every month, for example £10,000+, then traditional payment gateways such as WorldPay or SagePay but be aware that these do come with some of the things that I mentioned at the start of this post.

Hi, I'm Paul, the Owner and Founder of EcommerceGold.
I ran my own Ecommerce Business for over 7 years and now help others start their own online retail empires!