A Guide to Online Payment Methods UK Businesses Use

A customer reaches your checkout at 9.40pm with a basket worth £180. The card option is there, but their card is in the other room; the wallet option needs a device they are not on; and they are not going to type sixteen digits into a phone in bed. Whether that sale completes depends on whether you offer the way they actually want to pay. That is the whole reason to think about online payment methods rather than defaulting to whatever your platform switched on.

The UK is well served. UK Finance reports that debit cards remain the most-used payment method in the country and cash has fallen to roughly one in ten payments, while Open Banking Limited counted more than 16 million active open banking users and over 350 million open banking payments in 2025. Shoppers are comfortable with several methods; the job is to pick the right mix for your customers and your margins. This guide covers the main options, what each costs, how fast you get paid, and how to decide.

The main online payment methods in the UK

Debit and credit cards. Still the default at UK checkouts. Familiar to every customer and accepted everywhere, but the most expensive route for the business: once interchange, scheme and acquirer fees are added, card acceptance typically costs between 1.5% and 3.4% of each sale (Payment Systems Regulator), funds usually arrive in one to three working days, and cards carry chargeback risk.

Digital wallets. Apple Pay, Google Pay and similar services store the customer’s card and confirm the payment with Face ID or a fingerprint, which makes mobile checkout quick. For the business they are card payments underneath, so fees and payout timing match your card rate. Our guide to digital and mobile wallets covers the differences.

Pay by Bank (open banking). The customer chooses their bank at checkout, is taken to their own Bank app, approves with Face ID or a fingerprint, and the money moves over Faster Payments. No card details are entered, there is no interchange, and the payment cannot be charged back. With Atoa, Pay by Bank costs from 0.7% + VAT and settles in seconds. Our explainer on how Pay by Bank works has the detail.

PayPal. Widely recognised and trusted, with buyer protection that some customers look for, particularly on marketplaces. Fees are among the highest of the options here and disputes are handled on PayPal’s terms rather than yours.

Buy now, pay later. Providers such as Klarna and Clearpay let the customer split a purchase into instalments. Useful for higher baskets, and now regulated by the FCA since 15 July 2026, which brings affordability checks and clearer rules. Atoa offers Pay Later for larger purchases through Abound; Atoa is the introducer, not the lender.

Direct bank transfer. Sending an invoice with your account details and waiting. Free of processing fees but slow, unreconciled and unpopular with customers, which is exactly the gap Pay by Bank closes.

Comparing online payment methods

Card, wallet and PayPal fees vary by provider, card type and volume; check your own statement rather than the headline rate.

How to choose the right mix

Most UK businesses need three things at the online checkout: cards because everyone has one, a wallet because mobile shoppers expect one, and Pay by Bank because it is the lowest-fee route and the customer does not need a card to hand. Add PayPal if your customers are used to it, and Pay Later if your average order is high enough for instalments to lift conversion.

Then test the mix against your numbers. On £600,000 of annual online sales, moving a third of payments from a 2.5% card rate to Pay by Bank at 0.7% + VAT saves roughly £3,000 a year before VAT, with the money arriving in seconds rather than days. Look at your transaction volume, your average basket, how quickly you need the cash, and whether you sell to consumers or to other businesses, where invoice-based Pay by Bank links often replace card entirely.

Watch the “free” trap too. Methods with no setup fee usually cost more per transaction, and freemium gateway plans tend to raise fees or cap features as you grow. The number that matters is total cost per £100 of sales, including fixed pence per transaction, chargeback fees and any monthly platform charge.

Where open banking fits

Open banking is the UK framework that lets a regulated provider, with the customer’s permission, initiate a payment straight from their bank account. For online checkout that means no card details to type or store, authorisation inside the customer’s own Bank app, lower fees because there is no card network in the chain, and settlement over Faster Payments in seconds. It is the method that has grown fastest since 2023 and the one most likely to change your cost base. Our open banking payments guide goes deeper.

Adding these methods to your website

You do not need to build anything. Atoa plugs into the platforms most UK businesses already run: Shopify, WooCommerce and Magento at the checkout, and Xero, QuickBooks and Sage for invoice payments. The full list is on our integrations page. If you sell without a storefront, a payment link sent by SMS or email does the same job, and the online checkouts page shows how Pay by Bank and cards sit side by side for the customer.

What to check before you sign with a provider

Four questions settle most decisions. What is the total fee per transaction, including fixed pence, chargeback charges and monthly minimums? How does it integrate with your platform and how many steps does the customer face? Is the provider FCA-authorised and compliant with UK payment regulations? And when a payment fails or a customer disputes a charge, who picks up the phone?

Final thoughts

Offer more than one way to pay, but choose them deliberately: cards for reach, a wallet for mobile, Pay by Bank for cost and speed, and PayPal or Pay Later where your customers expect them. Review the mix once a year against your fee statements. If you want to see what Pay by Bank and cards on one checkout would cost your business, get in touch.

FAQs

What are the most common online payment methods in the UK?

Debit and credit cards, digital wallets such as Apple Pay and Google Pay, Pay by Bank through open banking, PayPal and buy now, pay later. Cards remain the most used; Pay by Bank is the fastest growing.

How safe are online payments?

Card payments are protected by encryption and 3-D Secure; Pay by Bank is authorised inside the customer’s own Bank app with Face ID, fingerprint or passcode, so no card details are shared with the business. Choose a provider that is FCA-authorised and compliant with UK payment regulations.

How much do online payment methods cost a business?

Cards typically cost 1.5% to 3.4% all-in, PayPal around 2.9% plus a fixed fee, digital wallets the same as your card rate, and Pay by Bank with Atoa from 0.7% + VAT. Compare total cost per £100 of sales, not the headline rate.

How quickly will my business receive the money?

Pay by Bank settles in seconds over Faster Payments. Card and wallet payments usually arrive in one to three working days. PayPal credits your PayPal balance instantly but withdrawing to your bank takes longer.

Which online payment methods have no chargebacks?

Pay by Bank. Because the customer authorises the payment in their own Bank app, it cannot be charged back in the way a card payment can. Card, wallet and PayPal payments all carry chargeback or dispute risk.

Can I add Pay by Bank to Shopify, WooCommerce or Magento?

Yes. Atoa has integrations for all three, plus Xero, QuickBooks and Sage for invoice payments. See the integrations page for the current list.

Sources

• UK Finance, UK Payment Markets Report
• Open Banking Limited, open banking adoption data
• Payment Systems Regulator, card-acquiring market review
• Financial Conduct Authority, regulation of buy now, pay later
• Statista, most common online payment types in the UK