The Best PayPal Alternatives for UK Businesses

PayPal is one of the most widely used payment platforms in the world, but for UK businesses processing regular transactions, the costs and settlement delays can add up quickly. High percentage fees, funds that can be held without notice, and a checkout experience that pushes customers off your own site are prompting more businesses to look for a better fit.

If you are exploring a PayPal alternative for your UK business, here is a straightforward comparison of the main options available in 2026.

The main PayPal alternatives for UK businesses

Here are five of the most popular payment providers available to UK businesses today, with fees and key features compared.

Atoa

Atoa is a UK-based, FCA-authorised Pay by Bank payment provider. Rather than routing payments through a card network, Atoa moves money directly from a customer’s bank account to yours using the Faster Payments network.

• Pay by Bank fees start at 0.6% per transaction plus a small authorisation fee
  
  
• Settlement is instant, with no holding periods
  
  
• No contracts, no setup costs, no hidden fees
  
  
• Customers approve payments in their Bank app using Face ID, fingerprint, or passcode
  
  
• Accepts card payments too, including Visa, Mastercard, and Apple and Google Pay
  
  
• Works in-store, online, and remotely using QR codes, payment links, or integrations with Shopify, WooCommerce, and Xero
  
  
• No chargebacks on Pay by Bank transactions

Stripe 

Stripe is a developer-friendly platform with strong global reach and a broad feature set, well suited to businesses with technical resources.

• UK card fees: 1.5% + 20p per transaction
  
  
• Extensive API and integration options
  
  
• Settlement typically takes two business days
  
  
• No dedicated UK Pay by Bank product

Square 

Square is popular with retailers and hospitality businesses, particularly for its point-of-sale hardware and straightforward setup.

• In-person fees: 1.75%; online fees: 2.5%
  
  
• Free card reader available on sign-up
  
  
• Settlement next business day for most accounts
  
  
• Limited open banking or bank transfer capability

SumUp 

SumUp is a card reader-focused provider with simple pricing and a low barrier to entry.

• In-person fees: 1.69%; online fees: 2.5%
  
  
• Straightforward hardware-led setup
  
  
• Fewer integrations than Stripe or Square
  
  
• Better suited to lower-volume businesses than high-turnover or multi-site operations

GoCardless 

GoCardless specialises in recurring Direct Debit payments rather than one-off transactions, making it a different kind of alternative to PayPal.

• Fees starting at: 1% + 20p per transaction, capped at £4
  
  
• Strong for subscription businesses or regular invoice collection
  
  
• Requires customers to set up a Direct Debit mandate upfront
  
  
• Not a card payment provider

Comparison table

Which option is right for your business?

The right PayPal alternative for your UK business depends on how you take payments and what you are optimising for. Stripe and Square offer solid all-round coverage, though fees are noticeably higher than Pay by Bank. SumUp works well at lower volumes but lacks the integrations and scalability that growing businesses need. GoCardless is a strong fit for recurring billing but not for one-off or in-person payments.

For businesses that want the lowest transaction fees, instant settlement, and no lock-in, Atoa is the most practical PayPal alternative UK businesses can switch to today, without adding complexity or committing to a contract.Book a free demo with the UK-based team for a guided walkthrough.

Frequently asked Questions

What are the best PayPal alternatives for UK businesses?

The best PayPal alternatives for UK businesses include Atoa, Stripe, Square, SumUp and GoCardless, and the right one depends on your fees, settlement speed and how you take payments. Stripe and Square suit all-round card acceptance, GoCardless suits recurring Direct Debit and SumUp suits lower volumes. Atoa, a UK FCA-authorised Pay by Bank provider, stands out for lower fees, instant settlement and no contracts, and also accepts cards.

Is Pay by Bank cheaper than PayPal?

Pay by Bank typically carries lower fees than PayPal because it moves money directly between bank accounts instead of through card networks. Atoa Pay by Bank starts from 0.6% plus VAT, up to 50% lower than card fees, with no monthly contract or setup cost. PayPal’s percentage fees and funds holds can make it more expensive for regular UK transactions.

How fast do PayPal alternatives settle payments?

Settlement speed varies widely between PayPal alternatives, from instant to several business days. Atoa Pay by Bank settles usually in 3-6 seconds via Faster Payments, while Stripe typically takes around two business days and Square the next business day. If quick access to cash matters, an instant-settling Pay by Bank provider like Atoa is the strongest fit.

What is Pay by Bank?

Pay by Bank is an open banking, account-to-account payment method where customers pay directly from their bank account instead of using a card. They approve the payment in their own banking app with Face ID, fingerprint or passcode, and the money moves straight to the business. Atoa Pay by Bank settles usually in 3-6 seconds, has no chargebacks and starts from 0.6% plus VAT.