Running a small business in the UK is rewarding, but managing payments can be tricky. There are countless small business payment processing providers out there, and figuring them all out takes time. We’ve already explored ways to accept cheap online payments, but this article simplifies payment processing, so you can focus on what you do best – serving your customers. We cover everything from card payments to future payment trends, so you can make informed decisions.
According to the UK Finance 2023 payments report, contactless payments soared in 2022, contributing to 37% of all transactions with 87% of individuals using contactless payments at least once a month. Additionally, the rise of Buy Now Pay Later services marked a shift in consumer behaviour, with cash transactions dwindling to an all-time low of 14%. Digital wallets are playing their part, too.
With these stats in mind, it’s safe to say we’re looking at a market in flux with customers carving out their own unique payment choices and needs. Whatever your business does, fine-tuning your checkout process with diverse payment methods is crucial. To help you along the way, we’ve outlined some of the UK’s leading and most varied payment processors for 2024. It’s just the ticket for UK small business owners seeking a new provider or switching to a better solution.
Types of payment processing solutions
Card payments: Whether you run a brick-and-mortar shop or an online store, card payments make your business tick. A high percentage of customers still pay using cards, so you need a reliable way to accept them. Card readers connect to networks like Visa and Mastercard to process in-person transactions.
Mobile payments: The rise of smartphones has made mobile payments increasingly popular, as customers only need to tap their phone or smartwatch to pay, offering a fast and convenient experience. Most modern cards can make contactless payments under £100, whilst digital wallets such as Apple Pay store card information for customers to tap and pay quickly.
Payment gateways: Lots of e-commerce businesses use payment gateways as a bridge between their website and the payment processor to handle sensitive customer data and accept secure transactions. Popular options include Stripe and PayPal but some providers service small businesses, offering lower fees and more focused features.
Buy Now Pay Later: BNPL options are popular with younger consumers as the cost of purchases can be spread over time, often with no interest. Offering BNPL can boost sales, but providers typically charge fees, so factor this into your payment strategy.
Direct debit or bank transfers: Customers authorise you to collect payments directly from their bank accounts, making it easy to manage regular payments. Benefits include less admin and improved cash flow but there is potential for failed and missed transactions if they aren’t managed carefully.
Choosing the right payment processing solution for your small business is about balancing features and cost. Consider your business needs, browse different providers, and ask questions to find the right service. Keep reading, because, in the next section, we’re looking at your options…
Why small business payment processing is important
Before we meet the line-up, let’s get acquainted with what processing should bring to your operation. This easy-follow checklist should help you identify what makes a payment provider stand out.
First up, check the fees and small print. Unreasonably high processing fees, gotcha contracts, service charges and astronomical hardware costs won’t boost your cash flow.
Hardware can be an issue. Some providers may demand a long tech shopping list with card terminals and expensive gadgets. Be mindful of this: taking payments doesn’t have to be complex. This can be costly and slow your operations down.
Make sure it is omnichannel. Does the provider service each channel that you need? Providing the options required is essential for good customer experience and return visits. Consider in-store and e-commerce methods, plus remote payments like invoicing, payment links, etc.
Integration potential. If you already have a POS, consider how your payment processor works alongside it. Is it easy to integrate, or will you need tech support?
How does it run? Is the system easy to use? Does it rely on a solid internet connection? Consider whether your staff can take payments easily without much training or delays.
Scaling your business up? Can this provider grow with your business if you add more locations? It’s no use investing the time and effort of installing a new payment solution to change it not long after.
Check those reviews. Check testimonials and user reviews to ensure the provider offers support and customer service. Ask real-life merchants in your industry for their thoughts and suggestions, too. The last thing you want is a payment meltdown on a busy day with nobody to help.
With those pitfalls in mind, let’s consider some key players out there!
The best value payment processors in the UK right now
Are you ready to tap into secure payment processing that can save you money on fees? If so, we have the lowdown on the best options for your business…
Amazon Pay
What’s on offer? Secure payments using your Amazon account.
Price check: 2.7% fee for monthly payment volumes under £50,000.
Plus points: High security, easy shopping, and compatibility with Shopify and BigCommerce.
WorldPay
What’s on offer? Tailored packages for small businesses.
The scoop: WorldPay’s got your back from countertops to mobile card machines.
Price check: Three packages to choose from, starting at £19/month.
Insider tips: Auto-renewal alert! Watch out for that, and also be wary of sales pitches that are too good to be true.
Atoa Payments
What’s on the table? Instant in-store, phone QR, or invoice payments using QR codes and payment links.
Price check: Maximum flat rate of 0.6% per transaction with capped fees. Negotiable pricing is available on higher volumes.
Good to know: No contracts, service charges, hardware costs or hidden fees. Comes with POS, DMS and e-commerce integrations, developer support and training.
Adyen
Unique feature: Online and in-person payments with AI-powered fraud protection.
Price check: A processing fee of €0.11 plus a percentage based on payment method.
Remember: Best suited for larger SMEs; not ideal for startups.
Square
What do you get? In-store, phone, invoice, or online payments.
Price check: Ranges from 1.4% to 2.5% depending on the transaction type.
Extra features: Free magnetic stripe reader, quick launch, and next-business-day payouts.
Stripe
The lowdown: Tailored for online payments, customisable billing plans.
Price check: Transaction fees range from 1.2% to 3.25%.
Perks: Integration with mobile apps and over 135 currencies.
GoCardless
Key feature: Ideal for one-off or recurring payments.
Price check: Starting at 1% + £0.20 per transaction.
Highlights: Integrations with Xero, QuickBooks, Sage, and Salesforce.
Shopify Payments
What’s in store? A direct card acceptance solution with online and in-person options.
Price check: Monthly costs from £25 to £344, depending on the plan.
Bonus: No extra transaction fees when you use Shopify Payments.
Opayo (formerly Sage Pay)
Star offering: Solutions for online payments, card terminals, phones, and point of sale.
Price check: Varied plans, starting from £25 per month.
Consideration: No hidden fees and good customer service, but it is a bit pricier than Sage Pay was.
Zettle by PayPal
The deal: A one-stop shop with point of sale, card reader, and more.
Price check: Starting at £149/month for the payment terminal.
Perks: No contract, integration with Xero and Shopify, and quick bank deposits.
*Please note figures were correct when writing and may be subject to change. Do your research and read the small print before you sign up for anything.
Future payment trends for small businesses
Open banking payments are making steep card fees and lengthy processing times a thing of the past. Here’s how:
- Instant payments: Customers authorise payments directly from their bank accounts – no more waiting days for funds to clear.
- Better security: Cutting-edge encryption and authentication protect your business and your customers from fraud. We’re talking SCA and biometrics!
- Lower costs: Open banking can significantly lower your payment processing expenses, like card fees and transaction charges.
- Flawless customer experiences: One-click or tap payments make it easy for customers to complete purchases, boosting your sales and conversions.
Security measures are being upgraded with biometric payments that use fingerprint and face scans to confirm payments. Not only do they offer convenience and speed, but biometric data adds an unbreakable level of security, which makes it difficult for fraudsters to replicate. Open banking payments use face and fingerprint scans to protect business owners from nasty chargeback costs.
While digital currencies like Bitcoin are gaining traction, widespread adoption for everyday payments is quite a way off. Cryptocurrency might be suitable for some businesses, especially those in tech or finance, but their volatile nature makes them a risky payment option.
Open banking payments are undoubtedly the most exciting development for small businesses in the UK. Use this technology to improve your daily operations, save your money, and give customers easy payment experiences.
The takeaway
In the world of payment processing, choosing the right partner to work with must take the front row. Whether you’re eyeing cost-effectiveness, integration options, or watertight security, these top payment processors for 2024 have got you covered. So, buckle up to boost your payments and watch your business reap all the benefits. Here’s to fast, fair, and secure transactions that give your business a brighter financial future.
Here’s how Atoa can help you.
Unbeatably low instant payments at a flat rate of 0.6% per transaction, plus capped fees. Flexible QR code payments and links on the Atoa app or desktop dashboard. Free from contracts, service charges, hidden fees and hardware costs.
Why not give us a try? We offer 14 days of free transactions when you sign up for an Atoa account, so why not start saving today?
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