7 Best Online Payment Systems For Small Businesses On A Budget

As a small business owner in the UK, you know that every penny counts.

But have you considered how much your payment processing system is costing you?

Choosing the right online payment system can be the difference between struggling to stay afloat and thriving in today’s digital marketplace.

In this post, we’ll dive into the best online payment systems for small businesses in the UK, focusing on options that won’t break the bank.

We’ll explore the features, pros, and cons of each system, helping you make an informed decision that could save you thousands in processing fees.

By the end of this article, you’ll have a clear understanding of:

The top 7 budget-friendly payment systems for UK small businesses
Key features to look for in a payment processor
How to choose the right system for your specific business needs

Let’s get started and find the perfect payment solution to fuel your business growth!

How We Picked These Online Payment Systems for Small Businesses in the UK

Before we dive into our top picks, let’s quickly cover how we selected these payment systems:

UK-focused: All systems on this list are available and well-suited for UK businesses.
Budget-friendly: We prioritized options with competitive pricing for small businesses.
Feature-rich: Each system offers a robust set of features to support various business needs.
User reviews: We considered real-world feedback from UK small business owners.
Integration capabilities: The ability to work seamlessly with popular e-commerce platforms was a key factor.

Now, let’s explore the cream of the crop when it comes to online payment systems for UK small businesses.

Comparison of The Best Online Payment Systems for Small Businesses in the UK on a Budget

Payment System	Best For	Transaction Fees (UK Cards)	Monthly Fee
Stripe	Tech-savvy businesses	1.4% + 20p	None
Square	Versatile needs	1.75%	None
PayPal	Easy setup	2.9% + 30p	None
Worldpay	High volume	Custom	Varies
Opayo	Security-focused	Varies	From £25
SumUp	Mobile businesses	1.69%	None
GoCardless	Recurring payments	1% + £0.20 (capped at £4)	None

1. Stripe: The Developer’s Dream

Features and Pricing:

Customizable checkout experience
Supports 135+ currencies
Competitive pricing: 1.4% + 20p for UK cards (Jordan, 2024)

Pros:

Highly flexible and customizable
Excellent documentation for developers
Supports a wide range of payment methods

Cons:

Can be complex for non-technical users
Some reports of account freezes and poor customer service

Best for: Tech-savvy businesses with access to developer resources

Stripe has become a powerhouse in the online payment world, and for good reason.

Its flexibility and robust feature set make it an excellent choice for businesses that want complete control over their payment experience.

With Stripe, you can accept payments from all major card issuers and support a vast array of local payment methods.

This is particularly valuable if you’re planning to expand internationally.

However, Stripe’s power comes with a learning curve.

If you’re not comfortable with code or don’t have access to a developer, you might find the setup process challenging.

Pro Tip: Consider using Stripe if you’re planning to scale your business rapidly or need to support complex payment scenarios.

2. Square

Features and Pricing:

Free POS software
Integrated hardware options
Online payments: 1.75% per transaction for UK cards (Jordan, 2024)

Pros:

Easy to set up and use
No monthly fees
Excellent for businesses with both online and in-person sales

Cons:

Higher fees for manually entered transactions
Limited customization options compared to Stripe

Best for: Small businesses with inconsistent sales who want to start quickly

Square has made a name for itself by offering a user-friendly, all-in-one solution for small businesses.

Its simplicity is its greatest strength, allowing you to start accepting payments quickly without a steep learning curve.

One of Square’s standout features is its free point-of-sale (POS) software, which integrates seamlessly with its hardware options.

This makes it an excellent choice if you need to accept both online and in-person payments.

While Square’s fees are competitive, they can add up if you have a high volume of sales.

Additionally, manually entered transactions come with a higher fee, which could be a drawback for some businesses.

Pro Tip: Square is an excellent choice if you’re just starting out or if you need a versatile system that can handle both e-commerce and physical store sales.

3. PayPal: The Trusted Name in Online Payments

Features and Pricing:

Widely recognized and trusted by consumers
Easy integration with most e-commerce platforms
Standard rate: 2.9% + 30p per transaction (Jordan, 2024)

Pros:

High consumer trust
Quick and easy setup
Extensive integrations with other business tools

Cons:

Higher fees compared to some competitors
Potential for account holds or freezes

Best for: Businesses needing a trusted name and easy setup

PayPal remains a popular choice for small businesses, largely due to its widespread recognition and ease of use.

For many consumers, seeing the PayPal logo at checkout provides an extra layer of trust, which can boost your conversion rates.

Setting up PayPal is a breeze, and it integrates with virtually every e-commerce platform out there.

This makes it an excellent choice if you’re looking for a quick and easy way to start accepting online payments.

However, PayPal’s fees are on the higher side compared to some of its competitors.

At the same time, there have been reports of account holds or freezes, which can be problematic for small businesses with tight cash flow.

Pro Tip: Consider offering PayPal as an additional payment option alongside a primary payment processor to cater to customers who prefer using PayPal.

4. Worldpay

Features and Pricing:

Comprehensive payment solution
Supports a wide range of payment methods
Custom pricing based on business needs (Jordan, 2024)

Pros:

Robust security features
Excellent for handling high transaction volumes
Strong customer support

Cons:

Can be more expensive for low-volume merchants
Contracts can be lengthy and complex

Best for: Established businesses with higher transaction volumes and more complex needs

Worldpay is a heavyweight in the payment processing world, offering a comprehensive solution that can handle everything from simple online transactions to complex, multi-channel payment needs.

One of Worldpay’s strengths is its ability to handle high transaction volumes efficiently.

If your business is growing rapidly or already processes a significant number of payments, Worldpay’s infrastructure can provide the stability and scalability you need.

However, this power comes at a cost.

Worldpay’s pricing structure can be complex, and their services may be overkill (and overpriced) for very small businesses or those just starting out.

If you’re processing over £75,000 in annual card turnover, Worldpay’s custom pricing could offer significant savings (Jordan, 2024).

5. Opayo (formerly Sage Pay)

Features and Pricing:

Strong focus on security
24/7 UK-based customer support
Pricing starts at £25 per month for up to 350 transactions (Jordan, 2024)

Pros:

Excellent security features
Reliable UK-based support
Good integration options

Cons:

Monthly fees can be high for very small businesses
User interface could be more intuitive

Best for: UK-based businesses prioritizing security and local support

Opayo, formerly known as Sage Pay, has built a strong reputation in the UK for its security-focused approach to payment processing.

If protecting your customers’ data is a top priority (as it should be), Opayo is worth considering.

One of Opayo’s standout features is its 24/7 UK-based customer support.

For small business owners, knowing that help is always available can provide significant peace of mind.

However, Opayo’s pricing structure, which includes a monthly fee, may not be the most cost-effective for businesses with very low transaction volumes.

Pro Tip: If you’re handling sensitive customer data or operating in a industry with strict security requirements, Opayo’s robust security features could be a valuable asset.

6. SumUp: The Mobile-First Solution

Features and Pricing:

Low-cost card readers
Simple, pay-as-you-go pricing
Online payments: 1.69% per transaction (Jordan, 2024)

Pros:

No monthly fees
Easy to use for in-person and online payments
Ideal for mobile businesses

Cons:

Limited features compared to more comprehensive solutions
Higher fees for non-UK cards

Best for: Mobile businesses, sole traders, and small retailers

SumUp has made a name for itself by offering a straightforward, mobile-first payment solution.

If you’re a sole trader or run a small retail operation, SumUp’s simplicity and low upfront costs can be very appealing.

One of SumUp’s biggest advantages is its low-cost card readers, which make it easy to accept in-person payments without a significant investment.

The pay-as-you-go pricing model also means you’re not locked into any long-term contracts.

However, SumUp’s feature set is more limited compared to some of the more comprehensive solutions on this list.

If you need advanced reporting or inventory management tools, you might find SumUp lacking.

Pro Tip: SumUp is an excellent choice if you’re just starting out or if your business involves a lot of on-the-go transactions.

7. GoCardless

Features and Pricing:

Specializes in recurring payments and direct debits
Integration with major accounting software
Pricing: 1% + £0.20 per transaction, capped at £4 (Jordan, 2024)

Pros:

Excellent for subscription-based businesses
Lower fees for high-value transactions
Easy integration with accounting software

Cons:

Not suitable for one-off payments
Limited support for international transactions

Best for: Businesses focusing on recurring payments or those with high-value transactions

GoCardless stands out from the crowd by specializing in direct debit payments.

If your business model revolves around recurring payments or subscriptions, GoCardless could be an ideal solution.

One of GoCardless’s strengths is its seamless integration with popular accounting software like Xero and QuickBooks.

This can save you significant time on reconciliation and bookkeeping.

However, GoCardless is not designed for one-off payments, so it’s not suitable as a sole payment solution for most retail businesses.

Pro Tip: If a significant portion of your revenue comes from recurring payments, combining GoCardless with another payment processor for one-off transactions could optimize your payment strategy.

How to Choose the Right Payment System in the UK

Selecting the best online payment system for your small business depends on several factors:

Transaction volume: If you’re processing a high volume of payments, look for systems with lower per-transaction fees, like Worldpay or Stripe.
Business type: Retail businesses might benefit from Square’s versatility, while subscription-based services could thrive with GoCardless.
Technical skills: If you have coding expertise, Stripe’s customization options could be valuable. For less tech-savvy users, PayPal or SumUp might be more appropriate.
Payment types: Consider whether you need support for recurring payments, international transactions, or specific payment methods.
Integration needs: Ensure the payment system integrates well with your existing tools, like your e-commerce platform or accounting software.

Remember, the cheapest option isn’t always the best.

Consider the total cost of ownership, including setup time, potential integration costs, and the value of features that could save you time or increase sales.

Key Takeaways

As we’ve explored the best online payment systems for small businesses in the UK, several key points emerge:

There’s no one-size-fits-all solution. The best system for your business depends on your specific needs and circumstances.
Pricing structures vary significantly. Look beyond the headline rates and consider your typical transaction sizes and volumes.
Ease of use is crucial, especially for small businesses with limited resources.
Security should be a top priority when handling customer payment data.
Integration capabilities can save you significant time and hassle in the long run.

The trend towards mobile and contactless payments is growing, making systems like Square and SumUp increasingly attractive.

And the rise of subscription-based business models is highlighting the importance of recurring payment specialists like GoCardless.

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Conclusion

Choosing the right online payment system is a crucial decision for any small business in the UK.

The best online payment systems for small businesses in the UK offer a balance of competitive pricing, robust features, and ease of use.

Whether you opt for the developer-friendly power of Stripe, the simplicity of Square, or the recurring payment prowess of GoCardless, the key is to align your choice with your business needs and growth plans.

Don’t be afraid to mix and match solutions if it makes sense for your business.

Many successful companies use multiple payment processors to optimize their payment strategy.

Remember, the payment landscape is constantly evolving.

Stay informed about new developments and be prepared to reassess your payment solution as your business grows and changes.

Now, armed with this knowledge, you’re ready to make an informed decision that could significantly impact your bottom line.

Take the time to evaluate your options carefully, and don’t hesitate to reach out to payment providers directly with any questions.

Your perfect payment solution is out there – go find it and watch your business thrive!

FAQs

Q: Do I need a merchant account to use these payment systems?
A: Not necessarily. Many of these systems, like Square and PayPal, act as both a payment gateway and a merchant account. Others, like Worldpay, may require a separate merchant account.

Q: Can I use multiple payment systems for my business?
A: Yes, many businesses use multiple payment systems to cater to different customer preferences or to optimize for different types of transactions.

Q: Are these payment systems secure?
A: All the systems mentioned in this article comply with PCI DSS (Payment Card Industry Data Security Standard). However, some, like Opayo, place an even stronger emphasis on security.

Q: Can I accept international payments with these systems?
A: Most of these systems support international payments, but fees may vary. Stripe and PayPal are particularly well-suited for international transactions.

Q: How long does it take to set up these payment systems?
A: Setup time varies. Systems like PayPal and Square can be set up in minutes, while more complex solutions like Worldpay may take longer.

Q: Can I integrate these payment systems with my existing e-commerce platform?
A: Most of these systems offer integrations with popular e-commerce platforms. Check with your specific platform provider for compatibility details.

Q: What happens if there’s a dispute or chargeback?
A: Each system has its own process for handling disputes and chargebacks. It’s important to familiarize