Payment Processing for E-commerce UK 2026

This page is for UK online retailers, marketplace sellers, and direct-to-consumer brands who take card payments through a website or app rather than a physical till. E-commerce payments carry a structurally higher fraud and chargeback risk than in-person transactions, because the card is never physically present. That single fact drives almost every important decision you will make about a payment processor: which gateway you choose, how much you pay per transaction, and how well your provider's dispute tools actually work. If you sell internationally, the cost of processing non-UK cards adds another layer that many providers bury in their small print.

Card-Not-Present Risk Is the Defining Cost Driver for E-commerce Payments

Every e-commerce transaction is a card-not-present (CNP) payment. The card schemes Visa and Mastercard classify these as higher risk than chip-and-PIN, which is why interchange rates are higher and why every provider you compare will quote you a larger percentage online than in person. This is not a provider choice. It is baked into the economics of the card networks themselves.

The practical consequence is that your effective processing cost per pound of revenue is higher than a comparable bricks-and-mortar business. Stripe's published UK card rate is 1.5% + 20p per transaction online. Square's online rate is 1.4% + 25p. On a £50 average order value, that 20p or 25p fixed component adds roughly 0.4 to 0.5 percentage points to your effective rate. At low average order values, say £15, the fixed pence fee becomes the dominant cost.

Chargebacks compound this. In e-commerce, a customer can dispute a transaction by claiming non-receipt, item not as described, or outright fraud, without ever returning to your premises. The card schemes impose a chargeback threshold of roughly 1% of transaction volume on merchants. Exceeding it can result in higher processing fees, a rolling reserve requirement where the provider holds back a percentage of your funds or in serious cases, termination of your merchant account. Choosing a provider with strong dispute management tools is not optional for any established e-commerce business.

SCA under the UK's Payment Services Regulations adds a further compliance dimension. Since March 2022, UK e-commerce transactions above £25 in most categories must pass a two-factor authentication step. Any gateway that does not support 3DS2 will generate avoidable declines. This is a minimum requirement, not a differentiator.

Fee Comparison Table

Best Providers for E-commerce

Stripe

Stripe is the default choice for most UK e-commerce businesses that have any technical resource. Its published UK card rate is 1.5% + 20p per transaction, rising to 2.5% + 20p for EEA cards and 3.15% + 20p for international cards, plus a further 2% if currency conversion is needed. These are transparent, published rates, which is genuinely unusual in this market. Stripe's API is the most widely documented in the industry, and it integrates directly with Shopify, WooCommerce, and most major e-commerce platforms without custom development.

For e-commerce specifically, Stripe's fraud tooling Stripe Radar uses machine learning across its global transaction network to flag suspicious orders before they result in chargebacks. This is relevant because CNP fraud is materially more common in online retail than in face-to-face selling. Stripe also handles 3DS2 natively, satisfying the UK SCA requirement without extra configuration. Billing, subscriptions, and multi-currency checkout are all built in.

The honest negative: Stripe can freeze or hold funds with limited notice if its automated systems flag unusual activity on your account. This is a known pattern for new e-commerce stores, seasonal businesses with volume spikes, or stores in product categories Stripe considers elevated risk. If you rely on daily cash flow, have a contingency plan. Read the full Stripe review.

Square

Square's online rate of 1.4% + 25p per transaction is marginally cheaper than Stripe on the percentage element, though the higher fixed pence fee makes it slightly more expensive on lower-value orders. Square's main advantage for e-commerce is its unified inventory and reporting system. If you sell at physical markets, pop-up events, or a studio as well as online, Square links your in-person and online stock in one dashboard. That matters less for pure-play online stores.

Square's e-commerce feature set is functional but more limited than Stripe's for complex stores. It supports Square Online for straightforward product catalogues and connects to WooCommerce, but businesses needing custom checkout flows or advanced subscription logic will find Stripe more capable. Non-UK card processing is significantly more expensive: 2.5% + 25p for non-UK issued cards online. If a meaningful share of your customers are based outside the UK, model this cost before committing. Read the full Square review.

PayPal

PayPal's standard domestic rate of 2.9% + 30p per transaction is the most expensive of the providers listed here. That is a genuine disadvantage, and it is worth calculating what it costs you at your actual monthly volume. At £20,000 monthly card turnover, switching from PayPal to Stripe would save around £280 per month in processing fees alone. Despite this, PayPal retains real conversion value in e-commerce because a large proportion of UK online shoppers already have an account and trust the brand at checkout. Some stores report measurably lower cart abandonment rates when PayPal is offered as an option alongside a card gateway.

The practical solution for most e-commerce businesses is to offer PayPal as a secondary checkout option, not as your primary gateway. This captures PayPal-preferring customers without routing your entire card volume through its higher rate. PayPal does not publish volume-based tiers, so there is no published discount for higher turnover. Read the full PayPal review.

Revolut

Revolut's online rate of 1% + 20p per transaction for UK Visa consumer cards on paid plans is competitive, and it is a straightforward rate to understand. Revolut Business is better suited to businesses already using Revolut for their banking and currency management than to those looking purely for a standalone payment gateway. Its e-commerce integration is less mature than Stripe's, and its developer documentation is thinner. For stores with significant international sales, Revolut's multi-currency accounts can reduce conversion costs that you would otherwise pay the card networks. Read the full Revolut review.

Opayo

Opayo, powered by Elavon, is a payment gateway rather than a bundled payment processor. That means you use Opayo as the gateway and a separate merchant account acquirer for settlement. This structure adds setup complexity, but at higher volumes the blended rate you negotiate with the acquirer can come in below what the all-in-one providers publish. Opayo's published entry point is from 0.99% per transaction for UK personal debit cards, but this is the cheapest interchange category, and most businesses receive a custom quote that reflects their actual card mix. If most of your customers pay by credit card, your effective rate will be higher. The gateway carries a monthly fee on top of transaction costs. Read the full Opayo review.

Pros and Cons by Provider Type

All-in-One Payment Processors (Stripe, Square, PayPal)

• Single contract covers gateway and acquiring. Simpler to set up, no separate merchant account required.
• Published, transparent transaction rates. You know what you pay before you start.
• Fast onboarding often live within a day. Useful for new e-commerce stores or seasonal launches.
• Account stability can be an issue. Automated risk systems can freeze funds without warning, which is particularly disruptive for online businesses with no in-person revenue to fall back on.
• Less room to negotiate on rate. At high volumes, a negotiated merchant account and separate gateway typically wins on cost.

Separate Gateway and Merchant Account (Opayo, Adyen)

• More control over rate negotiation, particularly relevant at annual card turnover above £100,000.
• Adyen uses interchange++ pricing, meaning you see the exact interchange, scheme fee, and processing markup per transaction. This is genuinely transparent and unusual in the UK market.
• Setup is slower and requires approval from both the gateway provider and a separate acquirer.
• Monthly gateway fees apply regardless of transaction volume, which makes this model uneconomic for lower-volume e-commerce stores.
• Better suited to established e-commerce businesses than to stores in their first year of trading.

Embedded Checkout Wallets (PayPal, Revolut Pay)

• Can genuinely reduce cart abandonment by letting customers pay without entering card details manually. This has a real conversion value in e-commerce that does not apply to in-person retail.
• Higher per-transaction rates than dedicated gateways. PayPal's 2.9% + 30p is the clearest example.
• Best used as a supplementary option at checkout, not as your sole payment method.
• Customer disputes and refunds are handled within the wallet provider's own system, which can differ from card scheme chargeback rules.

Which Type of E-commerce Business Has Different Payment Needs?

High-Volume, Low-Basket Stores

If your average order value is below £20 and you process hundreds of orders weekly, the fixed pence component of your transaction fee dominates your effective rate. At £15 average order value, Stripe's 20p fixed fee adds 1.33 percentage points on top of the headline 1.5%, giving an effective rate of around 2.83%. At this basket size, any provider charging a 30p fixed fee (PayPal) is materially more expensive per transaction. Prioritise providers with the lowest fixed pence fee, and model your actual monthly cost at your real order volume before choosing.

International and Cross-Border Sellers

E-commerce stores with a significant share of non-UK customers face a layered cost structure that purely domestic businesses do not. Stripe charges 3.15% + 20p for non-EEA international cards, plus 2% for currency conversion where applicable. If 20% of your revenue comes from non-UK cards on a £50,000 monthly turnover, the international surcharge alone could add over £300 per month compared with processing the same volume on UK cards. Adyen's interchange++ model or a custom merchant account negotiation often yields better economics at this scale than published all-in-one rates.

Subscription and Recurring Billing Businesses

SaaS, box subscriptions, and membership sites have a payments profile that differs from one-off retail: recurring card charges, card decline management, dunning logic for failed payments, and potentially different SCA exemption rules under the UK Payment Services Regulations. Not all payment gateways handle this well. Stripe Billing is purpose-built for subscription logic and handles SCA recurring transaction exemptions correctly. GoCardless is worth considering for subscription businesses where Direct Debit is acceptable to customers, as its rate of 1% + 20p capped at £4 per transaction can be materially cheaper than card processing at higher subscription values.