Payment Processing for Ecommerce: What You Need to Know
Every UK ecommerce business needs a payment gateway — the technical layer that connects your website to the card schemes and settles money into your bank account. The choice of gateway affects your transaction costs, your checkout conversion rate, which payment methods your customers can use, and how much developer time you spend on integration and maintenance. This guide covers the key decisions for UK ecommerce businesses in 2026.
Ecommerce Payment Gateway Options Compared
| Provider | UK card rate | Monthly fee | Integration | Local payment methods | Best for |
|---|---|---|---|---|---|
| Stripe | 1.5% + 25p | £0 | API / hosted / plugins | 50+ (iDEAL, Klarna, SEPA, etc.) | Most ecommerce businesses |
| PayPal Checkout | 1.2–2.9% + 30p | £0 | Hosted / plugins | PayPal, Venmo (US), BNPL | Brands wanting PayPal recognition |
| Shopify Payments | 0.5–2% (plan-dependent) | Included in Shopify plan | Native (Shopify only) | Shop Pay, BNPL | Shopify stores |
| Worldpay Online | Negotiated (IC+) | From £19 | API / hosted / plugins | Major markets covered | Mid-market and enterprise |
| Checkout.com | Negotiated | Quoted | API-first | 20+ markets | High volume, global ambition |
Stripe and PayPal rates are published standard rates as of May 2026. Worldpay and Checkout.com rates are negotiated — contact providers for quotes.
Choosing a Payment Gateway for Ecommerce
Stripe: The Default Choice for Most Ecommerce Businesses
Stripe is the most widely used payment gateway globally and the default starting point for most UK ecommerce businesses. Its published rate is 1.5% + 25p per transaction for UK-issued cards. EU cards attract a 1.5% cross-border surcharge (post-Brexit). The API is well-documented, plugins exist for WooCommerce, Shopify, Magento, and every major platform, and the dashboard handles disputes, refunds, and reporting without needing developer involvement.
Stripe supports over 50 payment methods including Klarna, Clearpay, SEPA Direct Debit, iDEAL, Bancontact, and Apple Pay / Google Pay — all configurable from the dashboard. Strong Customer Authentication (3DS2) is handled automatically. For businesses with developer resource, Stripe’s ecosystem (Radar fraud tools, Billing for subscriptions, Connect for marketplaces) extends to almost any payment use case.
Volume pricing is available at £500,000+ annual processing. At lower volumes, the published rate applies.
PayPal Checkout: Best for Customer Trust and BNPL
PayPal remains one of the most trusted payment brands among UK consumers, particularly for high-value purchases from unfamiliar sellers. Offering PayPal at checkout can reduce cart abandonment for customers who prefer not to enter card details on a site they have not used before. PayPal also offers Pay Later (buy-now-pay-later) natively, which can increase average order values.
Standard PayPal Checkout rates range from 1.2% to 2.9% + 30p depending on monthly volume — more expensive than Stripe at most volumes. For most ecommerce businesses, PayPal works best as a second payment option alongside Stripe or a primary gateway, rather than as the sole checkout.
Shopify Payments: Best for Shopify Stores
Shopify Payments is the native payment processor for Shopify stores. Transaction fees depend on your Shopify plan: 2% on Basic (£25/month), 1% on Shopify (£65/month), 0.5% on Advanced (£344/month). These are in addition to Shopify’s monthly fee. If you use a third-party gateway instead of Shopify Payments, Shopify charges an additional transaction fee of 0.5–2%. For most Shopify merchants, using Shopify Payments is simpler and avoids those surcharges.
Worldpay Online: Best for Mid-Market and Enterprise
Worldpay is one of the UK’s largest acquirers. For ecommerce businesses processing over £1 million per year, Worldpay’s IC+ pricing — interchange + a fixed mark-up — typically beats Stripe’s flat rate, particularly for businesses with a high proportion of low-interchange UK debit card transactions. Monthly gateway fees apply. Integration requires more setup than Stripe but plugins for WooCommerce and Magento are available.
Checkout.com: Best for High Volume and Global Expansion
Checkout.com is a UK-based enterprise payment platform with direct acquiring in the UK, EU, and key international markets. It competes with Adyen for optimisation of authorisation rates — particularly in markets where standard gateways underperform. For UK ecommerce businesses with significant international sales or processing over £5 million annually, Checkout.com’s pricing and routing intelligence are worth evaluating.
Key Ecommerce Payment Considerations
Strong Customer Authentication (SCA)
UK regulations require Strong Customer Authentication for online card payments — this is typically implemented via 3DS2, which prompts the customer to confirm their identity (usually via their banking app) for transactions above £30. Well-implemented SCA has minimal impact on conversion; poorly implemented flows create friction. All major gateways handle 3DS2 automatically, but the configuration of exemption thresholds (which low-value or low-risk transactions skip the authentication step) varies between providers and affects conversion rates.
Buy-Now Pay-Later Integration
Klarna and Clearpay are available via Stripe and directly. Klarna integration via Stripe enables Klarna Pay Later, Pay in 3, and Pay in 30 within the standard Stripe checkout. For businesses where BNPL is a significant conversion driver (fashion, electronics, home goods), integrating at least one BNPL option is worth the setup time. BNPL providers pay you the full amount upfront; they take on the credit risk and collect from the customer.
Checkout Conversion Optimisation
Payment friction is a material cause of cart abandonment. Key factors: one-page checkout (avoid redirects where possible), Apple Pay and Google Pay enabled (removes card-entry friction for mobile users), saved cards for returning customers, and appropriate 3DS2 exemptions for low-value repeat purchases. Stripe’s Link product (saved payment details across Stripe merchants) and Shop Pay (Shopify’s equivalent) both improve returning customer conversion.
Chargebacks and Fraud
Ecommerce chargebacks are more common than in-person disputes because the customer was not physically present. Card scheme rules allow customers to dispute transactions up to 120 days after purchase. Fraud prevention tools (Stripe Radar, Worldpay’s fraud management) use machine learning to flag suspicious transactions. 3DS2-authenticated transactions shift liability for fraudulent chargebacks to the card issuer, reducing your exposure.
Ecommerce Payment Processing Costs to Watch
Cross-border fees. Post-Brexit, EU-issued cards now attract cross-border surcharges at UK acquirers. Stripe adds 1.5% for non-UK cards. If more than 20% of your customers are from the EU, model this cost carefully — it can be the difference between profitability and a loss on low-margin products.
Currency conversion. If you sell in multiple currencies, check whether your gateway converts at the interbank rate or applies a mark-up. Multi-currency settlement — holding EUR balances separately — reduces FX exposure if you have EU costs.
Refund and chargeback fees. Stripe returns the processing fee on refunds (minus the Stripe fee). PayPal retains the fee on refunds. Chargeback fees vary — typically £10–20 per dispute. High refund or chargeback rates can trigger account reviews at flat-rate providers.
Platform transaction fees. Shopify charges an additional transaction fee if you use a third-party gateway. WooCommerce and Magento do not have platform-level fees, but hosting and plugin costs apply.
Frequently Asked Questions
For most UK ecommerce businesses, Stripe at 1.5% + 25p is the cheapest self-serve option with no monthly fee. For Shopify stores, Shopify Payments avoids the third-party gateway surcharge and is typically cheaper overall. For businesses processing over £1 million per year, Worldpay or Checkout.com with negotiated IC+ pricing can be cheaper than Stripe’s flat rate — model your specific card mix to verify.
Shopify includes Shopify Payments (powered by Stripe) as its native gateway. For most Shopify merchants, using Shopify Payments is the simplest option. If you want to use a third-party gateway (for example, if Shopify Payments is not available in your region or you need features it does not support), Shopify will charge an additional transaction fee of 0.5–2% depending on your plan.
3DS2 adds an authentication step that some customers do not complete — typically dropping out if they do not have their banking app available or do not expect the prompt. Well-configured 3DS2 with appropriate low-risk exemptions (transactions under £30, low-risk returning customers) minimises friction. Most major gateways apply exemptions automatically. Some enterprise gateways offer more sophisticated exemption configuration that can meaningfully improve conversion.
Yes. Klarna can be integrated directly via Klarna’s own API or plugin, or enabled as a payment method through Stripe (which handles Klarna via its payment methods). For WooCommerce and Shopify, Klarna plugins are available. Klarna pays you the full transaction amount upfront and takes on the credit risk — there is no additional financial risk to your business beyond the Klarna processing fee, which is typically higher than a standard card fee.
BusinessExpert is reader-supported. Some links on this page are affiliate links — if you click through and make a purchase, we may earn an affiliate commission at no extra cost to you. This does not affect our editorial independence or the providers we recommend.