7 Best Payment Gateways for Small Businesses in 2024 (2024)

If you're looking to take payments from customers, whether online or in person with a card reader, you're going to need a payment gateway to process the transactions as a business.

Our team of independent researchers found that Worldpay is the best payment gateway for small businesses for 2024. This is mostly because it offers flexible plans which make it great for scalability; and its smart security, ensuring customer confidence when making a purchase.

However, Worldpay isn't the only payment gateway option. While there are plenty of providers that claim to be the “most affordable” or “the most feature-rich”, our in-depth research into this category will cover the good and the bad of the top providers, helping you save time and make the right choice for your small business.

Overheads, in the current economic climate, is posing a significant burden on small business owners – which is why it is of utmost importance, now more than ever, for you to choose a service with a fee structure that will suit your business needs.

You can get free payment gateway quotes with 🔍our simple cost comparison tool. This obligation-free tool only takes a few minutes to complete. It can help any business owner quickly understand the types of fees they'll encounter, and save time when comparing payment gateway providers.

*Pricing is correct as of November 2023

What is a payment gateway?

A payment gateway allows merchants to accept online payments from their customers. Therefore, a payment gateway bridges the gap between the customer's card and your business bank account, and plays an essential role in accepting credit or debit card payments online.

Payment gateways protect card details by encrypting sensitive payment information, such as the main card number. This ensure that the information passed between the customer, merchant, and the bank that approves the payment (the acquirer) remains secure.

Choosing a payment gateway provider

When choosing a payment gateway, your best choice is to go for a secure, trusted brand with favourable transaction charges that can help your business profit. The best payment gateways from our research include WorldPay, PayPal and Stripe – though the ideal solution for your business may vary depending on the type of transactions you process.

You'll need a merchant account, credit card processing services, and one of the best card machines or mobile card readers in the business to get paid, so it's time to get educated on the best of the best to avoid being left behind.

Business overheads are high amid our current cost of living crisis, and certain providers have dramatically increased transaction fees since Britain left the EU, so it's vital that business owners save where they can.

We've reviewed the top providers for important cash flow considerations, including transfer time, hidden fees, and security features.

1. Worldpay: best overall

Worldpay is the UK’s most popular payment processing company and it offers some of the most flexible plans for small businesses, including one – Worldpay eCommerce – that comes with no monthly fee.

There are a lot of benefits to choosing Worldpay: its huge market presence means it has a wide range of processing options available, like POS systems, EMV terminals, and digital and mobile wallet payments; as well as FastAccess funding; extensive security features; and gift cards.

However, dealing with Worldpay is like dealing with any large provider. Our testers and some customers reported that its support tools are a little hit and miss. It's also not as intuitive as tech companies that are based entirely online, like Square. Instead, the Worldpay payment gateway needs to be built into your website's backend as an application programming interface (API).

Managing the code – or integrating it with other tools – will be complicated without software expertise. It's because of this that we'd recommend it to small businesses that have designed their website with a third-party tech team.

Overall, we think Worldpay is a solid choice for SME owners who want to partner with a trusted brand.

Worldpay fees and costs explained

Monthly fees: The Worldpay eCommerce plan has no monthly fee, the Business Gateway plan costs £19.95 per month, and the Corporate Gateway plan comes with bespoke pricing.

Transaction fees: 1.3% +20p on Worldpay eCommerce, and 10p on Business Gateway. Transaction fees on the Corporate Gateway plan will be based on your transaction volumes.

Which businesses should use Worldpay?

Worldpay is a great option for established ecommerce brands that want to invest money in a robust payment gateway solution. Worldpay offers simplified order management, which means refunds can be issued instantly and is a great option for clothing brands that have to deal with refunds and returns often. It’s also a great option for ecommerce veterans because it integrates with a range of ecommerce website builders and invoicing software – in other words, by the time you decide to get Worldpay, you should already have a business software infrastructure set up.

Even if you have the budget to spare, keep in mind that Worldpay requires you to have some software development experience as it’s not the simplest of software. You’ll also need to have an ecommerce website builder to integrate with Worldpay.

Worldpay vs. rival payment gateways

Worldpay outperforms most other brands on this list for hardware and software options. It boasts a wide arsenal of payment solutions including card machines and POS systems, unlike Stripe.

If you choose to go with this provider, you'll get a powerful, simplified approach to operations that can reduce admin tasks, such as reconciliations.

Worldpay's eCommerce gateway plan comes with no monthly charge. But at £19.95 per month, its Business Gateway plan is pricier than its competitors, including PayPal and Amazon Pay, which both allow you to get set up and start accepting payments for zero charge.

Plus, its higher-than-average pay-as-you-go transaction fees of 2.75% + 20p mean it's designed for businesses that want to make an investment on their new payment gateway solution.

It is worth highlighting that no payment gateway will cater to every requirement of a company. This is why you should thoroughly explore its pricing plans with our simple 🔍cost comparison tool, so you'll know exactly what you'll get for your money.

Would you like to know more about Worldpay?

Read our dedicated Worldpay review.

2. PayPal: best for speed & convenience

While PayPal may be known by many as an easy way to checkout online, it's also just as user-friendly for businesses.

Its payment gateway, Payflow Gateway, is widely trusted and has more than 220 million users worldwide. With variable transaction fees, this payment gateway is nice and budget-friendly for small business merchants.

There are some drawbacks to the system that exclude certain businesses from its software. If you're selling abroad, you'll be charged an additional 1.5% per transaction for international payments – and those costs could add up quickly.

During our research, product testers found that PayPal does not refund the transaction fee when customers return their purchases. Square, on the other hand, does not have a chargeback fee and will refund your transaction fee when a customer makes a return.

Still, we like PayPal as a good option for domestic firms that need to accept instant payments.

Did you know? The online payments and transactions industry is going to reach over $3,268.26 billion by 2030, according to Precedence Research.

PayPal fees and costs explained

Monthly fees: No monthly fees

Transaction fees: PayPal's transaction fees can differ depending on a payment's country of origin, but domestic transaction fees are currently 2.9% + 30p.

Which businesses should use PayPal?

PayPal’s online payment system is flexible and intuitive enough to work wonders for small businesses and startups – even first-timers.

We think it's best for time-conscious businesses that need to take payments quickly, such as food takeaways or taxi firms.

PayPal announced its Instant Transfer feature in 2019 as an expansion of its payout features. Our testers were able to transfer money between the designated PayPal wallet and their bank account – anddebit card – within 30 minutes.

Don’t worry, your customers won’t need a PayPal account to use PayPal Payments Pro – this software can be integrated with Payflow Gateway to create a customisable, online payment solution.

PayPal vs rival payment gateways

PayPal's name is one of the most trusted on this list. Many of your customers are likely to already have a PayPal account, and will instantly recognise this payment option when at the checkout, unlike low-profile options, like Opayo or Cardstream.

It also transfers payments into your account instantly, which is a big bonus if you need to deliver a time-sensitive product. Therefore, this is best for businesses that promise next-day delivery.

However, PayPal underwhelms when it comes to international payments. Stripe's EU transaction rate of 1.5% looks quite generous when compared with PayPal's 2.9% plus 30p. Moreover, PayPal doesn't have the most robust UX flow, as clients claim customers are not always redirected back to their site, leaving orders in a limbo.

Want to learn about some of PayPal’s other offerings?

For more on the company’s card reader, check out our dedicated PayPal Here review.

3. Stripe: best for worldwide sales management

Stripe is a full-service payment provider, offering users a payment gateway and a merchant account.

While it is used by big brands like Deliveroo, Booking.com, and ASOS, Stripe is designed for businesses of all sizes. It gives you the option of a hosted payments page (designed using code), or the website integration, Stripe Payments (added to ecommerce websites with the click of a button).

After thorough testing, we found that the latter system will probably be preferred by SMEs. This is because it gives you access to your sales in a Stripe Dashboard via the web or a mobile app, which allows you to manage payments, refunds, and disputes.

Stripe's biggest benefit is undoubtedly its global payment features. If you're shipping products internationally, Stripe is your best option.

Stripe fees and costs explained

Monthly fees: Stripe does not charge a monthly fee or any setup costs.

Transaction fees: For payments with UK cards, Stripe charges 1.5% + 20p.

Which businesses should use Stripe?

Stripe is a great online payment gateway for small to medium businesses that operate in a range of industries, from retail ecommerce to B2B services to subscription base products. Stripe also supports processing payments in 135+ currencies, allowing you to charge customers in their native currency while receiving funds in yours.

In addition to being a comprehensive pay-as-you-go solution, it also offers favourable rates for European cards. The transaction rate on European cards is low (1.5% + 20p) when compared with many other payment gateways, such as PayPal Checkout (1.29% + 0.35c).

Transaction fees are lower for European cards than non-European (2.9% + 20p), so it will cost you more to sell to other continents. It should be noted that the latter costs are actually similar to Worldpay's normal UK-based transaction fees anyway (2.75% + 0.2p).

Stripe vs. rival payment gateways

Stripe is a competitive provider for lots of elements, including international payments and slick checkout design. Plus, with no monthly fees, it outstrips Opayo and Worldpay in terms of flexibility.

However, Stripe only offers an onsite payment option, so you'll have to search for separate tools, like ecommerce builders and card machine providers. In comparison, Shopify offers products for every aspect of the payment lifecycle.

If you need fast payouts, Stripe is not a great option because it can take up to a week for money to be deposited into your business bank account. PayPal is quicker in comparison (3-5 business days).

Want to learn more about Stripe?

Read our dedicated Stripe review for all its hidden costs, pros, and cons.

4. Amazon Pay: best for innovation

Amazon Pay is a great option if you want faster checkouts as it can recycle the details you and your customers have already provided for Amazon accounts.

You can sign up to Amazon Pay online through the Amazon website. As long as you have a business account with the platform, you'll be able to add it to your websiteorlist products on the Amazon marketplace.

Unlike other payment processing solutions, Amazon also has the benefit of completing your payment processing online. This means that once you integrate Amazon Pay with your website, your customers won’t have to leave the site to complete a transaction with you.

However, if you go with Amazon, your customers will not be able to pay with PayPal. This can be avoided if your customer has a PayPal cash card.

Amazon fees and costs explained

Monthly fees: Amazon Pay comes with no hidden costs, lock-in, or monthly fees.

Transaction fees: 2.7% + 30p for each transaction you make.

Which businesses should use Amazon Pay?

We've tested this payment gateway thoroughly and would recommend Amazon Pay to new businesses that aren't yet established and need to build trust among new customers.

Amazon's reputable brand name should give you a boost in credibility for potential new customers. Plus, the Amazon Pay website has a list of downloadable marketing assets – including logos and banners – that you can easily add to your sales channels to use as trust signals.

One potential issue with Amazon Pay's payment processing is that customers get access to Amazon’s popular A-to-Z guarantee.

This is obviously great for customers but it also means that, if you're a dropshipping firm relying on a third-party seller, the onus will fall onto you to refund the item, which could be costly.

Did you know:The market size of the Payment Systems industry in the UK has grown by 4.6% per year, on average, between 2017 and 2022, according to IBISWorld.

Amazon Pay vs. rival payment gateways

PayPal is Amazon Pay's closest rival and they are running a close race. Amazon and the standard version of PayPal have no startup costs, nor do they have monthly fees or a termination fee. A bonus for both providers is that you'll be associated with a big brand and you'll have access to 24/7 customer support.

However, PayPal has lower transaction fees, but only by a small margin (Amazon's are 0.2% higher). Customers will need an account to use Amazon Pay, whereas PayPal lets anyone with a debit or credit card use its service. Similarly, if you're selling internationally, PayPal is more expensive, but it also has more options (2.9% transaction fee). While Amazon is accepted in just 16 countries and takes 12 currencies, PayPal is available in more than 200, and supports 25 currencies. This will be an important factor to consider for businesses that have an international clientele.

5. Shopify Payments: best suite of ecommerce tools

As well as providing a payment gateway, Shopify is a popular and comprehensive ecommerce system in the UK because it offers everything you need to start selling online.

For obvious reasons, Shopify Payments is the best choice for Shopify users because it keeps your payment gateway under the same roof as your website tools. When testing, we found that there are zero transaction fees, which significantly boosts the profits of SMEs, particularly if you're selling big-ticket items that are over £100.

If you do choose to move away from Shopify Payments by integrating a third-party payment gateway provider to your Shopify website, then you'll pay transaction fees that range from 0.5% – 2%.

If you already have a Shopify account, it is quick to add the Shopify Payments tool into the backend. Just navigate to “Settings”, “Payments”, click “Activate Shopify Payments”, and fill in the relevant information.

Shopify fees and costs explained

Monthly fees: A monthly Shopify plan is £22 per month for an ecommerce website – which comes with web hosting, a shopping cart, a blog, and an SSL certificate.

Transaction fees: The Basic Shopify plan charges 2.9% + 30p per transaction.

Which businesses should use Shopify Payments?

Brick-and-mortar businesses with an online presence will find Shopify Payments to be a great option. Merchants that sell using Shopify should use its built-in Shopify Payments app to accept sales. You'll pay nothing in transaction fees andyou'll be able to integrate with Shopify's vast range of hardware, like the popular Shopify card reader, and software options, likeShopify POS.

Shopify POS will allow you to process in-person transactions on a mobile device or a tablet. It can also sync inventory information between online and brick-and-mortar stores, which is great if you're selling online and offline. This gives you a bird's eye view of your operation, helping you juggle your physical and digital storefronts in one place.

Thanks to a combination of attractive templates, search engine optimisation tools, and its in-house payment gateway, Shopify offers an easy and cost-effective way for small businesses to expand their sales channels.

Shopify Payments vs. rival payment gateways

Shopify, alongside Opayo, is the only brand on this list that does not have associated transaction fees. However, Shopify's monthly plan costs £10 less than Opayo, so it takes the crown in terms of value for money.

Shopify is also easier to get set up with than many other brands. Any level of tech know-how will allow you to get started because all users have to do is click a few buttons. In comparison, Worldpay requires users to install its software as an API.

The one area that Shopify, understandably, falls down is flexibility. You have to use Shopify to host your store if you want to use it as a payment gateway. PayPal offers great flexibility and lets you rely on an ecommerce builder of your choice.

Want to learn more about Shopify?

Shopify offers afree two-week trial, allowing you to test the product before you buy. Read our fullShopify review to find out more. You won't need to give your credit card details to try it out.

6. Opayo (formerly Sage Pay): best for customisation tools

Opayo is a comprehensive merchant account and payment gateway service. It's recognised for offering exceptional levels of security while providing fair rates for processing transactions to small businesses and large corporations.

We tested this gateway and found the Opayo payment gateway to be fully customisable. You can create a checkout system that suits the feel of your website, and you can even choose Opayo for your offline store payments like Shopify, allowing you to keep all of your payment data in one place.

It has a flat-rate monthly fee of £32, and you won't pay any transaction fees for your first 350 sales each month – great news for businesses that sell high-end items.

Opayo fees and costs explained

Monthly fees: Opayo's cheapest payment plan is Opayo Flex. This tier is currently priced at £32 per month for 350 transactions.

Transaction fees: An additional 12p per transaction is incurred if you process more than 350 transactions.

Which businesses should use Opayo?

Although Opayo, formerly Sage Pay, has grown over the years, it still remains a favourable choice for small businesses. The payment gateway provider hasn't forgotten its roots, with its small business packages ideal for those getting their online business off the ground.

Opayo's Flex package costs £32 per month, which makes it a great fit for side-hustles that don't take more than 350 transactions per month.

The downside to Opayo is that you'll be tied into a 12-month contract. If you're looking for more flexible options, Shopify or PayPal are good alternatives.

Opayo vs. Rival Payment Gateways

Opayo's zero transaction fees for the first 350 sales is a huge bonus for SMEs. As an easy method for preserving profits, it outpaces Worldpay (2.75% + 20p) and PayPal (2.9% + 30p), helping you retain more of your sales revenue.

However, entrepreneurs also get no transaction fees with Shopify Payments, which costs £10 less per month. We'd only recommend Opayo if you're already hosting your website with a different provider. Otherwise, Shopify is the better option.

7. Cardstream: best for brand awareness

Cardstream doesn't tie you into a lengthy contract and offers excellent customer service, unlike the bigger payment gateway providers, like Worldpay.

As it's not attached to an acquiring bank, and its solution is white-label, we found there is certainly more to do when getting it set up. While there are benefits to white-labelling, those looking for convenience may wish to choose a different, comprehensive solution. For instance, Shopify has a holistic solution with flexible plans and a full ecommerce integration.

However, once you're up and running, Cardstream will take responsibility for anything that goes wrong with the service and will work on a patch or upgrade. It will also provide support and accept input to better its operation.

In addition to being a white-label supplier, Cardstream isn't attached to an acquiring bank so you're free to choose a small business merchant account provider that offers the best rates for your business.

Cardstream fees and costs explained

Monthly fees: Cardstream's pricing is not fully transparent and it does not display its plans on its websites. Our research found that on average, however, Cardstream charges £18 per month for 350 transactions.

Transaction fees: After 350 transactions, Cardstream charges 9p per transaction.

Which businesses should use Cardstream?

As the only white-label payment gateway provider, businesses can use Cardstream to create branded payment pages and receipts, ensuring familiarity throughout the entire user-journey.

Because of this, we recommend it for businessses that are looking to brand-build. Having your logo at the top of a payment page will not only promote trust and improve client satisfaction, it will also increase your brand's exposure.

Cardstream vs. Rival Providers

Perhaps Cardstream's most obvious weakness, when compared with the other providers on this list, is that there is no flat-rate cost for its services.

Unlike its rivals, Shopify and Stripe, customers need to contact Cardstream's support team for a quote. This is an unfortunate trait of the payment gateway market.

How does a payment gateway work?

1. The customer places an order on your website or in store.
2. The web browser encrypts the information (ie: card and account details) via a Secure Socket Layer (SSL) encryption.
3. The customer’s encrypted card details are forwarded to the payment gateway via the merchant account.
4. The payment gateway then passes on the transaction details to the payment processor used by the acquirer.
5. This payment processor then forwards the transaction information to the card association (e.g. Visa, Mastercard).
6. The customer’s bank receives the authorisation request and sends a response code back to the payment processor, detailing whether the payment has been approved or declined.
7. The merchant account then submits all approved authorisations to the acquirer, to be signed off and transferred into the merchant’s business bank account by the acquiring bank. This a process takes approximately two days.

What types of businesses are payment gateways suitable for?

Payment gateways are suitable for ecommerce businesses that want a safe way to take credit card payments from customers.

However, keep in mind it's not necessarily the best option for those with a really tight budget as payment gateway providers aren't always transparent about their per-transaction percentage. In other words, you might have to pay for monthly account fees, membership fees, PCI-compliance fees, initial setup fees, and more. Prices are also higher if you accept cards like American Express.

How do I choose the right payment gateway for my business?

The best payment gateway will make it cheap, easy, and safe for your customers to pay you, from wherever they find your products. It will be secure, allow you to control the data of your customers, and offer a seamless customer journey that accepts all major payment cards.

Plus, it should sit well within your budget.

We’ve created a handy list of what to look out for when it comes to choosing the perfect payment gateway for your startup:

1. Security: this is important for both you and your customers. Keep your eye out for PCI compliance, which is crucial when accepting credit card payments.
2. Data portability: who owns your customer’s data if you choose to leave your gateway? Make sure you know how to download and move the data you need to sustain your merchant services without breaking GDPR.
3. Hosted/integrated gateways: a hosted gateway will redirect your customers to the payment processor’s platform (they’re easy to set up and ideal for new businesses). An integrated gateway connects to your ecommerce website via the gateway’s provided API (meaning that your customers will never leave your site to input payment information).
4. Customer journey: customers will be looking for convenience, clarity, and security. You should avoid too many steps and don't request too many details from the customer. This will take too much time and increase the chances of the customer abandoning the purchase.
5. Cards accepted: it’s standard for payment gateways to accept all major credit and debit cards, but double-check (and if the gateway accepts American Express, that’s a bonus – be sure to check the credit card processing fees though!)
6. Mobile optimisation: phones are the future of ecommerce, and if your payment gateway isn’t geared up for smartphones, then you’re probably missing out on some serious sales opportunities.
7. Fees: each payment gateway charges a different amount for credit, debit, and overseas transactions – so be sure to read up on what the charges are, and make sure you’re not going over budget.
8. Customer support:If your gateway goes down, you won’t be able to accept payment for your products, which is bad news for business. It’s important that your payment gateway provider has an efficient customer support network that can help out with any problems, at any time.

What are the most affordable payment gateways?

If you're operating your business on a tight budget and want to keep costs to a minimum, the three cheapest providers that offer exceptional value for money are:

• Paypal
• Amazon Pay
• Stripe

These providers proudly sit on the cheapest payment gateway podium because, unlike their competitors, you pay zero monthly fees. All you are charged is a transaction cost, which is less than 3% for each provider.

How we test card processing products and merchant services for small businesses

We tested 11 merchant account products and services to evaluate them in terms of functionality, usability, price, compliance, and more so we can make the most useful recommendations to small UK-based businesses.

Our rigorous testing process means these products have been scored and rated in six main categories of investigation and 25 subcategories – in fact, we covered 36 areas of investigation in total. We then gave each category score a ‘relevance weighting' to ensure the product's final score perfectly reflects the needs of our Startups.co.uk readers.

Our main testing categories for merchant account products and services are:

Compliance: the adherence of the merchant account product to relevant regulations and standards, such as data security, anti-fraud measures, and legal requirements.

Customer Support: the assistance and resources provided by the merchant account provider to users in resolving issues, answering questions, and providing guidance.

Customer Score: external customer opinion; the feedback and ratings given by customers who have used a particular merchant account. Also, the market position and reputation a merchant account holds.

Features: the functionalities and capabilities provided by the merchant account product, including online payment processing and payment gateway integration.

Taking Payments: the process and options available for accepting payments through the merchant account product.

Price: the cost associated with using the merchant account product, such as transaction fees, setup fees, monthly fees, and any additional charges.

The Startups product testing process

Next step: compare payment gateways

Now that you know all about the best payment gateways, you're ready to nail down the right merchant account service for you. What's next?

Answer a few quick and easy questions using our free online payment gateway 🔍cost comparison tool to receive custom quotes from the top providers, many of whom are featured in this article.

You can get quotes based on your industry and sales requirements, allowing you to find the best deals, features, and support tools needed for your business.