Top 6 Online Payment Methods for Small Businesses in 2023

With the recent energy price hike taking its on physical businesses, entrepreneurs will be looking more into the online space for income. If you're considering this, you'll need an online payment gateway to access that income, and for our money, takepayments is the one best-equipped to help you out.

takepayments has comprehensive features, a low online transaction fee and, affordable hardware – all of which made it shine in our research into the best payment gateways.

In this article, we cover takepayments’ prowess as well as other five online payment gateway providers that also stood out in our analysis. Depending on your needs, they might serve you better, so if you'd like to know more about our findings, just head to our ranking below.

Or, use our comparison tool which will generate bespoke quotes for online payment services that are tailored to your specific needs.

The top six methods for taking online payments

Let's start with an at-a-glance view of our top six merchant services for taking online payments, with information on how we've rated them and what their transaction fees are.

1. takepayments

Best for features

Although takepayments has better features all-around, Square offers hundreds more intgerations than takepayments. Square might be a better option for you if you want a pay-as-you-go payment provider that also enables you to sell in-person as well as online (it can do these through its free ecommerce platform and free EPOS system).

takepayments' payment gateway integrates with over 50 shopping carts, so you can take payments through your website. There are no setup fees and each online transaction is charged a flat fee of 10p. This is a fairly inexpensive option when it is compared with providers that charge a percentage per transaction. Plus, the first 400 transactions are free. This benefits you if your businesses deals with a high volume sales, like a bar or a coffee shop, because the bite into your transactions isn't big.

takepayments scores a 4.6/5 for its customer support because it offers phone and live chat support, but it does lack an email option. Square scores a 5/5 as it includes an email support option, if this is important to you then Square could be a be a better fit.

Pricing

takepayments charges 10p per online transaction and between 0.30% and 2.29% per card transaction.

How does takepayments compare with other online payment methods?

takepayments' fee of 10p per online transaction is affordable, but it does mean that you will be tied into 12-month contract. Its hardware is affordable at £25/m + VAT, but its not cheaper than a provider like Square, which charges a one-off £16 for a card reader.

2. Worldpay

Best for faster payouts

A Worldpay payment page can be hosted on its site or integrated within your own website, which offers a lot of versatility.

Worldpay's large range of integrations also make it a good choice for businesses that want to seamlessly bring together various systems and software together – therefore saving money instead of signing up with several providers.

It's monthly fee and 18-month contract isn't a good fit for businesses that want flexibility or are seasonal, like a small ice cream shop that only operates in the summer. Stripe Payments would be a better option in this case as it offers pay as you go with a card transaction fee of 1.4% +20p. However, Worldpay's transaction fees start much lower at 0.75% so if you're prepared to lock into a contract, you'll more likely end up with a better deal.

Worldpay does offer a pay-as-you-go option, but its 2.75% +20p transaction fee is fairly steep and we don't feel it offers good value for money, as you can get that flexibility with lower transaction fees with other providers (such as the mentioned Stripe Payments).

Worldpay's 30-minute transfer time is the fastest out of all the providers in our research, which is helpful your business depend on quick cash flow.

You will need to pay £4.99 per month for reporting, which can add up when you consider the minimum monthly fee and potentially a monthly hardware fee. If you want more affordable reporting, you might better suited to Stripe as there no additional charge, although its transactions fees are much higher.

Pricing

On a pay as you go plan you’ll pay 2.75% + 20p transaction fee. On a monthly plan, you can expect to pay a £19.95 fixed online payment gateway fee plus 2.75% + 20p per transaction. If you're taking more than 1,000 card payments per month, you can contact Worldpay to negotiate a better rate.

Worldpay also charges a fee for PCI compliance, which amounts to £29.95 per year.

How does Worldpay compare with other online payment methods?

Worldpay is well suited to businesses that want fast payouts and don't mind a monthly fee. Its contract is 18 months long, the longest among all of the providers we looked at.

For more flexibility, Square or Stripe could be a better option, however, transaction fees are much higher with pay as you go providers. If you're confident you'll have steady and regular transactions, then Worldpay is a good choice. But. if you're just starting out and you're not sure about your numbers yet, it might be better to go with a pay as you go provider.

3. Square

Best for integrations

If you want to start taking online payments but don’t have an online store, Square can help you build one with its free ecommerce platform.

Square offers API integration, allowing you to take payments from your own website. It aims to cut out the hassle of keeping tabs on your online transactions, letting you track all your sales from one place.

The price is on the expensive side, but there’s no cost to sign up or any hidden fees, and PCI compliance is handled for you.

Square's card reader is super affordable at £16, however, as with all pay as you go readers, the transaction fee is much higher than a provider like Worldpay, which has a monthly fee.

However, Square's free ecommerce website, free EPOS app, and high number of integrations make it a good fit for businesses that want a comprehensive system without monthly costs.

Pricing

Card transactions are charged a 1.75% fee.

Square charges a 2.5% transaction fee for all card-not-present transactions, which includes ecommerce payments, invoices, and those keyed-in or made through a virtual terminal.

How does Square compare with other online payment methods?

Square scores well for features with a 4.7/5, it has hundreds of integrations and built-in reporting capabilities. However, it doesn't have multi-currency support, which is pretty limiting for online transactions.

If you want to accept multiple currencies, you could opt for Stripe (135+) if you want a pay as you go provider, or takepayments (170+) if you don't mind a monthly fee and contract.

Square's transaction fees are fairly steep at 1.75% for card transactions, which is why it scores a 3.3/5 for price. Revolut scores a much higher 4.6/5 for its price as its in-person transaction fee is 0.8% +20p. Despite its cheaper fees, Revolut lacks fraud protection measures which Square offers. These measures are important for ensuring safe transactions for both you and your customers.

4. Stripe Payments

Best for reporting

Stripe Payments also offers a payment form you can embed into your website. This means your customers can easily pay there and then, without the annoyance of getting redirected somewhere else. You can also customise the logo, images, and colour to make the image seamlessly align with your website. This is very useful for online businesses keen on providing a good customer experience, but matters less if the bulk of your activities takes place in a brick-and-mortar shop.

At 1.4% +20p per transaction, this isn't the cheapest rate available, especially when compared with takepayments' 10p per transaction. takepayments does require a 12-month contract, compared to Stripe's more flexible pay as you go option.

However, Stripe is a good choice if you want the option of having a mobile reader as well. If you're a seasonal trader, or want the option to take payments occasionally, Stripe's reader is a one-off fee of £49 or £179 and then the transaction fee for each payment taken.

Square does offer cheaper hardware, scoring a 3.3/5 for price, compared to Stripe's 3.2/5. Although both have similar scores due to their steeper transaction fees, Square's reader is a much cheaper one-off £16.

Stripe Payments' reporting options and mobile reader make it a good choice for businesses that want extensive reporting capabilities and the option of having a mobile reader that they don't need to pay monthly for.

Pricing

Stripe Payments charges 1.4% of the transaction, plus a 20p transaction fee. This means it occupies somewhat of a middle ground: its transaction fees are higher than takepayments' but lower than Square's. For that reason, some business may find pricey, but considering that Stripe Payments doesn't charge monthly account fees, it's still a good choice for businesses testing out the waters or that only operate at certain periods of the year.

How does Stripe Payments compare with other online payment methods?

Stripe's transaction fees are a little higher as this is a pay as you go provider. The benefit of this is that you aren't locked into a contract, which can be expensive to get out of, such as with Worldpay or takepayments. However, it does mean that you'll end up paying a little more money per transaction.

5. PayPal

Best for global reach

PayPal's a payment powerhouse ideal for businesses keen on taking payments internationally. Available in more than 200 territories and supporting 25 currencies, this should be your online payment method choice if your business sells to many countries (like an online vinyl shop) or plans to do so.

PayPal's customer support has received a fair amount of praise online and our research deems it the best one for business that need hands-on help – especially newcomers that lack the experience with online payments.

However, PayPal's payout time of up to 5 working days is a bit on the long side, which means business that don't have great cash reserves may be better off with another provider that offers faster transfers (like Worldpay). This allows them to access their funds more timely in order to pay bills and reinvest.

Pricing

If your business is based in the UK, PayPal charges 2.9% of the transaction, plus a fixed fee of 30p. You'll also pay an additional fee relating to where your customer is making the purchase from: 0.5% if it's within Europe, and up to 2% for Canada and the US.

How does PayPal compare with other online payment methods?

PayPal is suited to businesses that regularly take online payments from around the world. This is because it includes realtime mark cross-currency exchange rates.

Some users have found that PayPal can take a while to release funds, even when a transaction is valid, which can be frustrating. If this is something you want to avoid, Worldpay could be a better option as it transfers funds within 30 minutes.

6. Shopify Payments

Best for creativity

Shopify Payments has a key asset in its functionality with its parent ecommerce company, Shopify. If you have a website on Shopify, then picking Shopify Payments as your online payment method is a no-brainer, as both work seamlessly together. Plus, when used with a Shopify website, Shopify Payments doesn't charge transaction fees, therefore greatly reducing the cost of the service.

Shopify Payments' payout time of two working days is average compared to its competitors but it's far from the speediest (this title belongs to Worldpay). This doesn't make Shopify Payments the best choice if your business depends on cash coming in fast in order to stay afloat.

Shopify Payments can serve businesses keen on flexibility (like seasonal ones) well, as it doesn't operate with fixed-term contract nor charges cancellation fees. Also, its simple, flat-rate pricing is easy to understand and benefits individual businesses, which lack dedicated staff to manage the accounting side of things.

Pricing

How much you'll pay to accept online payments with Shopify depends on the plan you select. 

Its cheapest plan, Basic Shopify, costs $29 (£23) per month, but comes with the highest credit card processing costs of 2.2% + 20p per online transaction.

The next plan up, simply dubbed ‘Shopify', is $79 (£63) per month, with online processing rates of 1.9% + 20p per transaction.

Advanced Shopify (the ecommerce platform's most expensive option) will set you back a whopping $299 (£240) per month, though it also offers the lowest credit card processing rates – just 1.6% + 20p per sale.

How does Shopify compare with other online payment methods?

Shopify is a good choice if your main focus is to design and create an ecommerce site. The ability to realtime track your transactions with ease and efficiency makes it a good choice for online retailers that want to keep an eye on the numbers. PayPal, on the other hand, requires you to sign in before you can see any transactions.

Being linked to an ecommerce platform means you can optimise your checkout, helping reduce bounce rates. You can also do this at an affordable rate with Square as its ecommerce site is free.

Top 3 tips for taking payments on your website

Online shoppers can be a fickle bunch. Almost 75% of online shoppers abandon their baskets before completing a purchase. Transactions can break down in seconds if you don’t give your customers a smooth and snappy shopping experience.

Follow these tips to keep people on your site and inspire them to buy:

1) Make it easy

Don’t make your users have to sign up for an account to pay. It’s one of the biggest barriers to making a sale. People can’t be bothered to enter their details and will often choose to abandon the purchase rather than signing up. By offering guest checkout you simplify a user’s journey and boost your chances of them making a purchase.

2) Make it look good

No matter where you host your payment page, it needs to look like it belongs to your website. Add your logo and colours to ensure a visually consistent path from browser to buyer. If your customer feels like they’re lurching around different websites to make a payment, they may just abandon their cart.

3) Make it quick

Don’t ask your customers for lots of details or make them navigate long, data-heavy forms. Only take the minimum amount of information you need for the transaction to take place. This speeds up the process and is sure to inspire trust in your website and services.

Next steps

If you're after a provider that has comprehensive features and affordable transaction fees, takepayments is a good choice, scoring an overall 4.8/5 in our research. However, takepayments will require you to be locked into an 18-month contract. If you'd rather not be locked into a contract, we recommend Square, which scores an overall 4.4/5, as it offers a free EPOS app, free ecommerce platform, and hundreds of integrations. However, it does have much higher transaction fees than takepayments.

Like the sound of them and want to start comparing your options? We can help.

Simply let us know a bit more about your business' requirements. We'll ask about your industry and expected sales volume, and whether you've accepted card payments online before (and, if so, which online payment method you used). When this is done, we'll match you with the top online payment providers that are the best fit for you.

Leading merchant account providers will send you quotes that are tailored to your business' size and ambitions. It takes just 30 seconds, and is free for UK-based businesses.