Blog post image for How to accept online payments in the UK: A comprehensive guide

How to accept online payments in the UK: A comprehensive guide

Sakkun Tickoo Sakkun Tickoo - 27th Jun, 2024

With an increasing number of online payment companies providing a variety of payment solutions, evaluating the options to accept online payments and making an informed decision becomes all the more critical.

When starting a new business, a critical question that comes to mind is, “How do I accept payment?”

If you are a new entrant in the world of e-commerce, then one of the key considerations for your business is selecting suitable online payment solutions which can provide a seamless and secure payment experience to your customers.

Customers today seek quick, reliable, and convenient payment options to process online payments, and how you accept payments online can significantly impact your overall business performance.

We are going to give you a comprehensive download in this in-depth analysis of various online payment solutions which are available to UK businesses and the important payment processing factors which can impact your e-business.

Let’s start by addressing a basic question, “What are merchant payments?”

Merchant payments simply refer to the payments made by a customer to a business using a credit card, debit card, or other electronic payment methods, in exchange for their goods and services. These online payments are processed via third party FCA-authorised payment providers through payment processing systems and gateways which ensure secure and seamless financial transactions between consumers and merchants.

What are the different ways to accept online payments?

Point-of-Sale Systems

For in-person transactions, Square, SumUp and others provide integrated hardware and software solutions for hassle-free POS transactions. Wonderful offers a “soft-POS” instant pay by bank solution with its smartphone POS app, One by Wonderful.

Credit and debit cards

Credit and debit cards are one of the most widely used online payment methods by customers who do not prefer cash-on-delivery. Payment gateways like PayPal, Stripe, and Square allow you to set up a card transaction facility in a few easy steps.

Digital wallets

Digital wallets are one of the fastest-growing online payment tools for quick and secure transactions that can be performed effortlessly from your mobile device. Google Pay, Apple Pay, and Samsung Pay are prominent names in this field.

Bank transfers

Traditional bank transfers, such as the bankers automated clearing system (BACS) or the clearing house automated payment system (CHAPS), are still popular ways to accept payments online in the UK. Their robust security measures make them a trustworthy choice for high-volume transactions.

Online payment platforms

Online payment companies like Wonderful, PayPal, Venmo, and Revolut provide user-friendly, secure and seamless payment platforms which enable merchants to accept online payments in real-time.

Pay by bank

Open banking-powered pay-by-bank is another excellent online payment solution for businesses to accept payments online. Buyers can directly transfer funds from their bank account to merchants' accounts, bypassing the need for any third-party processors. This mitigates the risk of data infringement and facilitates instant payments. Wonderful is leveraging this feature to provide a robust online payment interface.

Buy now, pay later (BNPL)

This is one of the most innovative online payment options that allows customers to buy now and pay later in installments. Players like Klarna and Afterpay have added to its growing acceptance, particularly among the younger generation.

Cryptocurrencies

Despite stringent regulations, cryptocurrencies like Bitcoin and Ethereum are gaining momentum as a new-age payment method. An increasing number of merchants are starting to accept online payments through cryptocurrencies in the United Kingdom.

myPOS: Instantly accept payments online and in-person

An overview of myPOS

If you are seeking a comprehensive online payment solution that works seamlessly across online and in-person platforms, then myPOS is the ideal choice. Its feature-rich offer includes instant payments, multi-currency accounts, a reasonable fee structure, a wide range of payment options, and easy integration with your online store. The biggest advantage for businesses with brick-and-mortar outlets is that myPOS also facilitates in-person transactions.

Setting up your myPOS WooCommerce payment plugin

●     Register your business: Register on the myPOS website and furnish your business information.

●     Select payment devices: myPOS provides a variety of payment devices, including POS terminals and card readers, for in-person transactions.

●     Integrate the online payment gateway: Utilise the integration tools provided by myPOS to incorporate payment functionality into your website. This may encompass the integration of APIs for custom websites or plugins for prominent e-commerce platforms.

●     Accept online payments instantly: MyPOS's instant payment processing is a notable feature, as it ensures that funds are accessible promptly upon the completion of a transaction.

Why should merchants accept digital wallet payments?

One of the most in-demand options to accept online payments is through digital wallets. They operate on cutting-edge technologies like Near Field Communication (NFC) to enable in-store and online payment processing. Digital wallets store customers’ and merchants’ business information in a multi-layered, secure environment and allow users to make hassle-free payments through their mobile devices.

●     Apple Pay: Apple Pay is known for its security features and convenience of use on Apple devices. It secures transactions with tokenisation and biometric authentication (such as Face ID or Touch ID) and allows merchants to accept payments online without safety concerns.

●     Google Pay: It’s the popular choice among Android users. GPay, as it’s commonly known, interfaces with a variety of Google services and provides a consistent payment experience across devices and platforms.

●     Samsung Pay: Samsung Pay uses both NFC and MST (Magnetic Secure Transmission) technologies, allowing it to work with a wider range of payment terminals.

How to accept online payments without a merchant account?

Online payment companies like PayPal, Wonderful, and Stripe offer payment processing solutions which allow you to bypass the conventional merchant account and accept payments online. Businesses can accept cards or other payment options using these platforms, which aggregate transactions, eliminating the need for merchant accounts.

The benefits and drawbacks

Benefits:

●     Easier Setup: The process of setting up is typically more expedient and less complicated.

●     Reduced initial investment: There is no requirement for a dedicated merchant account, which can incur the price of setup as well as monthly fees. This results in lower upfront expenditures.

●     Streamlined management: The third-party processor is responsible for a significant portion of the backend payment processing and compliance, which simplifies management.

Drawbacks:

●     Long-run cost implications: When compared to regular merchant accounts, aggregation accounts typically come with higher transaction fees. This is because aggregation accounts are used to process more transactions.

●     Less Control: It is possible that you will have less control and flexibility over the process of making payments.

●     Probable delays in fund settlement: Some online payment companies which facilitate online payment processing can hold funds for longer periods, particularly for new accounts or transactions that involve a high level of risk.

Among the several providers of online payment systems, the following are some of the most trusted companies in the UK which offer a variety of solutions to accept online payments.

Wonderful

Wonderful is an emerging name in the e-commerce market in the UK. They provide UK businesses with a variety of options to accept online payments. Their cost-effective online payment solutions integrate with various platforms and provide an effortless checkout experience for consumers. Some of their key features are:

●     One App: This is one of the most budget-friendly point-of-sale (POS) payment applications in the UK. You can accept payments by generating tap-to-pay links and QR code payments. It leverages the power of open banking to process payments instantly over a safe network and settle payments in real-time.

●     WooCommerce payment plugin: Wonderful’s payment plugin blends easily with your legacy system and offers a hassle-free checkout experience for your customers. Their ‘Plus’ plan comes at a remarkably affordable fee of £19.99 for 2000 monthly transactions. You only pay 1p per transaction for transactions outside your monthly bundle.

●     API integration: Wonderful's application programming interface (API) is very adaptable and easy to use for developers. It facilitates integration with unique apps and offers robust support for personalised payment solutions.

Razorpay

Razorpay has gained worldwide popularity among online payment companies due to its extensive feature set, which includes recurring payments, subscription billing, and an intuitive dashboard. Their USPs include:

●     Enriched functionalities: Accommodates a variety of online payment options, such as digital wallets, net banking, UPI, and credit/debit cards.

●     Customisation: Provides APIs for customised payment solutions and integrations.

●     Analytical insights: Offers comprehensive reporting and analytics tools to monitor and enhance payment processes.

PayPal

PayPal is one of the most widely acclaimed online payment companies with a variety of online payment solutions for merchants to accept payments online. Their free-to-install plugin merges perfectly with most e-commerce platforms and provides a robust security mechanism. The PayPal advantage includes:

●     Strong reputation: Recognised and trusted by millions of users across the globe.

●     Buyer protection: Provides robust consumer protection policies, which can boost consumers' confidence and result in increased business volumes.

●     Adaptability: Functions as a versatile payment processor that accepts online payments in a variety of ways, such as bank transfers, rewards balances, and credit cards.

Stripe

Often a developer’s preferred choice among various online payment companies, payment solutions offered by Stripe come with a powerful API. E-businesses with a global presence can benefit from their wide array of online payment options and currency acceptance. The following are the stand-out features of Stripe:

●     Customisability: Highly adaptable, with full API back-end support.

●     Worldwide reach: It's great for global enterprises because it supports many currencies and payment methods.

●     Additional features: Includes features to help with billing, subscription administration, and preventing fraud.

Square

Ideally suited for small businesses searching for all-in-one online payment solutions, Square provides a comprehensive POS system with easy navigation that augments the user experience (UX). The key advantages are:

●     Easy to install: Small enterprises will find the setup and operation straightforward.

●     Integration: Offers a unified solution for both online and offline transactions by integrating seamlessly with Square's POS system.

●     Additional services: Provides features such as inventory tracking, employee administration, and invoicing.

As you explore various online payment companies and their payment solutions to accept online payments, ask yourself if the payment processing gateways meet the following requirements:

a)    Are the online payment systems easy to integrate with my e-commerce platform?

b)    Do they have a simple user interface that facilitates quick checkout?

c)    Can I get valuable business insights that will help me make future decisions?

d)    How secure are these payment processing systems?

e)    What are the cost implications?

These critical evaluations will give you clarity when it comes to finalising the online payment processing solutions for your e-commerce venture.

How to accept online payments from my website?

Getting the basics right

Let’s start with the basics before diving deeper into the technical side of online payments:

●     E-commerce platforms: These software solutions enable e-businesses to set up their online stores and operate smoothly, with multiple additional benefits. WooCommerce, Shopify, and Magento are some prominent names in this field.

●     Payment gateways: Both online and brick-and-mortar businesses rely on these services to handle their credit card transactions. They send the website's payment details securely to the acquiring bank and then relay those details back. Wonderful, Square, PayPal, and Stripe are a few popular examples.

●     Merchant accounts: Tailored specifically for business entities, these bank accounts accept credit and debit card payments along with a host of other methods. They are the bridge between your business bank account and the customer’s account. However, if your integrated payment processor offers the facilities of a merchant account, then you may not require one. We will explore all possibilities as we move ahead.

Choosing the right solutions to accept online payments

Earlier in the piece, we encouraged you to write down some key questions before choosing an online payment processing company. Let’s look at the ideal answers that will guide you in the right direction:

●     Security: If you are taking payments via card, confirm that the platform adheres to PCI DSS standards and provides encryption and fraud detection.

●     Fees: Evaluate transaction fees, monthly fees, and any additional expenses. Most providers have a pence-per-transaction fee but additionally charge of the sales value to process your payment, while Wonderful offers a cost-effective flat-fee model. Assess their service benefits in comparison to the commercial impact.

●     Integration: Determine whether the platform is seamlessly integrated with your e-commerce site and legacy system. Stripe is renowned for its effortless integration with a diverse array of applications.

●     User experience: To prevent cart abandonment, the checkout procedure should be simple and seamless.

Setting up an account

After you have decided on your online payment partner, move on to the setup process. Typically, this includes sharing relevant business information, completing identity verification, and linking your merchant account.

●     Registration: The initial step is to register for an account on the website of the payment platform. Fill out the required fields and submit your details.

●     Verification: To ensure your identity and the integrity of your firm, you must submit the required documents for verification, such as certificates of registration and tax identification.

●     Linking your bank account: To enable fund transfers, you must first link your bank account with the payment platform. To do this, simply provide your bank account data.

●     Personalise: Make the payment UI seem like your brand to make it more user-friendly.

Integrating payment solutions

A vital step in accepting online payments is to integrate payment functionality with your website or mobile application. Most payment gateways offer seamless integration through a customisable Application Programming Interface (API) or easy-to-integrate plugins. For instance, if you are using WooCommerce or Shopify, you can simply install the plugin and update your payment credentials in the configuration settings. Refer to the official documentation or the Software Development Kits (SDKs) given by your gateway provider for guidance. Platforms like Wonderful come with robust support centres for further assistance.

Test-run the payment mechanism

To ensure that your customers do not encounter any glitches, it’s important to do test transactions to check if everything is in order. Errors, if any, should be rectified before you live with your payment solution. Follow the simple steps below, and you’ll be good to go:

●     Transaction Flow: Ensure that transactions are executed without any unintended bottlenecks.

●     Security: Sensitive information should have end-to-end encryption and not be exposed to probable cyber theft.

●     User experience: To guarantee that the consumer journey is user-friendly and intuitive, it is necessary to simulate it.

Launching and monitoring

Following the above steps, you can safely launch your e-commerce site. However, you must review the performance of your online payment platforms to ensure that probable technical issues are rectified with minimum downtime. Continuously monitor transactions for abnormalities and be informed about any new features or upgrades from your payment provider. Review your transaction statistics on a regular basis to discover trends or potential problems, such as unusual chargeback rates or fraudulent efforts.

The above procedure will enable you to accept online payments through various payment modes, such as credit cards, Pay by Bank, traditional bank transfers like BACS and CHAPS, and BNPL (buy now, pay later).

Conclusion

By now, you have understood why the payment option is so important for online businesses.

In this digital era, companies must accept online payments to stay competitive. To sustain and expand your e-commerce venture, select suitable online payment platforms that comply with regulatory mandates and provides a seamless checkout experience by integrating with your online store.

By understanding the significance and the integration process of robust online payment solutions, you unleash the potential of your e-commerce business. Explore various online payment options like Wonderful, Stripe, Square, and PayPal to assess the best fit for your enterprise and make an informed decision.

FAQs

What is the safest way to accept online payments?

Trusted payment gateways like Wonderful, PayPal, Stripe, etc. are compliant and use modern technologies to build a robust data protection system. You should verify the online payment companies’ encryption mechanisms, fraud detection capabilities, and regulatory compliance before engaging with them.

Which businesses need online payments?

Any e-commerce entity must accept online payments. Online stores, subscription services, digital content providers, freelancers, and consulting or coaching enterprises are some examples.

Photo by Firmbee.com on Unsplash

Wonderful Payments

Be wonderful.
Get started today.

Accept instant payments at only 1p per transaction.

WooCommerce logo

WooCommerce plugin.
Seamless checkout.

Slash your payment processing costs with ZERO percentage fees and deliver a seamless checkout experience.

Xero logo

Xero integration.
Connected accountancy.

Import customers from Xero and automatically send emails and invoices for payments.

One by Wonderful

Instant bank payments

Wonderful Payments

Be wonderful.
Get started today.

Accept instant payments at only 1p per transaction.

Happy business owner

Featured posts

Have a look at these other articles that we think might interest you.

Need support or advice?

At Wonderful we're dedicated to making things as easy as possible for our commercial and charity partners to get onboard. We have a range of resources to help you find the information and answers you need to get up and running as quickly as possible.