Online Payment Systems

Credit and Debit Cards

Credit cards and debit cards are the most popular ways to pay online in the UK.

In 2010 we spent £54 billion in 717 million online card payments. Of those, 52% were made on credit cards and 48% on debit cards. This accounted for more than 80% of UK online spending.

[Data from the UK Cards Association Annual Report 2012]

To accept credit card and debit card payments you need two things:

Alternatively, some services provide both these services together so you don't need to apply for your own merchant account. These are known as 3rd-party payment providers or bureaux services. They include PayPal and Google Checkout.

Payment Gateway and Merchant Account Fees

You'll typically pay:

  • monthly fees of £20 to £40
  • per-transaction fees of 1% to 2.5% of each transaction amount, plus around 10p
  • there is sometimes a setup fee, too

Online Card Security

If you're going to accept credit and debit card payments, you need to make sure the card details are handled in a secure way.

The simplest approach is to use a solution where customers enter their payment details into a special secure page hosted for you by your payment services provider.

Alternative Payment Systems

As well as credit card and debit card payment systems, there are a variety of alternative payment systems. These include:

  • PayPal
  • Google Wallet
  • in-app purchases via mobile devices
  • Direct Debit (e.g. using a service such as GoCardless)