UK online sellers should accept card payments via Stripe or a similar processor at 1.5% plus 20p per transaction, optionally add PayPal for trust signal at 2.9%, and consider buy now pay later (Klarna, Clearpay) for higher-value categories. Direct debit via GoCardless or BryxoPay works well for subscriptions. The right mix depends on average order value and product type.

Payment costs are typically 2-4% of revenue for UK e-commerce. Reducing them is harder than it looks. The bigger lever is conversion, where offering the right payment methods can lift order rates by 10-25%.

What UK consumers actually pay with

Recent UK e-commerce data shows roughly:

• Debit cards: 55-65% of online transactions.
• Credit cards: 15-20%.
• Digital wallets (PayPal, Apple Pay, Google Pay): 20-25%.
• Buy now pay later (Klarna, Clearpay, Affirm): 5-10% and rising fast.
• Direct debit, bank transfer: under 5% for one-off purchases.

The mix shifts by age, category, and price point. Younger consumers use BNPL more. Higher-priced items see more PayPal and BNPL. Quick low-value purchases lean on stored cards.

Stripe

The default UK e-commerce processor. Standard fees:

• UK and EEA cards: 1.5% plus 20p.
• International cards: 2.5% plus 20p.
• Currency conversion: 2% extra.

Strong integration with Shopify, WooCommerce, BigCommerce, and most platforms. Fast onboarding (often same-day). Strong fraud tools.

Limitations: Stripe is selective about high-risk industries. Crypto, adult content, certain CBD products, firearms-adjacent, and some health products are restricted or banned.

For most UK e-commerce, Stripe is the right primary choice.

PayPal

The brand UK consumers most recognise. Adding PayPal to a checkout typically lifts conversion 5-10% even though it costs more.

Fees:

• Domestic: 2.9% plus 30p.
• International: 3.4% plus the currency conversion margin.

Why customers like PayPal: buyer protection, the option to pay through PayPal balance, and the trust signal of a familiar brand.

Why merchants hate PayPal: account freezes, slow dispute resolution, money held in reserve for new sellers, and customer-friendly chargeback decisions.

Most UK e-commerce sellers offer PayPal as a secondary option to Stripe rather than as the primary.

Apple Pay and Google Pay

Built on top of Stripe (or whichever processor you use). No additional fee. Same percentage as the underlying card transaction.

They speed up mobile checkout dramatically. UK e-commerce sites that add Apple Pay typically see 8-15% lift in mobile conversion.

Enable them. There is no good reason not to.

Buy Now Pay Later (Klarna, Clearpay, Affirm)

BNPL providers let customers split payments (often 3 instalments of 0% interest) or defer payment by 30 days. The merchant gets paid in full upfront, the BNPL provider takes the credit risk.

Fees:

• Klarna: typically 3-6% plus a fixed fee depending on the plan.
• Clearpay: similar range.
• Affirm: enterprise pricing.

Why offer BNPL: higher average order value (typically 20-30% lift), more conversions on higher-priced items, younger consumers expect it.

Why hesitate: cost (3-6% is 3-4x your card processing fee), category restrictions (BNPL providers avoid some categories), and the customer experience can fragment if the BNPL provider's app is the path to dispute.

Worth it for fashion, home goods, electronics, and any category where customers consider the price before buying. Less useful for low-margin commodity products.

GoCardless and BryxoPay (Direct Debit)

For subscription products and recurring billing, direct debit is dramatically cheaper than cards.

Fees:

• GoCardless: 1% plus 20p, capped at a per-transaction maximum.
• BryxoPay: similar pricing band.

Plus much lower failure rates than recurring card payments. Card subscriptions see 5-10% involuntary churn from expired cards, declines, and fraud blocks. Direct debit sees 1-2%.

If you sell anything monthly (SaaS, subscription boxes, membership, recurring orders), direct debit is the right rail for the recurring portion.

Other payment methods worth knowing

Open Banking pay-by-bank: instant clearing, very low fees (under 1%, sometimes free). Adoption growing slowly. Worth offering as an option, especially for B2B.

Cryptocurrency: rarely worth it for general UK e-commerce. Customers do not ask for it. Tax and accounting overhead is real.

Cheque or bank transfer: still used in B2B e-commerce for larger orders. Most B2C platforms have abandoned them.

Fees stack: what your actual cost looks like

For a typical UK consumer e-commerce business at £30 average order value:

• If 60% Stripe, 30% PayPal, 10% other: average cost is about 2.0% plus 25p per order, or 2.8% of revenue.
• Adding Klarna at 10% of orders: pushes average cost to 3.0-3.5% of revenue.
• If 50% PayPal (older audience): can rise to 3.5-4% of revenue.

For a healthier B2B model on Stripe-only with higher average order values: as low as 1.6% of revenue total cost.

Negotiate fees once you exceed £500,000 monthly volume. Stripe and PayPal both offer reduced rates for higher volumes.

Fraud and chargebacks

UK e-commerce typically sees 0.5-2% of orders disputed via chargebacks. The processor charges a £15-£25 dispute fee per case regardless of outcome.

Tools that reduce dispute volume:

• Stripe Radar: built into Stripe, costs 5p per transaction for the advanced version.
• 3D Secure: required by Strong Customer Authentication (SCA) rules for most UK transactions over £30 to a non-recognised card. Adds friction but shifts liability to the issuing bank.
• Address Verification System (AVS): basic but useful.

Bottom line

For new UK e-commerce: Stripe primary, PayPal secondary, Apple Pay and Google Pay enabled, Klarna for any product over £40 average order value.

For subscription: Direct Debit via GoCardless or BryxoPay for the recurring portion. Cards for the first transaction.