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Online payment systems for small businesses

If you are thinking about taking your business online or starting an online business from scratch then you will need to choose the right online payment system. There are a variety of online payment options to consider if you are setting up your business online. You will need to keep in mind the ease of using each method, the transaction fee rates, the help and advice available, as well as other factors.

Online payment systems

To help you get started on setting up your business online, here are some of the best online payment system options for your small business.

PayPal

PayPal is probably the best known online payment system, therefore you might feel comfortable using a globally well-known name and brand. With PayPal being international, the main benefit is that it doesn’t limit your customer base to your home location. Even if you run a UK based business, you can take payments from international customers.

The transaction fee is 1.9% + 20p per transaction if the sales volume is under £55,000 per month. A higher rate applies if the sales volume is under £1,500, which is 3.4% + 20p per transaction. The other fee to consider is the monthly fee. You can opt for a free version or pay £20 per month for the Web Payment Pro version.

Pros:

  • Easy to integrate
  • Doesn’t limit the location of customers
  • Fraud protection
  • Mobile checkout
  • Offer a free version and a professional version for a fee

Cons:

  • Expensive fees for low sales

WorldPay

WorldPay is another great option with its flexible packages available. The online payment method is similar to Paypal in the sense that it allows the merchant to receive payments in 115 currencies. WorldPay offers an account for the merchant, allowing them to see all the transactions come through.

The price for the ‘pay as you go’ package is 10p per transaction, with the online setup fee of £25. The fixed monthly price is £49.99 per month, this includes the transaction fee up to the set limit. The standard package pricing is £19.95 monthly, 10p per transaction with an annual management fee of £29.99.

Pros:

  • Accepts international payments
  • No joining fee
  • Reliable
  • Fraud screening
  • Allows you to set subscription type plans for customers

Cons:

  • Transaction fees vary depending on the volume, so you can’t get an accurate number without knowing the number of sales.

Stripe

Stripe is another good option, offering competitive prices with an easy to use, simple system. It’s becoming one of the fastest growing online payment systems because of the good prices and how easily it can be integrated.

There are no set up fees when it comes to using Stripe. The rate for European cards if 1.4% + 20p per transaction. The rate for non-European cards is 2.9% +20p per transaction.

Pros:

  • Competitive rates
  • Easy to use
  • No monthly fees or set up fees

Cons:

  • Fees for a non-European card is higher than some other online payment systems

Shopify

Shopify is an American online payment system that is gaining popularity in the UK. The app is great for beginners as it offers everything you need to set up and run an online business. Some of their services include web hosting and payment processing.

The rates for Shopify are 2.2% + 20p on the basic scheme per transaction, and 1.6% + 20p for the advanced scheme. The monthly fees for the basic package are $29 and the advanced is $299. This may seem pricey but does include a website, blog and a free SSL certificate. There is also another package, which has a rate of 1.9% + 20p per transaction, with the monthly fees of $79.

Pros:

  • Offer additional services
  • You can get a free 14-day trial
  • Competitive prices
  • Multiple packages to choose from
  • No setup fees

Cons

  • Pricey advanced package

Amazon Pay

Amazon Pay is great as it is again internationally known and used, making it easier to take payments from international customers. It’s also easy to use and integrate, and you don’t need to create an account to use it.

The rates for Amazon Pay can be on the pricier side of the scale though. For under £1,500 income a month the rate is 3.4% + 20p. If the income is over £55,000 then the rate is 1.4% + 20p. There are also cross-border fees for outside the UK, which range from 0.4% to 1.5%.

Pros:

  • Easy to use
  • Known worldwide
  • Competitive fee prices for high volume sale
  • Fraud prevention

Cons:

  • Pricey rates for low volume sales
  • Takes 3-5 days to get paid – which is quite slow.

More on starting up and growing your business.

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