The best online payment systems for your retail business

by Jake Martin, Title Text

3 min read

Receiving payments is probably the most important aspect of running a retail business, and the right payment system will ensure quick reimbursement, low overheads and security. Here are a few of the ways top retail businesses across the UK are securing their online payments.

 

You might be surprised to hear that while 70 per cent of UK businesses have a website, less than 40 per cent of these can accept online payments[1]. Yet more and more shoppers are now heading online, with the number of online card transactions increasing by 20 per cent in the last year. In fact, UK consumers spent £11.5 billion online in the 12 months to August 2015, according to The UK Cards Association[2].

Ensure your small business isn’t missing out on its slice of the pie by offering online payment services for your customers. These six options offer the most compelling benefits.

PayPal

Pros: Worldwide availability, secure, merchant discounts.

The convenience of PayPal is that it is a worldwide online payment service, so it doesn’t confine your business by location. And, best of all, customers don’t need a PayPal account to use it.

Due to its global popularity, PayPal is also easy to integrate into your existing website platform. However, for light or seasonal users, PayPal can be comparatively expensive. Starting from 3.4 per cent + 20p for retail purchases, the fee reduces as your monthly sales volumes increase.

Meanwhile, heavy retail users can benefit from a merchant discount of 1.9 per cent + 20p if monthly sales transactions exceed £15,000.

 

Worldpay

Pros: Reliability (more than 20 years’ experience), security and risk management.

One of the original online payment systems, Worldpay is well established in the UK, with more than 250,000 businesses using the service to manage their payments.

It’s a bit pricier than some other options – with a 2.75 per cent transaction fee for credit cards and 39p for debit cards – but gives you access to a comprehensive service offering. Multiple payment tools allow you to receive payments over email and phone, set up payment plans and subscriptions – all in more than 100 currencies and more than 30 languages.

 

Stripe

Pros: Simple to use, developer-friendly APIs.

The popular US online payment system made the trip across the Atlantic about two years ago. And while Stripe does include a flat rate of 2.4 per cent + 20p per transaction, there are no extra charges for using different cards or currencies – keeping things nice and simple.

Login and Pay by Amazon

Pros: Mobility, security, global presence.

Like PayPal, Login and Pay by Amazon is a globally recognised online payment gateway. It’s easy to integrate and offers no set up or commitment fees. And, like PayPal, users don’t require an account to use it.

Login and Pay by Amazon offers a transactional fee of 3.4 per cent + 20p, which includes fraud and protection at no extra cost. What’s more, customers can shop from their smartphones and tablets with no extra setup for you.

GoCardless

Pros: Affordable, UK-based, no setup or commitment fees.

Have a simple, straightforward retail website? GoCardless may be the answer for you. Offering a very low rate of 1 per cent (or £2, whichever is lower) and no monthly or setup fees, it’s also based in the UK.

It does, however, lack the flexibility offered by other payment gateways, so if you’re planning to grow or further develop your business quickly, it might be worth doing your research.

Directlii

Pros: Advanced options, flexible, low-cost.

Another UK-based offering is Directlii, which provides an advanced service in partnership with GoCardless. Directlii is an ideal option for online retail businesses where the price of goods or services isn’t fixed, but based on some other factor (like time or usage levels). Gaming sites, for example, can benefit from Directlii’s service offering.

Best of all, it offers a 1 per cent transaction fee – rivalling competitors like PayPal and Amazon.

Whatever your business type and size, you can rest assured there is an online payment system to suit your needs. You just need to do your research to figure out the best option.

For more information on running a retail business, check out our guide to Your first year in retail.

Want to simplify your invoicing and payments? See how QuickBooks Online can help you get paid faster – sign up for a free trial.

 

[1] http://www.electronic-payments.co.uk/ecommerce-in-the-uk

[2] http://www.theukcardsassociation.org.uk/news/CESAug2015news.asp

Information may be abridged and therefore incomplete. This document/information does not constitute, and should not be considered a substitute for, legal or financial advice. Each financial situation is different, the advice provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation.

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