How to take payments online

So, you’ve decided to start an online shop, subscription service, or other internet-based business, and you need to start taking card payments online. If you’ve never done this before, you might be feeling unsure about what you need to set up to do it safely and efficiently – and without being caught out by less than competitive credit card processing fees.

Don’t worry – in this guide, we’ll take you through everything you need to know about taking online payments. It might seem overwhelming at first, but ultimately you’ll need two things: a merchant account and a payment gateway (or an all-in-one payment solution that will provide both).

How do I take payments through an online shop?

The two most important steps to taking credit and debit card payments online are:

1. Acquiring a merchant account
2. Setting up a payment gateway

The merchant account is where your money goes (before landing in your business account), and the payment gateway is how it gets there.

You might be thinking: “Can’t I just take the money directly into my business account and cut out the middle person?” It might not sound like it, but having a merchant account actually makes the whole process run smoother, as it allows for instant verification between your bank and the customer’s bank, and makes processing chargebacks easier.

Speaking of chargebacks, these are a consistent pain point for online sellers, and so you should keep an eye out for platforms that employ ‘automated evidence collection’. This tool continuously gathers relevant data, to prevent you from being a victim of friendly fraud (when a false claim is made against a legitimate purchase).

Step 1: Choose a merchant account

There’s no one-size-fits-all approach to choosing the best merchant account, but you’ll need to consider the key points such as transaction fees, security, features, and settlement times.

It will depend largely on your business size and needs, but the main factors to watch out for are:

Transaction fees

Merchant accounts will take a percentage of each sale you make. These will vary from provider to provider depending on how the sale was made, so you need to get yourself the best deal. There can be a lot of hidden and scenario-specific fees, like high rates for non-EU cards. You can read more in our full guide to credit card processing fees.

It’s worth noting that 2026 continues to see a rise in the popularity of open banking Account-to-Account (A2A) payments. A2A payments refer to the direct transfer of funds between two bank accounts. They’re gaining popularity as they can cut out payment processors from the journey, reducing fees.

Just be aware there are some fairly significant compliance and regulatory issues associated with open banking. The other major downside is the tricky integration process. It can require highly modern systems and some technical know-how to implement.

Contract lengths

Many will offer a free plan, which is great if you’re just getting off the ground and need to avoid committing to long term monthly fees – but generally, the transaction fees will be higher. If you already have a steady turnover and don’t mind committing to a longer contract, you should get more competitive transaction fees.

Payout times

Different providers will have different timeframes for transferring your funds into your bank account, with some taking a full working week, whereas others can provide next-day payouts. In these leaner times, most businesses will be reliant on a fast cash flow: next-day settlement should be considered the gold standard.

Support and features

Each will offer its own list of extra features and helpful services like invoicing, inventory management, or marketing and data tools. For 2026, you should also expect AI-powered features, to alert you about potential cash flow trends or highlighting when you need re-stock certain items.

You’ll also want a service that can provide a robust range of help and support if you run into trouble. If you’re an all-hours business for example, you should prioritise 24/7 support options.

Customers are also now expecting a more personalised shopping experience: look for providers that can use checkout data to provide targeted loyalty offers or tailored purchase recommendations.

Payment types

Customers want a wide range of payment options. Of course they’ll expect to pay by contactless, pay by link, and also through invoices, but in 2026 customers will also start to expect some more advanced payment methods such as social payments like WhatsApp Pay.

With the continuing rise of social commerce in the UK, and methods like WhatsApp Pay, customers will now also expect payment methods where a “buy” button is built directly into the chat app, as opposed to a link.

Security

A PCI DSS compliant service is a non-negotiable, and at a minimum it should offer strong security features such as data encryption and fraud protection measures.

In the current, rapidly evolving, tech landscape you should prioritise services with AI-driven fraud protection and autonomous threat hunting.  You’ll need these advanced tools to defend your business against sophisticated phishing scams, synthetic identity theft, and deepfakes.

To really reduce your risk from cyber-threats, small businesses should consider adopting Zero Trust Architecture (ZTA) into their payment framework. This is security method where every request is deemed to be a threat until verified otherwise. It might seem radical but it can help protect your business from bot attacks.

Step 2: Set up your merchant account

The specific process, and requirements, of setting up a merchant account will vary between providers – but it’s a safe assumption that you’ll need most of the following:

• Personal identification and proof of address
• Business plan: this should include what type of business you are and what you’ll be selling (you can use our free simple business plan template to get started!)
• Your turnover expectations for card payments, as well as the average transaction value
• Any recent relevant trading accounts

Once you have your documentation in order, you can complete the application online via your chosen provider’s website.

The merchant account provider will then be in touch as to whether your application has been approved, and what the next steps will be. This could take as little as a week, or longer depending on how new your business is.

Step 3: Choose a payment gateway

Much like your merchant account, choosing the best payment gateway will depend on what type of business you’re running and your specific needs. Some will be more suited to sole traders who’ve just started taking low volumes of small transactions, whereas others will be better for businesses dealing with high value luxury items.

The main factors to look out for in a payment gateway are:

• Fees and costs: some will charge a monthly fee, whereas others will have a free plan but will take a percentage of each sale. Always make sure to go over every fee and bill you’ll be subject to before signing up.
• Compatibility: you’ll need it to be able to integrate with your other payment software, like your ecommerce site and shopping cart plugin.
• Security: this will be your customers’ biggest concern, and so it should be yours as well! Make sure your payment gateway provider is fully encrypted and data compliant.
• Customer support: is there a 24/7 help service if your business operates around the clock?
• Payment types: what type of payment cards and methods are accepted?

Another key decision in which payment gateway is right for you is the choice between a hosted, self-hosted or an API-hosted gateway. If that sounds a bit technical, don’t worry – we’ll go into more detail below.

Our top-rated payment gateways are:

0 out of 0

• backward
• forward

		Best for:	Overall score	Transaction fees from	Monthly costs	Payout time	Contract length
BEST OVERALL
takepayments	Stripe	Worldpay	Shopify	Revolut
A flexible payment structure	Strong security features	Selling high-value goods	An all-in-one solution	Affordability
4.8	4.6	4.6	4.2	4.1
Quote-based	1.5% + 20p for standard UK cards	1.3% + 20p	1.5% + 25p (Advanced plan)	1% + 20p
Quote-based	None	None for pay-as-you-go plans	From £19	None
Next business day	Up to seven business days	Same day or next day	Two to five business days	Next day
12 months	None	18 months	None	None
Try takepayments	Get Quotes	Try Worldpay	Get Quotes	Get Quotes

Step four: Set up your payment gateway

This will depend on which type of payment gateway you choose. There are three main versions:

Hosted payment gateways

These payment gateways are hosted by the provider, and the upside is that they are far easier to set up and connect to your site with no coding required. The downside is that they take your customer off your website and redirect them to the provider’s site to input payment details, before being returned to your site.

This may lead to confusion and a higher number of abandoned carts (you can find out how you can use AI to prevent this from happening in our top tips to prevent cart abandonment). Still, ff you’re a solopreneur, you’ll want to opt for a hosted gateway because of the ease and simplicity it offers.

Self-hosted payment gateways

This is where your customer will input their payment information directly onto your website page, but the payment details are processed on a third party server hosted by the payment gateway. The downside of this method is that you will be responsible for adhering to PCI security standards.

API-hosted payment gateways

These are connected to your website via an API (Application Programming Interface), meaning that your customer won’t ever leave your site to make payment. They also give you a large amount of control over the look of the page, so you can create a branded payment experience.

These are far more complicated to set up and generally need advanced technical skills which makes them better suited to more developed businesses with in-house tech teams. However, the rise of AI-assisted coding is starting to lower the bar for this. You’ll also be responsible for ensuring the customer data is secure and up to PCI standards.

What is the process of taking a card payment online?

Let’s go through a scenario to make this a bit clearer:

1. Nina visits Rosie’s Roses, a website that delivers flowers.
2. After selecting the flowers she wants, Nina is taken to a checkout page, where she is asked to input her payment details.
3. After she clicks on the submit order button, the website sends her card information to the payment gateway (though this stage will vary depending on what type of gateway is being used by the merchant).
4. The payment gateway will then encrypt the card details and pass them on to the acquiring bank acting for Rosie’s Roses.
5. The acquiring bank then passes the baton onto the credit card company who issued Nina’s card, and her bank.
6. The credit card company confirms that Nina has the requisite credit to make the purchase, and the chain of information is reversed back to the payment gateway so that it can go ahead with the transaction (it sounds like a lot of chatting, but it all happens in milliseconds!).
7. If the purchase is approved, both Nina and Rosie’s Roses will be notified and the customer’s bank will send the funds to the business’s merchant account.
8. Rosie’s Roses sends Nina a beautiful bouquet of flowers, the merchant receives Nina’s payment, and everyone is happy!

How can I accept mobile wallet payments?

Enabling mobile wallet payments is a straightforward process but you just have to make sure you’ve signed up with a payment processor or ecommerce platform that supports them, as it’s not something they all do.

If yours does, you’ll have a mobile wallet payment button on your checkout page. If not, you’ll need to build this into your ecommerce website yourself. This will be trickier, and you’ll need to follow the individual developer guidelines on how to do this.

How do I take payments online for services or subscriptions?

There are a few key methods of charging online for services or subscriptions:

How do I take payment via direct debit?

If you want to take automated, regular payments from a customer without needing them to resubmit their details each time, you can enrol in the Bacs direct debit scheme via your bank.

Once you’re approved, in order to start taking direct debit payments, you need to submit payment files containing your customers’ banking information and details to the Bacs system. Bacs then sends this information back to your customers’ banks, which approve and organise the payments.

You can do this via two different methods:

1. Do it yourself using a SUN number and Bacstel-IP (the cheaper option, but a lot more complex)
2. Use the services of a direct debit bureau (this costs more, but makes your life a whole lot easier)

How do I take payment via payment links, invoices and bills?

Payment via invoice is a popular option amongst single-person operations, such as contractors, because you don’t need a website in order to take payment.

There are a number of software platforms that can help you manage and send out your invoices or bills. Some payment processors (such as Stripe) can host a payment page for you – all you need to do is send a link to your client via email, direct message, or SMS.

How do I take payment via bank transfer?

During the checkout process, your customer will be provided with the bank details they will need to send a payment. This normally includes a unique transaction reference number. The customer then manually instructs their bank to send the funds to you, along with the unique transaction reference code.

Traditionally bank transfers have been viewed as less preferable for the consumer because they’re more time consuming, more exposed to fraud, and come with a higher risk of error (as they have to input your details manually). However, due to the recent rollout of Confirmation of Payee (CoP) in the UK and open banking technology, bank transfers have become much safer.

How do I make sure online payments are secure?

To take card payments, you need to be PCI DSS compliant. Any data your business collects from cardholders needs to be securely held with a provider that is compliant with the Payment Card Industry Data Security Standard.

The best and easiest way to make sure this is the case is to sign up with a payment service provider that will handle and store your customers’ sensitive information themselves as part of the service, on their servers, so you don’t have to shoulder that responsibility.

In the modern landscape, customers will also start to expect trust signals like biometric-enabled checkout such as face and touch ID to verify payments. In 2026, manual card entry is now viewed as a security risk.