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Online Payment Systems for E-commerce

This article will review online payments systems and list the top payment providers for ecommerce in the UK.

Online Payment Systems

Thanks to the growing popularity of online shopping, there is now a huge range of online payment systems available for ecommerce merchants. Online payment systems are designed to allow for electronic payments for goods purchased over the internet.

In most cases, this means customers can pay with their normal bankcard in much the same way as they do in a physical bricks and mortar shop. However, instead of using a four digit PIN, the customer inputs their CVV code (the three digit code on the back of their card) for security.

Online payment systems are highly secure and the criteria for obtaining them for your business are strict because they are considered 'cardholder not present' transactions, a term which is fairly self-explanatory. Most systems require a merchant account with a bank but some offer an all in one solution for websites without one.

online payment system

Do not forget that your offline bank will charge you for an Internet Merchant Account (IMA) so do take the cost of that into consideration when comparing fees from online payment system providers.

Online Payment Systems for E-Commerce

There is an enormous choice of online payment providers. Some of the bigger providers do not require Internet Merchant Accounts from an offline bank, although most of the smaller companies do as they do not have the ability to offer it as a package.

Some of the major players and their products are reviewed below, but do consider smaller providers too as they can sometimes offer excellent per transaction fees compared to all-in-one providers.


PayPal offer the most straightforward of services, with levels depending upon your business needs. At the very convenient end of the scale, there is the account with no costs other than a transaction fee and no merchant account required.

At the micro-payment level, fees are 5% + 5p reducing to 3.4% + 20p for low level transactions and 1.4% + 20p for numerous transactions. There are lower cost options available for businesses with an existing IMA and a premium solution for large businesses at £20 per month.


Worldpay offer a merchant account as well as online payment processing so if you can't get or don't want to get an IMA through your offline bank, then Worldpay can offer that solution. For the all in one solution from Worldpay, there is a £75 set up fee, a £15 monthly fee and transaction fees starting at 1.9% +10p per transaction.


Nochex offer an all in one solution meaning you don't have to arrange a separate merchant account, payment service provider and SSL certificate. Ideal for businesses with little trading history, they do not charge a monthly fee but require a £50 set up fee and charge per transaction. The more transactions you process, the cheaper it becomes. Fees start at 2.9% plus 20p per transaction.

Choosing the Right Online Payment System

The right system depends on what your business is. Factors include whether you need a shopping cart, how many transactions you need to process and how much you are willing to pay. If you are working on very tight margins, then you need to go with a system with a very low fee that perhaps offers less convenience than higher fee charging companies.

However, some companies require greater complexity in the service and can benefit from a monthly fee plus lower transaction fee due to a very high volume of transactions. Alternatively, those selling only a few products a month will require a completely different system.

Next Steps

If you are interested in hearing more about online payment systems for your business scroll up and fill in the form to compare quotes bespoke to your needs.