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Selling online means taking payments online, and every one of those payments runs through a payment gateway. Choose well and payments are smooth, secure and fairly priced. Choose badly and you lose sales to clunky checkouts and pay more than you need to on every order. This guide explains what a gateway does, how the fees work, and how to compare providers so you get paid reliably without overpaying.
In short. A payment gateway is the software that securely takes card and wallet payments on your website. You pay a fee on each transaction, plus sometimes a monthly charge. Digital wallets are now projected to make up over half of online payments, so accepting them matters as much as accepting cards.
A gateway sits between your website and the banking system, handling the sensitive part of every online sale. When a customer pays, it securely captures the card or wallet details, runs the security and fraud checks that protect both sides, checks the payment is authorised, and moves the money towards your account. Because it handles card data, a good gateway also keeps you on the right side of security standards, which matters if you sell online at any scale.
These three terms get mixed up constantly, so it helps to separate them.
Gateway. Captures the payment on your site and passes it on securely.
Processor. Moves the transaction through the Visa and Mastercard networks to the banks.
Merchant account. Where funds settle before they reach your business bank account.
Modern all in one providers such as Stripe, PayPal and many others bundle all three into one service, which is by far the simplest option for most businesses. Larger or more complex operations sometimes piece these together separately for more control, but few small firms need to.
Online card payments usually cost a little more than in person ones, because card not present transactions carry more fraud risk. You typically pay a percentage of each sale plus a small fixed fee, and some providers add a monthly charge on top. Underneath every deal, interchange is capped by UK rules at 0.2 percent for consumer debit and 0.3 percent for consumer credit, so that part is the same for everyone. The real difference between providers is their own margin and how they package it, which is exactly the part you can compare.
Digital wallets such as Apple Pay, Google Pay and PayPal have moved from convenience to expectation. They are projected to account for more than half of all online payments, and around a fifth of total transaction volume in 2026. Offering them reduces friction at the checkout, because customers pay with a fingerprint or face scan rather than typing card details, and that lift in convenience often lifts conversion too. A gateway that supports the wallets your customers actually use is no longer optional.
Taking payments online means handling card data, which brings security obligations under the card industry standards known as PCI DSS. A good gateway shoulders most of this for you by handling the card details on its own secure systems, so the sensitive data never touches your servers. When comparing providers, check how they handle compliance, because a cheaper gateway that pushes more of the security burden onto you can cost more in effort and risk than it saves in fees.
✓ Clear per transaction pricing, with any monthly fee shown up front.
✓ Support for digital wallets and the cards your customers use.
✓ Fast, predictable settlement of your money.
✓ Easy integration with your website or ecommerce platform.
✓ Strong fraud tools and clear handling of PCI compliance.
✗ A low headline rate with monthly and hidden fees buried in the small print.
✗ A clunky checkout that adds steps and quietly loses sales.
Say you take 15,000 pounds a month in online sales. At 1.4 percent plus 20 pence per transaction across, say, 500 orders, you pay around 210 pounds in percentage fees plus 100 pounds in fixed fees, so about 310 pounds. A rival at 1.2 percent but with a 25 pound monthly fee and slower settlement might look cheaper on the headline rate yet cost about the same once everything is counted, while tying up your cash for longer. This is why the whole package, not the advertised percentage, is what matters.
A cheaper gateway that harms your conversion rate is not cheaper at all. A smooth, trusted checkout that supports wallets and settles quickly often earns back a slightly higher fee many times over in completed sales and healthier cash flow.
The most common mistake online is choosing on the advertised rate alone and discovering the real cost later, once monthly fees and card mix are counted. Others include forgetting to test the checkout on a phone, where most customers now buy, ignoring settlement speed until a cash flow squeeze hits, and picking a gateway that does not integrate cleanly with your ecommerce platform, which leaves you patching things together. Take a little time to test the full customer journey, from product to payment confirmation, on both desktop and mobile before you commit. A checkout that works flawlessly and settles quickly is worth more than a fractionally lower fee, because it protects the sales you have worked hard to win.
The gateway captures the payment on your website, while the processor moves it through the card networks. Many providers bundle both, plus a merchant account, into one service.
Card not present transactions carry more fraud risk, so they usually attract slightly higher fees than chip and PIN or contactless payments taken in person.
It is strongly advisable. Wallets are projected to make up more than half of online payments, and offering them reduces checkout friction and lost sales.
Settlement varies by provider, from the next working day to several days. Check this before you commit, as your cash flow depends on it.
Yes, if you use a reputable gateway. It handles card data on its own secure systems and takes on most of the PCI compliance burden, so sensitive data does not touch your servers.