Enabling your business to accept payments in the UK creates the opportunity to grow your customer base in one of the top European markets for online shopping. Ecommerce revenue in the UK is expected to exceed £141 billion by 2029, representing the many possibilities for business growth. Businesses and customers in the UK have spent recent years grappling with new and shifting factors, including transformed payment experiences, rigid payment security measures, and faster-than-ever international transactions.

Below, we’ll explore how foreign businesses can participate in the UK payment system by:

• Implementing security measures
  
• Incorporating contactless payments
  
• Simplifying international transactions
  

The state of the market

In the UK, where the primary currency is the British pound (GBP), common payment options include traditional and modern methods. Although cash is still used, digital payment methods are more popular and continue to gain traction. Widespread smartphone use has accelerated the adoption of mobile wallets like Apple Pay and Google Pay, which facilitate quick, touchless transactions while maintaining digital purchase records.

Regulatory environment

Multiple agencies supervise and regulate financial activities within the UK. Familiarity with the local regulations and supervisory bodies will help make an expansion into the UK as smooth as possible. Among these institutions are the Bank of England, the Financial Conduct Authority (FCA), and His Majesty’s Treasury (HMT). These agencies establish rules and guidelines to promote transparency and data protection, including mandates for Anti-Money Laundering (AML) and Know Your Customer (KYC) procedures.

There’s also Pay.UK, the recognized operator and standards body for the UK's retail interbank payment systems. It oversees the infrastructure that underpins everyday payments, including Bacs (used for direct debits and credits), Faster Payments, the Image Clearing System (used for checks), and services such as the Current Account Switch Service (CASS) and Confirmation of Payee. While Pay.UK is an industry body rather than a statutory regulator, it operates under the oversight of the Payment Systems Regulator (PSR) and works closely with the Bank of England and HMT. This makes it a key part of the governance environment for UK payments.

Payment methods

Payment preferences vary across the UK, constantly developing as payment trends shift with new technological advances.

Current usage

In 2024, more than 94% of all eligible in-store transactions were contactless. Users are drawn to contactless payments because of factors such as fast transaction times, ease of use, and integration with digital wallets. In that same year, 57% of UK adults were registered for mobile wallets, an increase from 42% in 2023. Debit cards remain the most popular payment method in the UK overall.

Leading contactless payment methods include digital wallets and contactless cards. Apple Pay, Google Pay, and PayPal dominate the UK digital wallet sector. Apple Pay is the most popular, with 63% of UK customers using it, followed by Google Pay (37%), then PayPal (36%). Samsung Pay and other bank-native wallets (e.g., those offered by Barclays and HSBC) also have a presence, but they have smaller user bases. Contactless cards and digital wallets use near-field communication (NFC) technology, which lets customers make credit or debit card payments by bringing their physical cards or mobile devices close to a point-of-sale (POS) terminal.

Mobile payments continue to grow, with adoption increasing among smaller businesses and freelancers thanks to the minimal setup requirements. Strong Customer Authentication (SCA)—mandatory in the UK since March 2022—has also reshaped the payment experience, requiring two-factor verification for most online transactions. Rather than add friction, SCA has accelerated adoption of smoother authentication methods: biometric verification (fingerprint or facial recognition), banking app confirmations, and, increasingly, passkeys, which combine device possession with biometrics to satisfy SCA requirements in a single tap.

Open banking and account-to-account (A2A) payments represent a significant shift in UK payments in recent years. The amount of open banking payments reached 351.0 million in 2025, a 57% year-on-year increase, and user connections reached 16.5 million by December 2025. These payment flows bypass card networks entirely, moving funds directly between bank accounts in real time via the Faster Payments Service (FPS). For businesses, A2A payments offer lower transaction costs and instant settlement; for customers, they enable frictionless checkout experiences without requiring manual card entry.

Popular B2C payment methods in the UK

• Contactless credit and debit cards
  
• Digital wallets (e.g., Apple Pay)
  
• Bank transfers
  
• Direct debits (e.g., Bacs)
  
• Cash
  
• Checks
  
• Prepaid cards
  
• Gift cards
  
• Peer-to-peer payment apps
  

Popular B2B payment methods in the UK

• Credit cards
  
• Bank transfers
  
• Direct debits (e.g., Bacs)
  
• Checks
  
• Real-time payments
  
• Virtual cards
  
• Invoice-based payments
  

A note on payments infrastructure

Many of the payment methods above—particularly bank transfers and real-time payments—run on FPS, operated by Pay.UK. FPS enables nearly instant bank-to-bank transfers, which typically settle within seconds at all hours. It underpins everything from online banking payments for customers to business payroll and supplier transfers.

Businesses that are entering the UK market will interact with FPS either directly (as a scheme participant) or indirectly through their payments service providers. The UK's longer-term infrastructure modernization, previously known as the New Payments Architecture, has been restructured and is now being delivered under the Interbank Infrastructure Renewal (IIR) program, although this is in its early stages.

Emerging trends

Technology and fintech improvement continue to reshape how money moves in the UK, and several developments signal what the next phase of the market could look like for businesses that enter it today.

Cryptocurrency's role in UK payments has matured since the early 2020s. Early interest in crypto assets has since shifted towards a more specific use case: stablecoins. Unlike volatile cryptocurrencies, stablecoins are being explored for everyday payments and cross-border settlement.

In November 2025, the Bank of England published a landmark consultation that proposes a new regulatory framework for sterling-denominated systemic stablecoins, covering both retail payments and wholesale settlement use cases. For businesses, this signals that stablecoins are moving from speculative assets to regulated payment instruments that are worth monitoring closely as the framework takes shape.

The future of payments in the UK broadly trends towards a more open, real-time, and programmable infrastructure. Variable recurring payments, which allow authorized third parties to initiate recurring payments directly from a customer's bank account with defined limits, are gaining traction as a more flexible alternative to direct debit. Combined with continued investment in Faster Payments and the developing IIR program, the UK is building towards a faster, more competitive, and increasingly account-centric payment environment.

Ease and friction of entry

Expanding your business into the UK isn’t all that different from expanding into other developed markets, but it’s complicated by the fact that the UK is no longer a part of the EU. Here are a few factors to keep in mind (although this isn’t a full guide).

Taxes

Running a business comes with multiple financial obligations, including national and local taxes. Income and corporate taxes are primary considerations at the national level. Business rates—a type of tax levied on business properties—are sometimes referred to as “nondomestic rates,” and they can apply depending on the location and size of the business. Value-added tax (VAT) is another consideration and the standard VAT rate is 20%.

Chargebacks and disputes

Although the UK doesn’t have a central body that regulates chargebacks specifically, general customer protection laws are in effect. The Consumer Credit Act and other UK-specific laws offer guidance for the dispute process and set forth corrective measures for chargeback management. Any type of chargeback can be financially burdensome for a business, affecting more than just immediate revenue. Experiencing too many chargebacks too frequently can lead to bank fees and the potential termination of your merchant account.

International payments

Your business might process in-person, cross-border purchases from tourists or online purchases from customers abroad. Here are some key aspects of accepting international payments in the UK to consider:

• SEPA transfers
  Although the UK is no longer a member of the EU, it still belongs to the Single Euro Payments Area (SEPA). SEPA enables fast credit transfers between the 41 member countries.

• Currency conversion
  Currency conversion remains a key concern for UK businesses involved in international trade. Like the US, the UK uses floating exchange rates. That means the value of currency changes based on market forces such as supply and demand. Businesses have multiple options for handling currency conversion, such as traditional banks, online platforms, and foreign exchange brokers.

• Platforms from emerging markets
  Payment methods vary by market, meaning businesses must stay flexible and adapt. If you expect to attract customers from other countries when they visit the UK, it can be helpful to accept popular payment methods from emerging markets (e.g., WeChat Pay, Alipay) to make the checkout process as easy as possible.

Security and privacy

In the UK, businesses in all sectors must focus on security, compliance, and regulatory factors. This is particularly important for payment systems in which the following aspects are intricate and have significant implications:

• Data protection laws
  Local laws on data protection and privacy, such as the Data Protection Act, are stringent and compliance is mandatory. Further initiatives are in progress to strengthen data protection measures, including a proposed bill that ensures the UK’s data laws are on par with the EU’s. Depending on the scope of the business, compliance with international laws such as the EU’s General Data Protection Regulation (GDPR) might also be necessary.

• AML
  AML consists of a set of laws, regulations, and procedures designed to prevent criminals from disguising illegally obtained funds as legitimate income. Like businesses in the United States, businesses in the UK are required to do their due diligence by verifying the identities of their customers and keeping detailed transaction records.

• Fraud prevention technologies
  To mitigate the risk of fraudulent activities, businesses can employ fraud detection systems that monitor incoming and outgoing online traffic. Automated systems scrutinize user behavior to flag unusual activities, and transaction monitoring algorithms scan for odd payment activities such as multiple failed attempts within a short time frame.

Key success factors

The challenges of operating in the UK range from payment security concerns to international payment complexities. So success in this market requires a versatile strategy. Here’s how businesses can improve the customer payment experience in the UK:

• Diverse payment methods
  Because credit and debit cards are popular in the UK, businesses can benefit by accepting these forms of payment—especially those that use Europay, Mastercard, and Visa (EMV) chips or contactless technology. Accepting popular digital wallets like Apple Pay and Google Pay can offer customers additional convenience.

• Reinforced security measures
  Extra layers of security, such as two-factor authentication, can minimize fraudulent activity. Real-time analytics can also benefit businesses by identifying and stopping suspicious transactions before they become a major issue.

• Mobile adaptability
  Many customers prefer to shop and pay on their mobile devices so businesses should create a mobile-friendly payment gateway. Businesses that have their own mobile apps should also allow payments directly within the app to simplify transactions.

• Simplified checkout experience
  Offering a guest checkout option can speed up the checkout process, and a payment page with clear, easy-to-follow steps can simplify the payment process.

• Convenient international payments
  Displaying prices in different local currencies can be a simple yet effective way to make shopping more convenient for international customers. And for B2B transactions, offering payment options that are customized to cross-border payments (e.g., SEPA transfers) can help create repeat customers.

Key takeaways

Accepting payments in the UK requires a well-rounded vision that meets customer expectations, mitigates fraud risks, and caters to international customers. Here are some tips to help your business thrive in the UK.

Implement strong security measures

• Verify customer identities
  Employ methods such as multifactor authentication to verify a customer’s identities via multiple means, such as a password and code sent to their email. This can help prevent unauthorized transactions and subsequent chargebacks.

• Protect customer data
  In addition to regulations outlined in the Data Protection Act, comply with the requirements of the Payment Card Industry Data Security Standard (PCI DSS).

• Mitigate fraud risk
  As ecommerce grows, so does the risk of card-not-present fraud—transactions where the card isn’t physically present. Use fraud detection tools such as 3D Secure authentication and machine learning algorithms for online purchases.

Incorporate contactless payments

• Go contactless in person and online
  Contactless cards are nearly ubiquitous in the UK, and digital wallets are gaining traction. Offering these options can improve convenience for customers.

• Think beyond traditional ecommerce
  Integrate a payment gateway that works well on mobile to capture customer segments that are shopping on their phones.

• Take advantage of added security
  Built-in security measures such as tokenization, a process that replaces sensitive data with a one-time code, provide added security for contactless payments and digital wallets.

Simplify international transactions

• Customize the checkout process to UK customers
  Translate payment pages and error messages into British English, display prices in pounds, and ensure transparency regarding currency conversion. For customers outside the UK, show prices in their local currencies.

• Accept SEPA transfers
  Accepting SEPA transfers enables cross-border payments from B2B customers across 35 other European countries, potentially opening up your business to new markets in continental Europe.

• Hedge for currency volatility
  Currency values can shift quickly based on geopolitical events, economic indicators, and market sentiment. It’s important to plan for currency volatility.

How Stripe Payments can help

Stripe Payments provides a unified, global payment solution that helps any business—from scaling startups to global enterprises—accept payments online, in person, and around the world.

Stripe Payments can help you:

• Optimize your checkout experience: Create a frictionless customer experience and save thousands of engineering hours with prebuilt payment UIs, access to 125+ payment methods, and Link, a wallet built by Stripe.

• Expand to new markets faster: Reach customers worldwide and reduce the complexity and cost of multicurrency management with cross-border payment options, available in 195 countries across 135+ currencies.

• Unify payments in person and online: Build a unified commerce experience across online and in-person channels to personalize interactions, reward loyalty, and grow revenue.

• Improve payment performance: Increase revenue with a range of customizable, easy-to-configure payment tools, including no-code fraud protection and advanced capabilities to improve authorization rates.

• Move faster with a flexible, reliable platform for growth: Build on a platform designed to scale with you, with 99.999% historical uptime and industry-leading reliability.

Learn more about how Stripe Payments can power your online and in-person payments, or get started today.