In this article, we break down the three categories of Stripe fees in the UK for small businesses.
We will also explain exactly how Stripe payment processing works and why it’s worth considering instead of obtaining merchant accounts directly.
Of course, if you’re looking for alternative business banking options, you can access our other free articles right now. These include options for banking offshore, non-resident UK companies, and country-specific banking options like Malta business bank account opening.
Feel free to use the table of contents to jump ahead to the sections most relevant to you.
Table of Contents
- Stripe Fees UK
- What Is Stripe?
- How Does Stripe Credit Card Processing Work?
- Frequently Asked Questions
- Do You Want Help Opening Bank Accounts?
Stripe Fees UK
Stripe payment processing fees in the UK include a per-transaction percentage and a flat fee. The flat fee is 20p per transaction while the percentage fee ranges between 1.2% and 2.9%.
The percentage difference depends on the country where the credit card is issued and if the card is connected through applicable networks.
Stripe Processing Fees
Here is a closer look at the fees levied by Stripe in the United Kingdom:
1. UK-issued credit cards using Link
1.2% + 20p per transaction
2. UK-issued credit cards
1.4% + 20p per transaction (+1.1% for European Economic Area)
3. International credit cards
2.9% + 20p per transaction
Other Stripe Charge Fees
Stripe also charges additional fees in the UK that prospective customers should be aware of. For example, fees apply when alternative currencies are used for payouts and when fraud monitoring or alerts are triggered by Stripe’s Radar rules.
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What Is Stripe?
Stripe is one of the most widely used payment processors for online businesses. Acting as a merchant, Stripe enables small businesses to quickly access payment processing services by opening sub-merchant accounts as Stripe customers. While Stripe charges fees in the UK for this service, they allow businesses to avoid the long, tedious, and costly process of establishing merchant relationships directly with acquiring banks.
How Does Stripe Credit Card Processing Work?
The following steps detail how Stripe payment processing works for online merchants after a customer begins the checkout process:
- Customer is asked to insert their credit card and personal information. The requested information can slightly vary between merchants, but in general, it includes the customer’s name, credit card number, card verification value (CVV code), expiration date, and billing address.
- The merchant’s gateway (Stripe or another provider), then sends the data to the acquirer to process the transaction. This involves the acquiring bank, the credit card network (Visa or Mastercard), and the cardholder’s issuing bank which ultimately approves or denies the purchase.
- The approval or denial is then sent back following the same path of communication to the end client via the merchant’s website.
In short, Stripe greatly simplifies a complex process that involves multiple layers and institutions, enabling fast and effective merchant services for business owners. With this in mind, most businesses view the Stripe fees in the UK as a small cost of doing business.
Frequently Asked Questions
Below are three of the most common questions that we receive from business owners looking to understand Stripe fees in the UK. If you have further questions you would like answered, don’t hesitate to get in touch with us directly.
What Is the Stripe Fee in the United Kingdom?
The Stripe fee in the United Kingdom consists of a per-transaction percentage and a flat fee. Depending on where the customer’s credit card is issued, the percentage can range between 1.2% and 2.9% while the flat fee is 20p per transaction. With this in mind, if you plan on receiving the majority of your payments from customers outside the United Kingdom, you may find lower-cost alternatives available elsewhere.
Is Stripe Cheaper Than PayPal?
To determine if Stripe is cheaper than PayPal in the UK, you need to consider several variables. The most important variable to consider is where the credit cards you are processing are issued. This is because both Stripe and PayPal apply different percentages and flat fees to UK credit cards, EEA credit cards, and international credit cards.
Is Stripe or PayPal Better UK?
Whether Stripe or PayPal is better in the UK will depend on your specific objectives, desired functionality, and the fees you are willing to pay. Additionally, consideration should be given to where your customer’s credit cards are issued to determine which option offers the best pricing for your business.
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