WooCommerce Payment Gateway Fees Comparison UK 2026

Payment gateway fees are the transaction costs charged by providers like Stripe, PayPal, and Square when you accept card payments on WooCommerce. This guide compares these fees for UK merchants in 2026, helping you choose a cost-effective solution for your online store.

• Stripe's standard UK pricing is typically 1.5% plus 20p per transaction for online card payments.
• PayPal's fixed fee for UK transactions is typically between 20p and 30p.
• Currency conversion fees can add 1–3% to the cost of an international sale.

For more, see our UK small business hosting costs page.

What Are Payment Gateway Fees on WooCommerce?

Payment gateway fees are per-transaction charges that include a percentage, a fixed fee, and often additional costs for refunds or currency conversion.

Payment gateway fees are the costs you pay every time a customer checks out on your WooCommerce store. In the UK, these fees typically include a percentage of the transaction value plus a fixed amount in pence. Providers also charge for subscriptions, chargebacks, and currency conversion, so the advertised rate is never the full picture.

Understanding these fees is essential because they directly reduce your profit margin. With the right comparison, you can find a gateway that balances cost with customer experience. This guide focuses on the UK market in 2026, where competition among providers has led to new pricing structures.

In 2026, many UK stores also see charges for payment authorisation and settlement. Some gateways call these 'processing fees' while others hide them in the exchange rate. Always request a full fee schedule before signing up, and ask for a sample statement showing fees on a typical transaction.

Stripe vs PayPal vs Square: UK Fee Structures in 2026

Stripe, PayPal, and Square have different fee structures for UK stores, with Stripe typically offering a lower percentage but similar fixed fees.

Stripe is a popular choice for UK WooCommerce stores. Its standard pricing is usually 1.5% plus 20p for online card payments. PayPal charges a similar rate, but its fixed fee varies by transaction type. Square often appeals to small businesses with a simple flat rate, though there are differences for manually entered cards.

When comparing, look beyond the headline percentage. Ask about fees for refunds, chargebacks, and international cards. These charges can add 1–2% to your effective cost, especially if you sell to customers outside the UK.

Another point is that some providers apply a different rate for European cards following Brexit. For example, a Visa debit card from France may cost more than a UK-issued card. Check whether the provider lists UK and EEA rates separately, as this can change your effective cost.

Monthly Subscriptions vs Pay-as-You-Go Pricing

Subscription plans can lower per-transaction fees for high-volume stores, while pay-as-you-go models suit smaller shops.

Some payment gateways, like Stripe and PayPal, have no monthly fee. You pay only when you make a sale. Others, such as Braintree or Sage Pay, may offer tiered plans that include a monthly subscription in exchange for lower transaction fees.

For a small UK shop, pay-as-you-go is usually simpler. But if your business processes hundreds of orders each month, a subscription plan could reduce costs significantly. Calculate your average monthly transaction volume to decide which model is cheaper.

You should also factor in the cost of payment reconciliation. Some gateways integrate tightly with accounting tools, saving you hours of manual work. That hidden value can offset a slightly higher transaction fee, so look at the whole package.

Hidden Fees and Currency Conversion Costs

Currency conversion, chargebacks, and cross-border card fees are hidden costs that can add 1–3% to your effective payment costs.

Currency conversion fees are a major hidden cost. If you sell to customers in Europe or the US, your gateway may convert the payment into GBP at a poor exchange rate, plus a conversion fee of 1–3%. Chargebacks also carry fees, usually £10–£20 per claim, even if you win.

Check your gateway’s policy on cross-border cards and refunds. Many providers charge the same percentage for international cards, but some add a “cross-border” fee. These costs are easy to miss until you review your monthly statements.

Some gateways offer fee caps for large transactions. For example, a wholesale store selling £1,000 orders might pay a capped fee of £25 instead of the usual 2.5%. Ask about volume discounts and caps before you commit to a provider.

How to Compare Offers Accurately

To compare offers accurately, you must calculate the total cost per transaction using your own sales data, not just the headline rate.

Start by creating a simple spreadsheet. List each gateway’s percentage rate, fixed fee, and any monthly charge. Then add your average order value and expected monthly transactions to estimate the real cost per 100 sales.

Don’t forget to include set-up costs and PCI compliance charges, which some UK providers bundle into their monthly plan. Also note the time it takes to receive funds, because delayed payouts can affect your cash flow.

Always compare the same card types. Some gateways charge a different rate for corporate cards or prepaid cards. Use your own historical data rather than generic examples, because the mix of cards used by your customers directly determines your total cost.

Just as you compare payment fees, review other business plugin costs to keep overheads down. A well-optimised stack can save more than the difference between gateways.

How to Choose the Right Gateway for Your UK Business

Choose a gateway that balances fees, customer experience, and features like Apple Pay support for your specific order values.

Choosing the right gateway starts with your average order value. If you sell high-priced items, a lower percentage fee matters more than a fixed fee. If you sell small items, the fixed charge can eat into your profit.

You should also consider your customers’ preferred payment methods. Some UK shoppers expect Apple Pay or Google Pay, while others use PayPal. Ensure your gateway supports popular wallets without extra setup costs.

Also think about the customer experience. A gateway with a clunky checkout can reduce conversion rates, costing you more than any fee difference. Look for a provider that offers a fast, seamless checkout on mobile devices, since most UK shoppers now buy on their phones.

Impact of Payment Gateway Fees on Profit Margins

Even a 1% difference in gateway fees can erase a significant chunk of profit on low-margin products, so fee reduction directly affects your bottom line.

If you sell products with a 20% margin, a 2% payment fee consumes 10% of that profit. For a £10 item with £2 profit, a 40p fee leaves you with £1.60. That might sound small, but across 1,000 orders it becomes £400 lost annually.

Fee reduction is one of the fastest ways to increase net profit without raising prices. By switching from a 2.9% gateway to a 1.5% one, you could save £14 per £1,000 of sales. Over a year, that adds up to a meaningful amount.

Track your effective fee rate each quarter. Divide total gateway charges by total sales volume. If the rate creeps above 2.5%, it is time to renegotiate or switch to a different provider.

Practical Ways to Reduce Payment Gateway Fees

You can reduce fees by negotiating custom rates, avoiding currency conversion, and regularly comparing providers.

Negotiate fees once your transaction volume grows. Providers like Stripe and PayPal offer custom pricing for high-volume merchants, but you must ask. Switching to a local UK bank-backed gateway can also reduce cross-border charges. Similarly, keeping your UK small business hosting costs low leaves more room for payment fees.

Another way is to avoid currency conversion by letting your customers pay in their own currency and using a multi-currency account. You can also encourage cheaper payment methods like bank transfers, but that may hurt conversion rates. Use A/B testing to find the right balance.

Finally, review your gateway fees every six months. The payment industry changes quickly, and new providers may offer better rates. Set a reminder to compare your current processor with at least two alternatives before your next annual contract renews. To manage orders efficiently, also explore WooCommerce order management plugins.