Navigating the landscape of payment options is crucial for small businesses in the UK to ensure smooth operations and customer satisfaction. With the variety of payment methods available, it’s essential to understand the advantages and drawbacks of each to make informed decisions. This article will explore various payment options suitable for small businesses in the UK, including traditional methods, digital solutions, and the role of GoCardless in simplifying payments.

Traditional Payment Methods

Cash Payments

Despite the increasing popularity of digital payments, cash remains a viable option for many small businesses. It’s straightforward, incurs no transaction fees, and provides immediate access to funds. However, managing cash involves risks like theft and human error. Additionally, with the shift towards a cashless society, fewer customers carry cash, potentially limiting sales.


Cheques are another traditional method, though their use has significantly declined. They offer a paper trail and can be useful for business-to-business transactions. However, cheques can take several days to clear, and the process of depositing them can be time-consuming. For these reasons, cheques are less favored in today’s fast-paced business environment.

Card Payments

Credit and Debit Cards

Accepting credit and debit cards is essential for most small businesses. These payments are convenient for customers and can increase sales. To accept card payments, businesses need a merchant account and a card reader. The main costs involved are transaction fees, which vary depending on the provider. Additionally, businesses must ensure compliance with PCI DSS (Payment Card Industry Data Security Standard) to protect customer data.

Contactless Payments

Contactless payments, including those made via Near Field Communication (NFC) technology, have gained popularity due to their convenience. Customers can pay quickly by tapping their card or mobile device on a card reader. This method is not only fast but also reduces physical contact, which became particularly important during the COVID-19 pandemic. However, businesses need to invest in compatible card readers and stay updated with the technology.

Digital Payment Solutions

Mobile Payments

Mobile payment options such as Apple Pay, Google Pay, and Samsung Pay allow customers to pay using their smartphones. These methods are secure, leveraging biometric authentication and encryption. For businesses, accepting mobile payments can attract tech-savvy customers and streamline the checkout process. However, it requires a compatible payment terminal and may involve additional fees.

Online Payments

For businesses with an online presence, offering online payment options is crucial. Solutions like PayPal, Stripe, and Square provide seamless integration with e-commerce platforms, allowing customers to pay using various methods, including credit cards, debit cards, and digital wallets. These platforms often charge transaction fees, but they offer robust security features and ease of use.

Bank Transfers

Bank transfers are a straightforward method for receiving payments, especially for larger transactions. They are secure and typically have low fees. However, the main drawback is the time it takes for funds to clear, which can be several days. This delay can impact cash flow, making it less ideal for businesses that require immediate access to funds.

GoCardless: Simplifying Recurring Payments

What is GoCardless?

GoCardless is a UK-based payment service provider that specializes in Direct Debit payments. It offers a streamlined solution for businesses that need to collect recurring payments, such as subscriptions, memberships, and instalments. By automating payment collection, GoCardless helps businesses reduce administrative burdens and improve cash flow management.

Benefits of GoCardless

  1. Automation: GoCardless automates the payment collection process, reducing manual effort and minimizing the risk of missed payments.
  2. Cost-Effective: The platform charges lower fees compared to traditional card processors, making it a cost-effective solution for businesses.
  3. Flexibility: GoCardless supports various payment schedules, from weekly to yearly, providing flexibility to meet different business needs.
  4. Integration: It integrates with popular accounting and invoicing software like Xero, QuickBooks, and Sage, streamlining financial management.
  5. Security: GoCardless complies with stringent security standards, ensuring that customer data is protected.

Use Cases for GoCardless

  • Subscription Services: Businesses offering subscription-based products or services can benefit from the automated, recurring payment feature of GoCardless.
  • Membership Organizations: Clubs and associations can use GoCardless to manage membership fees effortlessly.
  • Invoice Payments: For businesses issuing regular invoices, GoCardless can automate the collection process, ensuring timely payments.

How to Get Started with GoCardless

  1. Sign Up: Create an account on the GoCardless website.
  2. Set Up: Configure your payment schedules and integrate with your existing software.
  3. Invite Customers: Send payment requests to your customers via email or integrate the payment option into your website.
  4. Collect Payments: Once customers authorize the Direct Debit, GoCardless will handle the rest, collecting payments as per the agreed schedule.

Alternative Digital Payment Platforms


PayPal is a widely recognized digital payment platform that offers flexibility for both online and in-person transactions. It supports multiple currencies and provides buyer and seller protection. However, PayPal’s transaction fees can be higher than other methods, which might impact profit margins for small businesses.


Stripe is known for its robust API, allowing businesses to customize their payment processes. It supports a wide range of payment methods, including credit cards, digital wallets, and bank transfers. Stripe also offers advanced fraud detection tools, but its complexity might require technical expertise to set up and manage.


Square offers a comprehensive suite of payment solutions, including point-of-sale systems, online payments, and invoicing. It’s user-friendly and integrates well with other business tools. Square’s transparent pricing model with no monthly fees makes it attractive for small businesses. However, it might not offer as many advanced features as Stripe.


Choosing the right payment options is vital for the success of small businesses in the UK. While traditional methods like cash and cheques still have their place, digital solutions provide convenience, security, and efficiency. Card payments, mobile payments, and online payment platforms cater to the needs of modern consumers, ensuring a smooth transaction process.

GoCardless stands out as an excellent solution for businesses that rely on recurring payments. Its automation, cost-effectiveness, and seamless integration with other tools make it a valuable addition to any small business’s payment strategy. By understanding and leveraging the various payment options available, small businesses can enhance their cash flow, reduce administrative burdens, and ultimately, provide a better experience for their customers.

For a limited time (ends 26th June 2024) you could get £200 for signing up to GoCardless