What is the Best Payment Gateway for Digital Products?

Please note that the information about the companies in this article was sourced from their respective websites as of June 2025. This information may be subject to change.

People who buy digital products such as online courses, eBooks, or templates expect to get what they paid for straight away. If your checkout feels slow, complicated, or too expensive, you could lose the sale on the spot.

In the UK, more than a quarter of all shopping now happens online. That’s a huge market, but most payment systems were built for physical goods, not instant downloads. This often means higher fees, slower payouts, and payment tools that just don’t fit how digital businesses run.

This guide walks you through the best payment processor for digital products and shows you how newer platforms like Noda make it easier to get paid quickly and keep more of your money.

What Is A Payment Gateway?

A payment gateway is the tool that connects your website to the banking system. It handles the full payment process when someone buys your digital product.

Here’s what happens:

• The customer enters their payment details at checkout
• The gateway securely processes the payment
• The customer’s bank checks and approves the transaction
• The gateway confirms the payment and starts the product delivery
• The money lands in your account, usually within one to three business days

A good gateway also takes care of security, fraud checks, and compliance—important things to have in place, especially when you’re selling digital products, which are often targeted by fraud.

Read: What Is a Payment Gateway?

Types of payment methods for digital products

People buying digital products use a range of payment methods, depending on the type of product, its price, and what they’re used to. Here are the main options:

Card payments

Debit and credit cards are still widely used, especially for higher-priced digital products. Customers enter their card details at checkout, and the payment is processed through a digital goods payment processor like Stripe, Adyen or others. These are familiar to customers, but often come with higher fees and slower payout times.

Digital wallets

Options like PayPal, Apple Pay, and Google Pay are popular for their speed and convenience. Customers can pay with one click using saved details. Digital wallets now account for nearly half of global online purchases, which makes them a useful option to have at checkout.

Bank-to-bank payments

Also known as account-to-account payments, these let customers pay directly from their bank using tools like open banking or direct debits.

For businesses selling downloads or subscriptions, this type of digital goods payment service is usually faster and cheaper than cards. Plus, there’s no risk of card expiry or chargebacks.

Read: Open Banking Payment Initiation Explained

Top Payment Gateways For Digital Products

We’ve reviewed several popular platforms used for digital goods payment processing. Each has its own strengths depending on your needs:

Noda

Noda uses Open Banking to allow customers to pay directly from their bank accounts through their banking app, without needing a card.

This setup works well for businesses that want to reduce payment costs, speed up settlement times, and avoid chargebacks. It’s especially useful for those selling in the UK or EU, handling a high volume of transactions, or offering low-cost digital products where card fees would otherwise take a bigger cut.

Noda charges from 0.1% per transaction and supports instant payments. It also offers a mobile-friendly checkout experience, which works well for customers paying on their phones. Integration is straightforward through API or with platforms like WooCommerce, OpenCart, Magento, and PrestaShop. Businesses can also send payment links by email for custom orders or manual payments.

Stripe

Stripe is one of the most flexible digital goods payment processors out there. It’s packed with developer features, supports over 135 currencies (and various alternative payment methods globally), and works well for global sales and subscription products.

If you’ve got the technical resources to set it up, Stripe gives you lots of freedom. But for small-ticket digital sales, the fees can eat into your profit, especially once you add on foreign exchange or platform costs.

In the UK, card payments are charged at 1.5% plus 20p for domestic cards, with higher fees for international transactions and currency conversions.

PayPal

PayPal is one of the most widely recognised payment options worldwide, which makes it useful for building trust and improving conversion rates, especially with international customers or buyers who prefer familiar methods.

It has over 400 million active users globally, and customers can pay using their PayPal balance, a linked bank account, or saved cards.

While it's easy to set up and well-known, PayPal’s fees are on the higher side. For UK transactions, the fees start from 1.2% + fixed fee. However, for international payments, the total cost is much higher. Cross-border transactions can include extra charges of up to 3%, and currency conversion fees typically range from 3% above the base exchange rate. These additional costs quickly eat into your profit, especially if you sell globally or at high volume.

PayPal also isn’t very user-friendly for sellers looking to control the checkout experience. Its interface is difficult to customise, which can make it feel disconnected from your brand and less smooth for customers.

Read more on PayPal fees here: PayPal Fees for Merchants: Full Breakdown & Alternatives

Paddle

Paddle works as a merchant of record, which means it takes care of tax compliance, payment processing, and customer support on your behalf. This can be helpful for digital businesses that want to spend less time on admin and more time on building their products.

It handles VAT rules for different countries, supports customers in multiple languages, and includes tools for managing subscriptions. The downside is the cost—fees are typically 5% plus $0.50 per transaction—and you have less direct control over payment methods, partners and integrations.

Paddle supports merchants in over 200 markets; however, their platform is heavily geared toward USD-based pricing and reporting.

GoCardless

GoCardless specialises in bank-to-bank payments through Direct Debit, making it a strong option for digital products sold on a subscription basis. Payments are pulled directly from the customer’s bank account, which helps reduce failures due to expired cards and provides more predictable cash flow.

It generally costs less than card-based subscriptions and avoids common issues like chargebacks or card expiry. GoCardless also supports one-off payments through Direct Debit and Instant Bank Pay, allowing customers to make a single payment directly from their bank. However, settlement times are typically longer than instant payment methods like Open Banking, which means you may wait a bit longer to receive the funds.

GoCardless is popular in the UK and Europe, and also supports merchants in the US, Canada, Australia, and New Zealand.

How to choose the right payment gateway

Your ideal digital products payment gateway depends on your business model. The best payment system depends on what you sell, how much it costs, and how your customers prefer to pay.

If you make a large number of sales, keeping your transaction costs low makes a big difference. If you sell less frequently, it might be more important to pick something simple and trusted. In the UK, more people are now using mobile banking to pay, while international customers may still prefer cards or PayPal.

It’s worth looking at the full picture—not just the transaction fee, but things like setup costs, monthly charges, how fast you get paid, and how much protection you have if something goes wrong. Many sellers use a mix of systems: for example, Noda open banking for most payments, and other familiar options like card payments or PayPal, for customers who prefer it.

Take control of your payment costs with Noda

If you sell digital products and want to cut down on fees while giving customers a smoother experience, Noda is a smart alternative to traditional payment gateways. It uses Open Banking to process instant bank payments, helping you get paid faster and spend less on every transaction.

With fees starting from just 0.1% per payment, Noda is ideal for both low-cost, high-volume sales and higher-value products. You get fast, secure payments with no card fees, no chargebacks, and no complicated setup.

With Noda, you benefit from:

• Lower costs – Keep more of your revenue with low transaction fees
• Instant payments – Money arrives directly into your bank account
• No chargebacks – Bank-authenticated payments reduce the risk of disputes
• Mobile-friendly checkout – Works seamlessly through your customer’s banking app
• Easy setup – Integrates via API or with WooCommerce, PrestaShop, Magento and OpenCart platforms
• Flexible payment links – Great for sending invoices or taking custom orders
• Personal account manager – Get one-to-one support to help you set up and grow confidently with open banking

Whether you're selling stock photos, downloadable software, or other digital tools, Noda helps you reduce costs and improve the way your customers pay.

Ready to see what you could save? Try Noda and join the growing number of UK businesses using smarter, faster payments.

Book a demo with our team today!