Top Online Payment Methods in the UK: A Guide for Businesses in 2025

In the UK, online payments are shaped by convenience, trust and habit. Debit cards are the most popular method, used by 69% of consumers, followed by direct debit at 58%. As digital transactions grow, businesses must align with consumer preferences to maximise conversions, reduce costs and improve checkout experiences.

For businesses expanding into the UK, offering the right mix of payment options can provide a competitive edge. With e-commerce penetration expected to hit 97.25% by 2029, optimising payment systems is essential.

In this article, we view the top online payment methods in the UK and show why open banking is set to be the next big shift in digital transactions.

Top Online Payment Methods in the UK

Choosing the right payment methods is key to increasing conversions, reducing costs and providing a seamless checkout experience. Here’s a look at the most popular ways people in the UK prefer to pay:

1. Debit and Credit Cards

Card payments remain the top choice in the UK, with debit cards making up nearly half of all transactions. In October 2024, UK cardholders made 2.3 billion debit card transactions, spending £67.4 billion, largely driven by the ease of contactless payments.

Credit cards also play a key role, with 385.6 million transactions and £21.1 billion in spending that month.

Credit and debit cards are the most widely accepted payment method, offering a familiar and reliable way to pay for anything – from daily purchases to larger expenses. With broad merchant acceptance and instant customer recognition, they continue to be a key part of UK online payments.

2. Direct Debit

Direct Debit powers 58% of online transactions in the UK as of December 2024, making it the second most used payment method after debit cards. It’s a preferred choice for subscriptions, utilities and memberships, offering businesses predictable, automated payments without relying on card networks.

Bacs payments, while taking three business days to process, remain popular for recurring transactions like subscriptions and utility bills. Their predictable processing schedule helps businesses manage cash flow efficiently, especially for high-volume payments. To improve collection success, many organisations implement automated retries and proactive customer communication alongside Bacs processing.

3. Digital Wallets

With mobile shopping on the rise, digital wallets offer a seamless way to pay—just tap or scan, no card details needed. In the UK, Apple Pay leads contactless payments with 63% adoption, followed by Google Pay (37%) and PayPal (36%) as of December 2024.

Why consumers prefer digital wallets:

• Faster and more secure than traditional card payments
• Supports biometric authentication (fingerprint or face ID)
• Eliminates the hassle of entering card details at checkout

Beyond payments, digital wallets are increasingly used for public transport, identity verification and banking transactions, making them a staple of daily life.

4. Buy Now, Pay Later

Buy Now, Pay Later (BNPL) is reshaping UK payments, allowing consumers to split purchases into instalments without traditional credit checks. By 2025, 42% of UK adults will have used BNPL, and 60% of e-commerce retailers will offer it. With the market set to reach £47.27 billion by 2029, BNPL is becoming a standard payment option.

BNPL helps businesses increase order values and improve conversions, but it must be implemented responsibly. New regulations enforce affordability checks and transparent payment structures to prevent consumer debt issues. Merchants offering BNPL should clearly outline payment terms and total costs, ensuring customers fully understand their commitments.

5. Bank Transfers

Bank transfers are a widely used online payment method in the UK, offering speed, security and lower transaction costs compared to card payments. With Faster Payments System – transactions between UK bank accounts are now almost instant, making bank transfers a reliable option for businesses and consumers alike.

Why businesses and consumers prefer bank transfers:

• Instant and reliable for quick transactions
• Lower fees than card payments
• Stronger security with direct account transfers
• Ideal for invoices, subscriptions and large purchases

6. Cryptocurrencies

In February 2024, 24% of UK businesses accepted cryptocurrency payments for e-commerce, up from 18% in February 2022—a clear sign that adoption is growing.

While it’s not yet a dominant payment method, improved payment processing and user-friendly digital wallets are making crypto more accessible. As infrastructure advances, more merchants are beginning to integrate it into their payment options.

7. Open Banking

Open banking is transforming how payments are made online in the UK by enabling direct, bank-to-bank transactions. This method cuts out the middlemen — no need for cards or digital wallets — and streamlines the process to be quicker and more secure, while also keeping costs down.

The shift to open banking is well underway, with 75% of UK businesses already benefiting from lower fees and stronger security. With adoption accelerating, open banking is shaping up to be the future of business transactions.

Why Open Banking is the Future of Online Payments in the UK

With open banking, payments move from fragmented, multi-step processes to seamless, direct transactions. This transformation leads to faster settlements, reduced fraud risks and lower processing costs—advantages that are making open banking the preferred choice for businesses.

The comparative table below illustrates why businesses are increasingly choosing open banking over traditional methods:

How Open Banking Outperforms Traditional Payment Methods

How to Choose the Best UK Online Payment Solution for Your Business

Choosing the right payment solution depends on your business needs, transaction volume and customer expectations. The ideal system should balance cost-efficiency, transaction speed, and security while ensuring a smooth experience for both businesses and customers.

Open Banking with Noda: A Smarter Way to Accept Payments

Designed for scalability, Noda  is integrated with 2,000 banks across 28 countries, supporting multiple currencies for businesses expanding in the UK and globally. Regulated under PSD2, it ensures every transaction meets the highest compliance and security standards. Its advanced Open Banking API and seamless e-commerce integration make it easy for businesses to optimise payments, streamline operations, and enhance the customer experience.

Businesses adopting open banking need a provider that ensures direct and secure bank connections. Noda’s infrastructure integrates with 2,000 banks across 28 countries, offering instant multi-currency payments while meeting PSD2 regulatory standards for security and compliance.

Key Features for Businesses:

• Seamless Direct Bank Payments – Accept instant bank-to-bank payments across the UK and Europe, reducing reliance on card networks.
• Multi-Currency Support – Enable cross-border transactions with support for multiple currencies, making international trade more efficient.
• Unified API Integration – Connect to all supported banks with a single API, simplifying payment processing and reducing development time.
• PSD2-Compliant Security – Ensure all transactions meet strict European security and authentication standards, providing.

Future-proof your payments with Noda’s. Lower costs, better security and instant bank transfers – all in one simple integration.