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Taking payments in the UK: a complete guide
Payments
12 min read
September 4, 2026

Taking payments in the UK: a complete guide

Adfin team
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Taking payments in the UK: a complete guide

In this article

  1. The methods you can accept
  2. Cards
  3. Direct debit
  4. Bank transfer and Faster Payments
  5. Open banking, or pay by bank
  6. Variable Recurring Payments
  7. What each method costs
  8. When the money lands
  9. What protection your customer has
  10. What each method does to your on-time rate
  11. Choosing between them
  12. Common questions

The short version

  • Interchange on a UK consumer debit card is capped at 0.2% of the transaction and on a consumer credit card at 0.3%. Commercial cards are outside the caps, so they cost you more.
  • Your card bill has three parts: interchange, the schemes' own fees, and your acquirer's margin. Only interchange is capped (Payment Systems Regulator).
  • Faster Payments runs day and night, all year, and once a payment has been sent it can't be cancelled (Pay.UK).
  • Bacs clears a direct debit over a three day cycle, so the money for an invoice due on the 1st reaches you a few days later.
  • Card payers get chargeback, and a credit card payer gets a second claim under section 75 on anything costing more than £100, on the FCA's own account. Bank transfer payers get neither.
  • Across Adfin, 72.7% of Apple Pay payments arrive on or before the due date, against 57.9% of bank transfers (Adfin platform data).

The methods you can accept

Five methods cover almost everything a UK business collects. You'll recognise all of them, but they behave very differently once you look past the checkout.

MethodWhat it isCost shapeWhen you get the moneyCardYour customer pushes payment from a card, in person or onlineA percentage of the amount, uncappedUsually a day or two after the paymentDirect debitYou pull the money from your customer's account under a mandate they signedPercentage plus a small fixed fee, usually cappedAround three days after collectionBank transferYour customer types your details into their banking appLittle or nothing per paymentNear instant, once they get round to itOpen bankingYour customer approves a pre-filled transfer inside their own banking appPer payment, priced by your providerNear instantVariable Recurring PaymentsA standing permission for repeat payments over open bankingPer payment, priced by your providerNear instant

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Cash and cheques still exist and nothing stops you taking either. The handling cost lands on your time instead of your merchant statement, and neither gives you a record that reconciles itself.

The split that decides most of what follows is who starts the payment. With a card link, a transfer or an open banking payment, your customer acts. With a direct debit or a VRP, you collect on a date you've already told them about. Everything about your cash position follows from which of those two you're relying on.

Cards

Cards are what most customers expect, and for a first sale to someone who has never bought from you they're hard to beat: your customer needs no relationship with you, no set-up and no advance notice.

What surprises people is that not all cards cost you the same. UK interchange, the slice that goes to the card issuer, is capped at 0.2% of the transaction on a consumer debit card and 0.3% on a consumer credit card. Those caps are live law and they hold the biggest single component of your card bill down.

Commercial cards are excluded from the scope of the caps altogether. So when a client pays your invoice on a company card, the interchange behind it isn't capped, and your cost on that payment is higher than on the identical payment from a personal debit card. You have no way of knowing which is coming until it arrives.

That difference is also why the law treats the two differently when you want to pass the cost on. Surcharging a consumer card is banned outright, and surcharging a commercial card is allowed as long as the fee doesn't exceed what that payment actually costs you. Our guide to payment surcharges works through what you're allowed to charge and how to calculate it without falling foul of the averaging rules.

Direct debit

A direct debit is "an instruction from a customer to their payment service provider authorising an organisation to collect varying amounts from their account, as long as the customer has been given advance notice of the collection amounts and dates". You hold a mandate, you tell your customer what's coming, and then you collect.

Two consequences follow from that definition. You can vary the amount, so a fee that changes or an annual increase needs no new authority from your customer. And notice is a condition of collecting rather than a courtesy, with the Direct Debit Guarantee setting it at "normally 10 working days" for any change of amount, date or frequency, "or as otherwise agreed".

Bacs clears each collection over three days, named input day, processing day and then entry day, and describes the whole process as taking "less than three days from start to finish". Your accounting will show that as a few days of lag against the due date, by design.

Direct debit suits anything recurring or contracted, and it's poorly suited to a first sale to a stranger, because the mandate takes time to put in place. Our full guide to direct debit covers mandates, advance notice and failed collections.

Bank transfer and Faster Payments

When your customer pays your invoice from their banking app, the payment usually goes over the Faster Payments System. Pay.UK describes it as facilitating "real-time payments of up to £1m", "available day and night, 365 days per year", and it has been running since 2008. In 2025 it carried 5.55 billion transactions worth £4.84 trillion.

The £1 million figure is the system ceiling and not your customer's limit. Pay.UK is explicit that "those organisations offering the service can set their own limits", and individual bank limits run from £5,000 up to £1,000,000. If you invoice large amounts, your customer's own app limit is the number that matters, and they may need to split the payment or use CHAPS.

Two things make bank transfer awkward as your main collection method. There's no protection for your customer if they send it to the wrong place, because "due to their real-time nature, once sent Faster Payments cannot be cancelled" (Pay.UK). And you're relying on your customer to type your details correctly. Confirmation of Payee helps there: it checks the name on the account against the name they've entered, and returns one of four answers. Our guide to Confirmation of Payee covers what it checks and what it doesn't.

Bacs and Faster Payments get confused constantly, since both move money between UK bank accounts. In practice Faster Payments is a push in seconds while Bacs runs as a batch cycle over three days, and there's a short answer piece in this set on the difference.

Open banking, or pay by bank

Open banking payments are the newer option, and they solve the typing problem. Open Banking Limited describes pay by bank as "a digitally initiated bank transfer embedded into checkout", where "a regulated Payment Initiation Service Provider (PISP) connects the retailer to your bank using secure open banking APIs".

Your customer taps a link, approves the payment in their own banking app, and the money moves over Faster Payments. The amount, your account details and the reference are pre-filled, so nothing depends on your customer copying them across. Pay.UK notes that "funds are usually available almost immediately, although they can sometimes take up to two hours".

The commercial difference from cards cuts both ways. There's no chargeback on an open banking payment, so no card-style reversal risk for you, and correspondingly less protection for the payer. Adoption is now substantial: Open Banking Limited reported over one billion cumulative open banking payments and 40.16 million payments in June 2026 alone, from 18.81 million user connections.

What you can't get is an independent view of what it costs against cards. No regulator, Pay.UK or Open Banking Limited figure compares the two, and the "cheaper than cards" claim you'll see is vendor marketing. Our guide to open banking for invoices goes further, and a separate piece covers choosing between open banking and direct debit.

Variable Recurring Payments

A VRP is a standing permission your customer gives once, letting you take repeat payments over open banking within limits they set. It looks like direct debit's faster cousin, and on one measure it genuinely is.

Open Banking Limited's own comparison puts the difference on control. A direct debit means you "have to contact payee or bank to cancel or amend" and "generally needs at least one days notice before payment is due to go out", while a VRP "can be cancelled or amended online right up to the point of irrevocable payment", with the value changeable within the agreed parameters up to that same point.

For most businesses reading this, though, commercial VRP isn't available yet for general invoice collection. The UK Payments Initiative scheme launched in June 2026, confirmed by the FCA, but the PSR's Wave 1 scope covers "utility payments, financial services payments, and payments to local and central government". Collecting your own fees by VRP is not in that list. Our guide to VRPs covers what has actually launched, what the timetable has slipped to, and where the published scope lists disagree.

What each method costs

Card pricing is the one worth understanding properly, because it's the only method where your cost rises without limit as your invoice gets bigger. What you pay your acquirer is the merchant service charge, and the Payment Systems Regulator describes it as comprising "interchange fees, scheme and processing fees and acquirer net revenue".

Only the first of those three is capped. The schemes' own fees are not, and the regulator has found them rising well ahead of inflation over the past five years. Your acquirer's margin is a matter of negotiation.

Bank debit prices differently. Providers publish a percentage plus a small fixed fee with a cap on top, so past a certain invoice size your fee stops growing altogether.

We've given the full cost breakdown its own guide, including the regulator's figures for what merchants of different sizes actually pay, and there's a separate answer piece working through the arithmetic of direct debit against card at each invoice size.

When the money lands

Settlement speed and payment speed are separate things, and mixing them up will throw your cash forecast out.

Payment speed is when your customer acts. Across Adfin, 42.9% of customer-initiated payments arrive within 24 hours of the request, with a median of 53 hours (Adfin platform data). That's the number your reminders influence.

Settlement speed is what your provider does next. With Adfin, open banking settles the same day, bank transfer and cards at T+2, and direct debit at T+3.

If you blend those in one report you'll see your direct debit customers appear late when the mandate did exactly what it was told. Split your days-to-pay by method before you draw any conclusion from it.

What protection your customer has

Most businesses never look at this part of the decision, and it changes how a nervous customer behaves at checkout.

The FCA sets out three positions. If your customer paid by card and something goes wrong, "your card provider can ask the seller's bank to refund the money", known as the chargeback scheme. If they paid by credit card and the item "cost more than £100 but less than £30,000", they may also have a claim against the card provider under section 75 of the Consumer Credit Act 1974. If they paid by bank transfer, they get neither.

What a bank transfer payer does get is the APP reimbursement regime. It covers payments made on or after 7 October 2024 over Faster Payments or CHAPS. The maximum claim is £85,000, firms may apply an optional £100 excess, and reimbursement is due within five business days.

The limit that matters for a business audience is the scope. The regime covers individuals and microenterprises as well as charities. A larger business that sends a payment to a fraudster is outside it. If your customers are big companies paying you by transfer, their finance team already knows this, and it's part of why invoice fraud is aimed at exactly that group. There's a piece in this set on how safe bank transfer and open banking actually are.

Direct debit runs on a different basis again. The Direct Debit Guarantee entitles a payer to "a full and immediate refund" from their own bank where an error has been made. No other method offers a promise that strong, and it puts a real obligation on you to bill accurately.

What each method does to your on-time rate

Method choice affects when you get paid, not just what it costs. The clearest split in Adfin's own data is between payments your customer initiates and collections you initiate.

Among customer-initiated methods, 72.7% of Apple Pay payments arrive on or before the due date, 70.3% of Google Pay, 65.1% of card, 62.0% of bank payment and 57.9% of bank transfer (Adfin platform data). The ranking tracks how few steps each one takes. Apple Pay is a thumbprint, and a bank transfer means opening an app and typing.

Invoice size pulls in the other direction, though not far. On-time payment falls from 69.6% for invoices under £100 to 60.1% for invoices of £2,500 and over (Adfin platform data). Your biggest invoices are a little more likely to be late, and they're also where an uncapped card fee hurts most.

Where a mandate is in place, the payment happens on the date you set unless something breaks. That's why direct debit accounts for 83.4% of the payments Adfin collects on its own rails, counted by number of payments rather than value (Adfin platform data).

Choosing between them

There's no single best method, and the businesses that get paid reliably tend to run more than one deliberately.

For anything recurring or contracted, direct debit gives you the date. For a first sale, a one-off, or a customer who won't sign a mandate, a card or an open banking link gives you speed without a set-up conversation. For a large one-off invoice, open banking avoids an uncapped card fee and avoids your customer mistyping your account number.

Two questions are worth answering before you settle it. What does your average invoice look like, since the cost gap between capped and uncapped pricing only opens up above a few hundred pounds? And how much of your revenue is contracted, since that's the share you can put on a mandate and stop chasing?

Whichever mix you land on, keeping it in one place keeps the reconciliation manageable. With Adfin you can offer card, Apple Pay, Google Pay, open banking, bank transfer and direct debit from the same invoice, with payments matched back to invoices automatically and synced to Xero or QuickBooks. Your customer picks; you get one ledger.

Common questions

What payment methods can a UK business accept?

Which payment method is cheapest for a UK business?

How quickly does each method pay out?

Why do commercial cards cost more than personal ones?

Can I charge my customers a fee for paying by card?

Is a bank transfer protected in the same way as a card payment?

Sources

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Adfin team