A UK business can be paid by card, direct debit, bank transfer or pay by bank (open banking), and most end up offering two or three. The methods differ in who starts the payment, what it costs you, how quickly the money arrives and what your customer can do to get it back. Direct debit suits recurring fees, cards and pay by bank suit one-off and first payments, and keeping them all on one invoice keeps the reconciliation simple.
In this article
The short version
- Four methods cover most UK payments: card, direct debit, bank transfer and pay by bank.
- Card fees rise with the invoice; direct debit and pay by bank fees are usually capped.
- Business cards fall outside the interchange caps, so they cost more to accept.
- Card payers can claim chargebacks; bank transfers can't be reversed once sent.
- Direct debit suits recurring fees, cards and pay by bank suit one-off payments.
The ways a UK business can be paid
Four methods cover almost everything a UK business collects, with a fifth on the way. The split that shapes your cash flow is who starts the payment. With a card, a bank transfer or pay by bank, your customer has to act. With a direct debit, you collect on a date you've told them about in advance.
| Method | Who starts it | How it's usually priced | When the money arrives |
|---|---|---|---|
| Card (including Apple Pay and Google Pay) | Your customer | A percentage plus a fixed fee, uncapped | Usually one to three working days after payment, depending on the provider |
| Direct debit | You, under a mandate the customer signed | A percentage plus a fixed fee, usually capped | A few days after the collection date, depending on the provider |
| Bank transfer | Your customer, typing your details into their app | Often little or nothing per payment | Within minutes, once they get round to it |
| Pay by bank (open banking) | Your customer, approving a pre-filled payment in their app | Set by your provider, often capped | Usually within minutes |
| Variable recurring payments | Your customer gives a standing permission | Set by your provider | Within minutes |
Cash and cheques are still legal, but the cost moves onto your own time, and neither leaves a record that matches itself to an invoice.
Variable recurring payments (VRPs) let a customer give one standing permission for repeat open banking payments, within limits they set. A scheme for commercial VRPs launched in June 2026, but it started with sectors such as utilities, financial services and government, so for now you can't use it to collect ordinary invoices.
Bank transfer and pay by bank both travel over Faster Payments, which runs around the clock. The difference is the typing. With a bank transfer your customer copies your sort code, account number and reference from the invoice, and the reference is the field most likely to arrive blank or wrong. With pay by bank, the amount, your details and the reference are already filled in, and your customer just approves the payment with the same security they use for everything else in their banking app.
What each method costs you
Card fees are the hardest to read, because one card payment pays three parties: your customer's card issuer (through interchange), Visa or Mastercard, and your provider. Interchange on personal cards is capped by UK law, at 0.2% of the payment on debit and 0.3% on credit. Scheme fees have no cap, and the Payment Systems Regulator's 2025 review found Visa and Mastercard's had gone up by at least a quarter since 2017.
Company cards aren't covered by those caps, so they cost more to accept. Most providers charge a higher rate for them, and if you invoice other businesses, a good share of your card payments will arrive on exactly those cards. Card fees are also a percentage with no ceiling, so a £5,000 invoice paid by card costs you roughly ten times what a £500 one does.
Direct debit and pay by bank are usually priced differently, with a cap that stops the fee growing past a certain invoice size. On Adfin's published pricing, every payment costs 1% + 20p, and on direct debit and bank payments the percentage is capped at £4, so the most you pay is £4.20, apart from an extra 0.3% on direct debits above £2,000. Premium cards, which include business cards and Amex, are 2% + 20p. So a £150 invoice costs £1.70 by pay by bank or direct debit and £3.20 on a business card, and a £950 invoice costs £4.20 by bank and £19.20 on a business card.
Then there are the fees that don't appear in the headline rate: charges for failed direct debit collections, chargeback fees, monthly fees to show your own name on statements, and the cost of a separate tool to chase people who haven't paid. It's worth asking every provider for these alongside the rate itself.
What your customer can claw back
How much protection your customer has affects both your risk and how comfortable a new customer feels paying you.
Card payers have the strongest rights. If something goes wrong, their card provider can ask your provider to reverse the payment, known as a chargeback, and the money comes back out of your account. A personal credit card payer may also have a claim against their card provider under section 75 of the Consumer Credit Act on purchases over £100 and up to £30,000. Most providers also charge you a fee for each chargeback, on top of the refund.
Bank transfers and pay by bank payments can't be cancelled once sent, so there's no chargeback. Your customer's only route back is to ask you for a refund. If they were tricked into paying a fraudster, they may be covered by the reimbursement rules for authorised push payment fraud, which apply to individuals, micro-enterprises and charities for payments made since 7 October 2024, up to £85,000. Larger businesses aren't covered.
Direct debit payers have the Direct Debit Guarantee. If a payment is taken in error, their bank refunds them in full straight away, and the bank then claims the money back from the collecting business. The Guarantee also promises advance notice, so you tell your customer the amount and date before every collection, usually a few working days ahead.
How to choose the right mix
There isn't one best method, and businesses that get paid reliably tend to run more than one on purpose.
For anything recurring or contracted, such as monthly retainers, annual fees spread over the year or subscriptions, direct debit gives you a collection date you control and a capped fee. It's less suited to a first sale to a new customer, because the mandate takes a few minutes to set up and your customer has to trust you enough to sign it.
For a first payment, a deposit or a one-off invoice, a payment link with card, Apple Pay, Google Pay and pay by bank on the same page lets your customer pay the way they prefer, there and then. Card is often their default, so it's worth putting pay by bank first on larger invoices, where the capped fee saves you the most.
It helps to look at the size of your average invoice, because the gap between a capped fee and an uncapped card percentage only opens up past a few hundred pounds. Then look at how much of your income is recurring, since that's the share you can put on a mandate and stop chasing.
Whichever mix you choose, try to run it from one place. Adfin lets you offer card, Apple Pay, Google Pay, pay by bank, bank transfer and direct debit from the same invoice, sends payment links by email, SMS or WhatsApp, and matches each payment back to its invoice in Xero or QuickBooks. Payouts arrive every weekday, in full, with the fee invoiced separately. For the invoices nobody pays, Adfin's Customer Agents can chase on the schedule you set and retry failed direct debits for free, within rules you approve.
Common questions
What payment methods can a UK business accept? Card, direct debit, bank transfer and pay by bank (open banking). Cash and cheques are still legal, and variable recurring payments are starting to arrive in a few sectors.
Which payment method is cheapest for a UK business? On small amounts the difference is pennies. On larger invoices, direct debit and pay by bank are usually cheapest, because providers cap the fee while card fees keep rising with the amount.
Why do business cards cost more to accept? UK interchange caps of 0.2% on debit and 0.3% on credit apply to personal cards only. Business and commercial cards are outside the caps, so providers charge more for them.
Can I charge my customers a fee for paying by card? Not on a personal card, where surcharges are banned. On a commercial card you can, as long as the fee doesn't exceed what that payment costs you.
How quickly does each method pay out? Pay by bank and bank transfers arrive within minutes. Card payments usually reach you within a few working days, and direct debits follow the three-day Bacs cycle, then your provider's payout.
Is a bank transfer protected like a card payment? No. Chargebacks and section 75 apply to cards only. A bank transfer payer may be covered by the fraud reimbursement rules, but only if they're an individual, a micro-enterprise or a charity.
Sources
- legislation.gov.uk - Regulation (EU) 2015/751 on interchange fees (accurate as of October 2026) https://www.legislation.gov.uk/eur/2015/751
- Payment Systems Regulator - Market review into card scheme and processing fees (accurate as of October 2026) https://www.psr.org.uk/our-work/market-reviews/market-review-into-card-scheme-and-processing-fees/
- Payment Systems Regulator - APP fraud reimbursement protections (accurate as of October 2026) https://www.psr.org.uk/information-for-consumers/app-fraud-reimbursement-protections/
- FCA - Fraudulent payments: getting your money back (accurate as of October 2026) https://www.fca.org.uk/consumers/fraudulent-payments
- Direct Debit - The Direct Debit Guarantee (accurate as of October 2026) https://www.directdebit.co.uk/direct-debit-guarantee/
- Adfin - Pricing (accurate as of October 2026) https://www.adfin.com/pricing
