How do payment gateways work (Stripe and PayPal)?

Short answer: A payment gateway is the service that takes a customer's card details at checkout, checks the payment is good, and moves the money to your bank. Stripe and PayPal both do this securely on their own systems, so card details never sit on your website. You pay a small fee per sale.

What a payment gateway does

When someone buys from you online, a lot happens in the couple of seconds between clicking pay and seeing a confirmation. The gateway runs that whole exchange.

It takes the card or account details, encrypts them, and passes the request to the card networks and the customer's bank. The bank approves or declines. If approved, the money is earmarked and the gateway tells your website the order is paid, so your order management can process it. The funds then settle into your account on a schedule.

The key point for you is security. With Stripe or PayPal, the sensitive card data is handled on their secure infrastructure, not yours. Your site never stores card numbers, which keeps you clear of most of the compliance burden that would otherwise fall on a shop owner. This is part of why SSL and secure checkout matter on any site taking payments.

Stripe and PayPal compared

Both are trusted, widely used, and work well for UK businesses. They differ in feel more than function.

Stripe is built to sit inside your own checkout. The customer enters their card on your site, the payment is processed by Stripe behind the scenes, and the experience feels seamless and on-brand. It is a strong default for a custom e-commerce site.

PayPal is a name customers recognise and trust. Some buyers prefer paying with their existing PayPal balance or account rather than typing card details. Offering it can reassure first-time customers who are unsure about your shop.

Many shops offer both, so customers pick what suits them. Reducing friction at this stage is one of the simplest ways to cut abandoned carts.

Fees and payouts

Nothing is free here, but the fees are straightforward once you know the shape of them.

Both providers charge per transaction: a small percentage of the sale plus a fixed few pence. The exact rate depends on the provider and the card type, and rates change, so always check their current UK pricing rather than relying on a figure you read somewhere. There is no monthly platform fee to use Stripe or PayPal themselves; you pay only when you make a sale.

Payouts work on a rolling basis. Your sales are batched and the balance is transferred to your business bank account, usually within a few working days. You will need a business bank account to receive those payouts, and you can see every transaction and upcoming payout in the provider's dashboard.

Setting it up on your site

Connecting a gateway involves creating an account with the provider, verifying your business details, and linking it to your checkout. That last step is technical, and it is part of what we handle.

When we build your e-commerce site, payment gateway setup is included in the one-off £750 alongside the catalogue, cart, secure checkout, and order management. We wire up Stripe or PayPal so payments flow to your account from launch. You own the finished site, there is no subscription, and hosting is free, forever, if you want us to keep it running. For the wider picture, see how much an e-commerce website costs.

You create and control the gateway account, since the money goes to your bank, and we handle the connection so it works cleanly at checkout.

Ready to take payments online? Get a clear price and we will set the whole thing up for you.