Introduction to the UK

An overview of the UK's currency, population and key statistics.

Cash currency

The currency of the United Kingdom is the sterling (stg; GBP), with the pound (£) being its primary unit. The sterling is also referred to as the pound, British pound, and pound sterling. The pound has four denominations of banknotes in circulation, namely £5, £10, £20, and £50. The £1 and £100 notes are used in Scotland and Northern Ireland only. The sterling has a sub-unit called penny (plural: pence), with 100p making £1. The penny can be found as 1p, 2p, 5p, 10p, 20p, and 50p coins. The two other sterling coins are the £1 and £2 coins.

Digital currency

The Bank of England is currently looking to launch the digital pound in the future, the UK's own central bank digital currency (CBDC). The digital pound, also referred to as "digital sterling" and "Britcoin" will be denominated in sterling and will have a stable value.

UK population

According to UN data, the United Kingdom had an estimated population of 67,886,011 as of the middle of 2020.

Based on Worldometer elaboration of the latest UN data, the country had a population of 68,083,438 as of January 20, 2021, with 83.2% living in urban areas, mainly in London, Birmingham, and Liverpool. The median age of the UK's population was 40.5 years. The online population grew to 62.9 million by the end of 2019 from 62.5 million in 2018, according to the PPRO WECE Report.

Languages spoken in the UK

English is the national and de facto official language of the UK. There are minority languages spoken throughout the country, including Scots, Welsh, Scottish Gaelic, Irish, Cornish, Hindi-Urdu, Arabic, Chinese, French, German, Spanish, and Tamil.

Key statistics

  • In 2021, the UK had a gross domestic product of $3.131 trillion and a per capita GDP of $46,510.28. According to the Office for National Statistics, the country's monthly real GDP is estimated to have grown by 0.3% in January 2023, after falling by 0.5% in December 2022.

  • A study conducted by Finder showed that the average UK household had £7,509 in savings accounts in 2022, compared with £6,757 in 2020. With the median annual average household savings at £2,160, 50% of households save more, and 50% save less than the figure.

  • According to data compiled by, 57.74 million people in the UK had bank accounts in 2019, with a banking rate of 66.65%, based on the country's current population. Meanwhile, 65% of the population had debit or credit cards.

UK internet & mobile phone trends

  • According to the UK Office for National Statistics, 99% of people aged 16-44 have internet access, while only 54% of those aged 75 years and above go online regularly.

  • Datareportal reported that there were 65 million internet users in January 2020, which had increased by about 290,000 (+0.24%) since 2019, bringing the internet penetration rate to 96%. Meanwhile, smartphone penetration stood at 85% at the end of 2019, according to the PPRO WECE Report.

UK e-commerce stats

The high levels of internet and smartphone penetration make the UK a well-established market for e-commerce.

  • According to JPMorgan, a key feature of UK e-commerce is sophisticated consumers who are well-versed in online shopping. The average annual revenue per paying user grew to $4,516 by the end of 2019 from $4,183.03 in 2019, according to the PPRO WECE Report.

  • UK retail e-commerce sales rose to €212.9 billion ($238.50 billion) in 2020 from €178.5 billion ($216.66 billion) in 2019. Most cross-border e-commerce purchases by Britons are of products from China, the United States, and Germany.

Summary of the UK's fiscal policy

Amid the current high rate of inflation, one of the UK's priorities is to address high energy bills. In October 2022, the country introduced the Energy Price Guarantee to ensure that the average household does not pay more than £2,500 per year until June 2023 and £3,000 from July 2023 until March 2024.

The other priorities, as stated in Spring Budget 2023, are "halving inflation, growing the economy, and getting debt falling."

Below is the summary of the UK's tax rates and bands:

  • Personal allowance - The tax-free personal allowance for most individuals is £12,570.

  • Basic rate - The basic rate of income tax is 20% on taxable income up to £50,270.

  • Higher rate - The higher rate of income tax is 40% on taxable income between £50,271 and £150,000.

  • Additional rate - The additional rate of income tax is 45% on taxable income over £150,000.

  • Scottish income tax - In Scotland, the income tax rates and bands are different from the rest of the UK, with five income tax bands ranging from 19% to 46%.

The UK's current fiscal stance is "to ensure sustainable public finances, economic growth and stability, value for money for the taxpayer, a strong balance sheet, and intergenerational fairness."

The UK currently faces three main sources of potential fiscal risks: "geopolitical tensions, higher energy prices, and long-term fiscal pressures."

How people pay in the UK

An overview of how people in the UK choose to make payments.

Traditional payment methods

The primary traditional payment methods used in the UK


Cash is still a popular payment method in the UK, particularly for small transactions. However, its use has been declining in recent years as electronic payment methods have become more widespread.


Visa is a global payment technology company that offers electronic payment solutions through Visa-branded credit, debit, or prepaid cards. In the UK, 90% of the population are Visa or Mastercard cardholders, and cards account for around 90% of all online payments.


Mastercard is a global payment and technology company that processes payments between retailers' banks and card-issuing banks. Mastercard provides the majority of the UK's credit cards, making it the second-largest player in the market after Visa.

American Express

With over 100 million cards in circulation and a global network, American Express is a quick and secure payment method for credit card transactions. While less widely accepted in the UK than in America, Amex cards are generally accepted at major retailers, restaurants, and grocery store chains.

Bacs Direct Debit

Bacs payments are a frequently used bank-to-bank transfer method in the UK, with Direct Debit being the most popular type. Direct Debit is considered the safest payment method due to the Direct Debit Guarantee, protecting customers from fraudulent payments.

Alternative payment methods (APMs)

Alternative payment methods

Apple Pay

Apple Pay, a mobile payment service from Apple Inc., enables users to make in-person, online, and in-app payments. It replaces chip and PIN transactions at contactless terminals and is used by 46% of UK respondents in a 2022 survey, followed by Paypal with 41%.


PayPal is a widely used online payment platform that allows customers to pay with their PayPal account balance, credit card or bank account. Over 20 million UK shoppers use PayPal annually to make online purchases and send or receive money securely.

Wise prepaid card

Wise is a versatile prepaid card for UK and international spending, allowing transfers to 80 countries and holding over 50 currencies. The Wise app enables easy money transfers and expense tracking without monthly fees.


Klarna is the country's top Buy Now, Pay Later service, used by over 5,000 online retailers. With FCA approval in 2014, Klarna allows payment at a later date. The company works with thousands of UK merchants and reported year-on-year growth of over 200% in the UK.


Affirm is a digital payment platform that lets online shoppers defer payments on purchases and pay them off in weekly instalments. Affirm is a favoured Buy Now, Pay Later option in the UK due to its wide range of financing options, including longer payment terms and the ability to build credit through on-time payments.

How to accept payments in the UK

A guide to accepting payments in the UK.

How to accept payments online in the UK

Before accepting online payments, you need to determine which payment methods you want to accept. Then, you can choose a payment gateway provider, a service that authorises and processes online payments with their specific system. One popular payment system that you might want to consider is a 4-party model.

The 4-party payment model

The 4-party model is the most commonly used payment system, with Mastercard and Visa being the most prominent payment schemes.

The 4-party model is a payment system that involves four parties connected through a payment scheme: the Acquirer, the Issuer, the Retailer, and the Cardholder.

Here's a simplified overview of how the 4-party model works:

  1. The Cardholder initiates a payment by presenting their payment card to the Retailer to purchase goods or services.

  2. The Retailer sends the payment details to their Acquirer (payment processors such as Worldpay or Global Payments), who processes the payment request and sends it to the payment scheme (such as Mastercard or Visa).

  3. The payment scheme sends the payment request to the Issuer (such as a bank or licensed issuer) who issued the card to the Cardholder.

  4. The Issuer checks if the Cardholder has enough funds to complete the transaction and approves or declines the payment request. If the payment is approved, the Issuer sends an authorization code to the payment scheme.

  5. The payment scheme sends the authorization code to the Acquirer, who then sends it to the Retailer, completing the transaction.

Before going live with your payment system, ensure that everything is working correctly by making a small test payment. Once satisfied, you can launch your payment system and start accepting payments online.

How long does an international payment from the UK take?

The time it takes for an international payment from the UK to reach its destination can vary depending on several factors, including the destination country, the currency used, and the payment method. Below are some general estimates for international payment times:

  • SEPA (Single Euro Payments Area) payments within Europe typically take 1-2 business days.

  • Payments to the United States can take 2-4 business days.

  • Payments to other countries outside Europe and the United States can take 2-7 business days, depending on the destination country.

  • International wire transfers can take longer than other payment methods, often 3-5 business days or more.


Merchant fees

Merchant fees for online payments in the UK can vary depending on the payment method and the merchant services provider used. Here are some examples of typical merchant fees for online payments in the UK:

  • Credit and debit cards - Merchant fees for accepting credit and debit card payments online typically range from 1.5% to 3.5% of the transaction amount, depending on the type of card used and the merchant services provider.

  • PayPal - PayPal charges a fee of 2.9% plus £0.30 per transaction for accepting payments in the UK.

  • Stripe - Stripe charges a fee of 1.4% plus £0.20 per transaction for European cards and 2.9% plus £0.20 for non-European cards.

  • Apple Pay - Apple Pay charges a fee of 0.15% per transaction for accepting payments in the UK.

  • Bank transfers - Bank transfer fees can vary depending on the bank used, with some banks charging a flat fee per transaction and others charging a percentage of the transaction amount.

Other fees

Other fees surrounding online payments in the UK include charges incurred by merchants, payment processors and financial institutions involved in the payment processing chain. Below are some common fees:

  • Interchange fees - Interchange fees are charges that are paid by merchants' banks to cardholders' banks to cover the costs of processing card transactions. These fees are usually based on a percentage of the transaction value and can vary depending on the type of card used and the merchant's industry.

  • Payment gateway fees - Payment gateway providers charge a fee for processing transactions on their platform, which may be a percentage of the transaction value or a flat fee per transaction.

  • Cross-border fees - If a merchant accepts payments from customers outside of the UK, they may be subject to additional fees for cross-border transactions, including currency conversion fees and international processing fees.

  • Chargeback fees - Merchants that receive chargebacks may be subject to additional fees, including chargeback processing fees and penalties for excessive chargebacks.

Security challenges of online payments in the UK

Below are some of the key security challenges associated with online payments in the UK:

  • Fraudulent transactions - Fraudulent transactions are a major concern for online merchants, as fraudsters may use stolen credit card information to make unauthorised purchases. Merchants must implement strong authentication measures, such as multi-factor authentication and fraud detection tools, to prevent and detect fraudulent transactions.

  • Data breaches - Data breaches can result in the theft of sensitive customer information, including credit card numbers and personal details, making it a significant threat to online payments. Merchants must implement strong security measures, such as encryption and tokenisation, to protect customer data from hackers and cybercriminals.

  • Malware and phishing attacks - Malware and phishing attacks can be used to steal login credentials and other sensitive information from consumers and businesses. Merchants must educate their customers about the risks of these types of attacks and implement strong security measures, such as firewalls and anti-malware software, to protect against them.

  • Payment Card Industry (PCI) compliance - Merchants that accept credit card payments online are required to comply with PCI Data Security Standards (DSS) to ensure the security of customers' payment data. Failure to comply with PCI DSS can result in fines, legal liabilities, and damage to a merchant's reputation.

  • Third-party risks - Merchants that use third-party payment processors and financial institutions to process online payments may be exposed to additional security risks. It is important for merchants to carefully vet their third-party providers and ensure that they have strong security measures in place to protect against fraud and data breaches.

Banks, payment processors, and fintech companies play a crucial role in ensuring the security of online payments in the UK. Below are some ways these industry players contribute to the safety of online payments:

  • Banks - Banks are responsible for issuing credit and debit cards to consumers and businesses. They play a key role in ensuring the security of online payments by implementing security measures such as fraud detection systems and two-factor authentication. Banks also monitor transactions for suspicious activity and can freeze accounts or cards if they suspect fraudulent activity.

  • Payment processors - Payment processors facilitate the secure transmission of payment data between merchants and banks. They play a crucial role in ensuring the security of online payments by implementing secure encryption technologies and PCI DSS compliance measures. Payment processors also monitor transactions for fraudulent activity and may use machine learning algorithms to detect anomalies and prevent fraud.

  • Fintech companies - Fintech companies offer innovative payment solutions that cater to specific markets and customer segments. These companies often place a strong emphasis on security and may use biometric authentication, blockchain technology, and other advanced security measures to protect online payments.

Key sectors & industries in the UK

An overview of the UK market.

UK's top 10 industries by revenue

  1. Financial and insurance activities – This industry generated a revenue of £1,982.9 billion in 2021, making it the largest industry in the UK by revenue. It employs approximately 3.3 million people.

  2. Professional, scientific, and technical activities – This industry generated a revenue of £396.5 billion in 2021. It is a diverse industry that encompasses a range of professional services, including legal, accounting, engineering, and research and development.

  3. Wholesale and retail trade – This industry generated a revenue of £372.2 billion in 2021. It is one of the largest employment sectors in the UK, employing approximately 4.4 million people.

  4. Manufacturing – This industry generated a revenue of £342.5 billion in 2021. It is a diverse industry that includes the production of goods in sectors such as food, textiles, electronics, and vehicles.

  5. Construction – This industry generated a revenue of £329.6 billion in 2021. It covers the design, building, and maintenance of infrastructure such as commercial buildings, residential properties, and transport networks.

  6. Health and social work – This industry generated a revenue of £198.9 billion in 2021. It includes healthcare providers, social care providers, and associated support services.

  7. Public administration and defence – This industry generated a revenue of £165.5 billion in 2021. It comprises government services, including law enforcement, public administration, and national security.

  8. Education – This industry generated a revenue of £103.8 billion in 2021. It includes schools, universities, and other educational institutions that provide various educational services.

  9. Accommodation and food services – This industry generated a revenue of £90.5 billion in 2021. It includes hotels, restaurants, and other businesses that provide accommodation and food services.

  10. Transportation and storage – This industry generated a revenue of £83.3 billion in 2021. It comprises businesses involved in transporting and storing goods and people, including air, road, rail, and sea transportation.

UK imports and exports

The latest research briefing by the UK Parliament's Commons Library shows that the UK exported goods and services worth £815 billion and imported goods and services worth £902 billion in 2022, with the EU accounting for 42% of UK exports and 48% of imports. The overall trade deficit was £87 billion in 2022, resulting from a goods trade deficit of £231 billion offset by a services trade surplus of £144 billion.

The UK had a trade deficit of £92 billion with the EU but a trade surplus of £5 billion with non-EU countries. In the three months to January 2023, the trade deficit with all countries increased to £15.3 billion as exports decreased by 6.1% and imports decreased by 1.3%. The current account deficit, including investment income and transfers, was £94 billion in 2022 (3.8% of GDP), compared to £34 billion in 2021. However, the current account deficit narrowed to £2.5 billion (0.4% of GDP) in Q4 2022 from £12.7 billion (2% of GDP) in Q3 2022.

Regulation in the UK

The regulatory environment of the UK.

Summary of the regulatory environment in the UK

The UK has a comprehensive legal framework governing different economic sectors. Some of the key laws and regulations include:

  • Company law - This includes regulations governing the formation, operation, and dissolution of companies.

  • Employment law - This includes regulations governing employment contracts, working conditions, and employee rights.

  • Taxation - The UK has a complex tax system that includes various regulations governing corporate and personal taxation.

  • Intellectual property law - This includes regulations governing copyrights, patents, and trademarks.

  • Environmental law - This includes regulations governing pollution, waste disposal, and environmental protection.

  • Consumer protection law - This includes regulations governing the rights of consumers, product safety, and advertising standards.

  • Data protection and privacy law - This includes regulations concerning the collection, use, and storage of personal data.

These regulations are enforced by various regulatory bodies and agencies, including the Financial Conduct Authority, the Information Commissioner's Office, the Health and Safety Executive, and the Environment Agency. Businesses operating in the UK must comply with all relevant laws and regulations to avoid legal penalties and reputational damage.

How card payments are regulated in the UK

In the UK, card payments are regulated by the Payment Card Industry Data Security Standard (PCI DSS), a set of security standards established by major credit card companies to protect against credit card fraud and data breaches. The standard includes requirements for securely storing and handling sensitive cardholder data, such as account numbers and card security codes, and for implementing strong access controls and encryption measures.

Visit the PCI Security Standards Council website to learn more.

The Financial Conduct Authority (FCA) also plays a role in regulating card payments in the UK. The FCA oversees the activities of payment service providers (PSPs), including card issuers, acquirers, and processors. PSPs must comply with various strict operational and security standards, including those related to anti-money laundering, customer due diligence, and transaction monitoring.

Visit the FCA website to learn about the organisation's role.

Some examples of the laws and regulations that govern card payments in the UK include the Payment Services Regulations 2017 (PSR) and the Electronic Money Regulations 2011 (EMR).

The PSR sets out the regulatory framework for payment service providers, including rules on licensing, transparency, dispute resolution, and security requirements. The PSR also sets out rules for handling complaints and disputes, including requirements for complaint-handling procedures and access to alternative dispute resolution (ADR) schemes.

The EMR regulates electronic money institutions (EMIs) that issue electronic money, such as prepaid cards and digital wallets. EMIs must also be authorised by the FCA and comply with operational and security standards, including safeguarding customer funds and maintaining adequate capital reserves.

Do I need a licence to do business in the UK?

Yes, there are license requirements associated with doing business in the UK. The requirements depend on the type of business and the industry it operates in. Here are some examples:

  • Companies House registration - All businesses operating in the UK must be registered with Companies House. This includes registering the company's name, address, directors, and shareholders.

  • Trading licenses - Some industries, such as food and drink, hospitality, and taxi services, require businesses to obtain permits from the local authority before starting trading.

  • Professional licenses - Some professions, such as doctors, lawyers, and accountants, require individuals to obtain professional licenses before they can practice.

  • Financial services regulation - Financial services firms, such as banks, insurance companies, and investment firms, are regulated by the Financial Conduct Authority (FCA). The FCA sets standards for conduct, prudential standards, and consumer protection.

Useful links:

UK Companies House website - allows you to begin the registration process and view company details

Payment solutions in the UK

An overview of how to accept payments from customers in the UK

Payment gateways and providers in the UK

APEXX is a London-based payment technology company that offers a solution for merchants who want to accept payments from multiple providers in the UK. Businesses may need to support multiple payment methods to cater to customers' preferences and improve their experience.

With APEXX, businesses can offer customers multiple payment options while managing them through a single platform. The APEXX Payment Orchestration Layer (POL) platform connects with various payment providers, such as banks, acquirers, and alternative payment methods, such as Alipay and PayPal.

The APEXX POL also uses intelligent routing to help businesses optimise their payment processing by automatically selecting the best payment provider for each transaction based on factors such as cost, currency, and risk. The service allows businesses to save money on transaction fees and reduce the risk of failed payments.

To use the APEXX POL, businesses need to integrate it into their existing payment systems, such as their e-commerce website or point-of-sale system. This can be done using APEXX's API or through one of their pre-built plugins for popular e-commerce platforms, including Shopify and Magento.

Cheapest payment solutions in the UK

Merchants can optimise their payment stack in the UK to reduce fees in the following ways:

  • Negotiate fees - Merchants should negotiate fees with their payment providers for the best rates. This can include negotiating transaction fees, interchange fees, and monthly fees.

  • Choose the right payment provider - Merchants should choose a payment provider that offers competitive rates and low fees. They should research and compare different providers to find the best option for their business.

  • Use alternative payment methods (APMs) - Merchants can use alternative payment methods such as e-wallets or bank transfers with lower fees than traditional card payments.

  • Avoid chargebacks - Merchants should take steps to avoid chargebacks by providing clear product descriptions, offering refunds, and resolving customer complaints promptly. Chargebacks can result in additional fees for merchants.

  • Implement fraud prevention measures - Merchants should implement fraud prevention measures to avoid fraudulent transactions, which can result in chargebacks and additional fees.

  • Monitor payment processing fees - Merchants should monitor their payment processing fees regularly to ensure they are not charged more than they should be. They can use payment analytics tools to track their fees and identify areas where they can reduce costs.

BNPL in the UK

Buy now pay later (BNPL) is a popular payment option in the UK. According to Finder UK, around 21% of UK adults have used these services to make a purchase in the past year, with 11% saying they have used BNPL in the past month. Additionally, nearly half of 18-24-year-olds in the UK have used BNPL services in the past year.

APEXX offers integration with various BNPL providers, including Klarna and Clearpay, which are popular in the UK market. These solutions allow merchants to offer BNPL options to their customers while also managing their payments stack efficiently.

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