Stripe vs GoCardless: Cards, Direct Debit or Both for a UK Business?

For a UK business, Stripe is the usual choice for cards and one-off payments, and GoCardless is the usual choice for recurring Direct Debit. The Stripe vs GoCardless comparison is closer than it looks, because Stripe also takes Bacs Direct Debit and GoCardless also offers pay-by-bank payments. At the time of writing (November 2026), standard UK cards on Stripe cost 1.5% + 20p, while Direct Debit on either costs about 1% with a cap of £4 on the base plans.

This guide is for a UK business adding payments to a platform, an app or an invoicing flow. It covers what each provider charges, how recurring payments, failures and disputes differ, where open banking fits, what marketplaces need, what the app stores require and how payments get into Xero. It ends with when to use both. Our payment integration service starts from this choice. Where a provider’s own hosted checkout already does the job, we say so.

Key takeaways

• Cards are quickest to collect. Direct Debit is cheapest on larger recurring payments, because the fee is capped at £4 on the base plans.
• Stripe and GoCardless overlap. Stripe takes Bacs Direct Debit, and GoCardless offers pay-by-bank payments over open banking.
• Disputes work differently. A card chargeback reverses the payment and can be contested, while a Bacs Direct Debit dispute on Stripe cannot be countered.
• If your app sells digital features, the Apple and Google store rules usually decide how you bill inside the app, whatever you use on the web.
• Many products use more than one: cards through Stripe, Direct Debit for recurring invoices, and RevenueCat to tie app-store subscriptions to one customer record.

How do Stripe and GoCardless charge for UK payments?

Both charge a percentage plus a fixed fee per payment, and the Direct Debit fees are capped. The figures below come from each provider’s official pricing page, in pounds.

Stripe (UK pricing):

• Standard UK cards: 1.5% + 20p.
• European Economic Area cards: 2.5% + 20p.
• International cards: 3.15% + 20p, plus 2% if currency conversion is needed.
• Bacs Direct Debit: 1%, with a minimum fee of 20p and a £4.00 cap.
• Dispute received: £20.00 per dispute. No monthly fee, setup fee or closure fee.

GoCardless (pricing), for UK domestic Direct Debit:

• Standard: 1% + 20p, capped at £4.
• Advanced: 1.25% + 20p, capped at £5.
• Pro: 1.4% + 20p, capped at £5.60.
• A 0.3% surcharge applies to Direct Debits over £2,000. Prices exclude VAT, and GoCardless says it charges VAT on transaction fees invoiced to UK merchants.

Here is an illustrative comparison, using the base rates above and ignoring VAT. A £50 monthly payment costs 95p by standard UK card on Stripe, 50p by Bacs Direct Debit on Stripe and 70p on GoCardless Standard. A £2,000 payment costs £30.20 by card, and £4 by Direct Debit on either provider. The cap is why Direct Debit wins on larger invoices.

The percentage is not the whole bill. The higher GoCardless plans charge more per payment, and failed payments, disputes and your own time cost money. Price your real mix of payments, not the headline rate.

Should you take cards, Direct Debit or pay by bank?

Take cards when the customer is present and wants to pay now, Direct Debit when the same amount recurs, and pay by bank when a larger one-off payment makes card fees sting. Many products offer two of the three.

Cards are the quickest to set up for the customer, and they work worldwide. Direct Debit takes longer to confirm, but it suits subscriptions, retainers and invoices, because the payment collects itself. Stripe’s documentation says a Bacs Direct Debit typically takes 4 business days to confirm success or failure when a mandate is already in place, and up to 7 business days when collecting a new mandate.

Pay by bank is the third route, covered below. A customer approves a one-off payment in their banking app, and the money moves bank to bank.

For recurring digital products, the choice often follows the customer. Direct Debit tends to suit businesses billed monthly, and cards tend to suit a quick sign-up.

What happens when a payment fails or is disputed?

A failed Direct Debit and a card chargeback are handled differently, and the difference affects your cash flow. Plan for both before you launch.

Direct Debit has its own protection for the payer. The Direct Debit Guarantee says that if an error is made in the payment, the payer is entitled to a full and immediate refund of the amount paid from their bank or building society. It also says they can cancel a Direct Debit at any time by contacting their bank.

On Stripe’s side, the Bacs documentation says there is no set time limit for customers to file a dispute, you cannot submit evidence or counter a Bacs Direct Debit dispute, and the bank’s decision is final. Stripe can retry a failed Direct Debit up to 2 times, no more than 30 days after the first attempt, once you enable Direct Debit retries.

A card dispute works differently. Stripe describes a chargeback as a cardholder questioning a payment with their card issuer, which immediately reverses the payment. You can respond with evidence in the dashboard. Stripe’s UK pricing lists a £20.00 fee for each dispute received, and another £20.00 for each dispute you respond to manually.

The practical lesson is the same for both: clear billing descriptions, notice before each charge, an easy way to cancel and a prompt refund policy all help keep disputes down. Failed payments and retries are in the scope of our payments integration, so a missed payment does not quietly end a subscription.

What is open banking, and what is an open banking API?

Open banking lets a customer share their bank data or approve a payment through a regulated provider, using their own bank’s app. The Open Banking site describes it as “a simple, secure way to help you move, manage and make more of your money”, and says only apps and websites provided by FCA-regulated firms, or the European equivalent, can join its directory.

An open banking API is the technical door to that. A provider connects to the customer’s bank, and your product asks the provider to start a payment or to read account data with consent. You rarely connect to banks yourself.

For taking money, both providers offer it as pay by bank. Stripe’s Pay by Bank is a single-use payment method for customers in the UK, available by default for payments between 0.50 GBP and 10,000 GBP. Stripe’s page says no dispute process exists that can lead to a chargeback, and recurring pay by bank is in private preview. GoCardless’s Pay by Bank, formerly Instant Bank Pay, says payments made before 11am on business days reach your account the same day.

We did not find a current fee for either, so check the fee with the provider before you plan around it. Bonsai’s wealth-planning app uses an open banking API integration that we built to move cleanly between providers, so the product is not tied to one vendor. This is general information, not financial or legal advice.

How do marketplaces pay out to several people?

A marketplace needs money to split between your platform and the people who supply the service, and that is what Stripe Connect is for. Connect lets a platform take payment and send payouts to connected accounts, and Stripe lists Pay by Bank and Bacs Direct Debit as working with it.

On Stripe’s UK Connect pricing, in the model where you handle pricing, the page lists £2 per monthly active account and 0.25% + 10p per payout sent. These are in addition to card fees, and Stripe also shows a model where it handles pricing for you.

Payouts to many people raise questions beyond the fee: who is the merchant of record, how VAT is handled and how refunds are split. We have shipped subscription billing on Stripe, and creator payouts on Stripe Connect. For marketplace-style products our billing platform work starts from £10,000, and it covers payouts and multi-party splits, VAT and reconciliation, and failed-renewal recovery.

GoCardless is built to collect from customers. Check with GoCardless before assuming it can also pay people out, because Connect is built for that.

What do Apple and Google require for apps?

If your app sells digital features, the app-store rules usually decide how you bill inside it. This catches founders late, so settle it before you design the checkout.

Apple’s App Review Guidelines say that to sell features or functionality within your app, with subscriptions and premium content as examples, you must use in-app purchase. For physical goods or services consumed outside the app, the guidelines say to use other purchase methods, such as Apple Pay or card entry. Outside the United States storefront, they restrict buttons and links that send customers to other ways to pay, with exceptions where a specific entitlement applies.

Google Play’s Payments policy says its billing system is required for in-app purchases of digital goods, and lists physical goods and physical services as not supported by Play billing.

Both pages change, so read them again before you build. This is general information, not legal advice. We have shipped in-app purchases and subscriptions through both app stores, including the review quirks we learned the hard way. Cicerone’s outdoor guide app ties in-app guidebook purchases to a Shopify customer hub.

RevenueCat is the tool we reach for when a product sells through the stores. It describes itself as simplifying purchase setup and receipt validation across the stores and the web. We have shipped it for app-store subscriptions, to keep one record of who has paid across Apple, Google and Stripe.

Route	Good fit	Watch for
Stripe	Cards, web checkout, payouts	Card disputes
GoCardless	Recurring invoices, retainers	Slower to confirm
App stores	Digital features inside apps	Store rules and fees

How do payments get into Xero?

Payments reach Xero through an integration that matches each payout to the invoice it settles. Done by hand, that is a spreadsheet job every month, and it is where mistakes creep in.

Invoicing flows we build post straight into Xero, so your accountant can trace money movements without a spreadsheet. For the events group in our sales automation case, a signed contract triggers automatic invoice creation in Xero, alongside Pipedrive and SmartDocs. That case is about invoicing, not payment processing, but it shows the same pattern.

Our guide to Xero integration covers the options, from connectors to custom builds. The point for this decision: pick a provider whose payouts and fees can be reconciled cleanly, because someone has to do it every month.

What does PCI DSS mean for you?

PCI DSS is the card industry’s security standard, and the way you integrate decides how much of it lands on you. Stripe’s security guide says that if your business handles sensitive card data directly, you might be required to meet more than 300 security controls.

It also says many businesses do not need to. Using a hosted or embedded payment integration lets you collect and send payment information directly to Stripe without it passing through your servers, reducing your PCI obligations. Stripe notes that you still have to accept payments in a PCI-compliant manner and attest to it each year.

That is how we build. Card details go to the payment provider, not your servers, which keeps your compliance burden small. PCI compliance is in scope from day one of a payments integration.

For Direct Debit, the data is bank details rather than card numbers, and the mandate wording and notices have their own rules. Stripe’s Checkout collects the Bacs mandate details and acceptance for you. We integrate with GoCardless where Direct Debit fits how you bill.

When should you use both?

Use both when your customers split into two kinds: people who pay by card now and organisations that pay the same amount every month. A SaaS product with a free trial and annual plans on cards, plus Direct Debit for larger customers, is the classic case.

Keep the customer record in one place, whichever providers sit behind it. Your product should know who has paid, until when and how, so support does not need three dashboards. That one-record idea is why we build billing around your own data model, with providers behind it.

If you only need one, start with the one that matches your most common payment. Add the second when real customers ask for it. Often that means one provider first and the second as a later phase.

What will it cost, and what should you do next?

A scoped payments integration with us starts from £4,000 at a fixed price. It covers Stripe, GoCardless or your provider, subscriptions, invoicing or checkout, failed payments and retries, and testing end to end before go-live. A billing platform for complex or multi-party payments starts from £10,000, and the code and IP are yours on payment. If your provider’s hosted checkout already covers what you need, we will tell you.

A sensible next step is a one-page payments brief. List what you sell, how often it recurs, the typical amount, who pays (consumers or businesses), where they are and which app stores you sell through. That is enough to choose the provider mix and estimate the fees using the rates above.

Our payment integration service starts from that brief. The services marketplace Dooit lists Stripe among its services. If the product is a new app, our guide to how much an app costs in the UK puts billing in context, and our comparison of Supabase vs Firebase covers the backend underneath it.