Which Payment Methods Have the Lowest Fees in 2025?
- Editorial Staff
- 6 days ago
- 4 min read
In 2025, how you pay is almost as important as what you pay for. Transaction fees, hidden charges, and poor exchange rates can quietly chip away at your budget. Whether you're shopping online, sending money abroad, or running a business, choosing the right payment method can save you money.
Many still assume cards or bank transfers are the cheapest on every occasion. That’s not always true. Some methods charge small but frequent fees. Others seem free, but exchange rate markups or monthly charges add cost over time.
Let’s look at which options really keep your expenses low, and which to use with care.
Bank Transfers
Bank transfers remain one of the cheapest ways to send money, especially within the UK. Most banks offer free transfers between accounts at the same bank. Moving funds to a different UK bank is often free through Faster Payments, although some high street banks charge business users up to £1 per transfer.
International transfers are more expensive. SWIFT payments can cost £10 to £30, and some banks apply their own exchange rate margins, adding to the total. If you’re regularly sending money abroad, consider using a third-party transfer service instead of your bank.
Credit Cards
Credit cards remain one of the easiest ways to pay, thanks to speed, fraud protection, and wide acceptance. In the UK, they can't be used for online gambling, following a 2020 Gambling Commission rule. However, according to gambling expert Alex Hoffman, many international casinos allow you to deposit funds securely with your credit card. For players abroad, this offers a fast, familiar method that avoids delays or setup time. Transactions are instant, and credit cards often include purchase protection.
Users should note that banks may treat gambling payments as cash advances, meaning higher interest and no grace period. Fees usually range from 3% to 5%. Before depositing, it’s wise to check how your bank handles these transactions.
Debit Cards
Debit cards are widely accepted and usually don’t carry direct fees for the user. Most merchants cover the cost of processing, though small purchase surcharges still appear in some places.
International use may trigger foreign transaction fees, often around 2.75% to 3%. Some banks now offer zero-foreign-fee debit cards, like those from Starling, Monzo, and Revolut. These cards are handy for travellers or international online shoppers.
E-Wallets
E-wallets like PayPal, Apple Pay, and Google Pay are convenient and fast. You can link them to a bank account, debit card, or credit card. Fees depend on how you fund the payment.
Paying from your PayPal balance or bank account is usually free for personal transactions in the UK. Business payments carry fees of around 2.9% plus a fixed charge. Funding via credit card pushes the fee closer to 3.4%, with currency conversion adding up to 4%.
E-wallets work best for personal UK payments. For business or international transfers, the costs can mount quickly.
Cryptocurrencies
Crypto payments are popular for low fees, especially across borders. Bitcoin transfers often cost less than £1, and some coins like Litecoin or Stellar are even cheaper.
But crypto comes with risk. Prices are volatile. Send £100 today and it might be worth £80 tomorrow. Scams and mistaken transfers are hard to recover. Regulation remains limited.
Still, for users who understand the risks, crypto can be a very low-cost payment method.
Cash
Cash has one clear benefit: no transaction fees. You pay exactly what’s asked. It’s ideal for small businesses, local shops, or splitting costs with friends.
But cash isn’t always accepted anymore. Many stores now prefer or require card payments. Carrying large amounts also poses safety risks. Some banks now limit free ATM withdrawals or charge after a few transactions.
Cash still has its place, but is becoming less practical overall.
Prepaid Cards
Prepaid cards work like debit cards but require topping up in advance. They’re helpful for budgeting or providing controlled access to money for teens, travel, or employees.
Fees are where they catch people out. Some cards charge £5 to £10 to set up, £2 to £3 monthly, or £1 per use. Foreign transactions may add more. However, some services like Wise offer prepaid cards with low fees and strong exchange rates.
Always read the fee list before choosing a card.
Mobile Apps
Apps like Monzo, Starling, and Revolut offer fast, mostly free UK transfers. Many also include budgeting tools and currency accounts. International transfers are often cheaper than banks, especially if you use standard delivery times.
Instant transfers usually carry a fee, often 1% or more. These platforms are great for day-to-day use but might not be ideal for high-value or business payments.
Conclusion
There’s no one-size-fits-all answer. The cheapest payment method depends on the situation.
For domestic shopping, debit cards are hard to beat. For sending money abroad, crypto or specialist apps often win on cost. Prepaid cards can work well for travel if you choose carefully. E-wallets are handy, but fees can sneak in. Credit cards offer speed and protection, especially when used smartly. Even casinos outside the UK still accept them, just check the terms to avoid surprise charges.
Always watch for hidden fees, including exchange rate markups, monthly charges, or interest. A little awareness goes a long way. By paying attention to the method, and not just the amount, you can keep more of your money in your pocket in 2025.
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