Choosing the right payment gateway is crucial for any online business. The payment gateway facilitates the transfer of payment information between the customer, merchant, and payment processor. With so many options to choose from, how do you determine which payment gateway is the best fit for your website?
What is a Payment Gateway?
A payment gateway acts as an intermediary between an online merchant and the payment processor. It is the technology that authorizes credit card and direct payments processing for ecommerce transactions.
When a customer purchases a product or service on your website, the payment gateway receives the customer’s payment information, connects to the payment processor, and sends back a response indicating whether the transaction was approved or declined. It securely handles and routes sensitive customer payment data from the customer to the merchant and on to the payment networks.
Key Factors to Consider When Choosing a Payment Gateway
With countless payment gateways to choose from, it can be overwhelming trying to determine the right solution for your business. Here are some of the key factors to take into account:
Fees and Pricing
One of the most important considerations is the fees and overall costs associated with the payment gateway. Gateway fees are typically structured in two ways:
- Flat-rate pricing: This involves paying a flat monthly fee plus a per-transaction processing fee. Flat fees typically range from $5 – $30 per month, with per-transaction rates of 2-3%.
- Interchange-plus pricing: With this model, you pay a base fee per transaction plus a percentage of the interchange fees charged by card issuers. There are no monthly gateway fees. Interchange-plus pricing is often lower, but fees vary each month.
Make sure to factor in any additional charges like setup costs, statement fees, PCI compliance fees, or chargeback fees. Opting for a payment gateway with no monthly costs can help minimize overhead expenses.
Transaction Rates and Processing Speed
In addition to considering the gateway fees, you also need to look at the transaction rates and processing speed:
- Qualified rate – The fee percentage charged per transaction that is deemed lowest risk.
- Mid-qualified rate – The percentage rate applied to medium-risk transactions.
- Non-qualified rate – The highest percentage rate charged for high-risk transactions.
Processing speed is also key. Look for a gateway provider that offers real-time processing so you can deliver a seamless customer experience.
Data Security
Security is paramount when handling payment transactions and customer data. Prioritize gateways that offer top-level security and PCI compliant solutions. End-to-end encryption, tokenization, fraud screening, and chargeback protection are some key security features to look for.
Integrations
Make sure the payment gateway seamlessly integrates with your ecommerce platform, accounting software, CRM systems, and other business solutions. This ensures a unified technology stack and consistent customer data across all systems.
Reporting and Analytics
The ability to access detailed reports and analytics on transactions, fees, chargebacks, refunds and more is extremely valuable. Opt for a gateway provider that offers robust reporting tools and dashboards to gain insights into your payments activity.
Customer Support
Around the clock customer support is vital in case any payment issues arise. Prioritize payment gateways with multiple support channels like phone, email, chat, knowledge bases, and online communities.
Developer Tools
If you want maximum control and customization for your payment integration, look for gateways with advanced developer tools like APIs, SDKs, libraries and detailed documentation.
Payment Methods
You want to ensure the gateway supports all the payment methods, currencies, and global capabilities you need for your customer base. Key options include:
- Major credit and debit cards (Visa, Mastercard, American Express, Discover)
- Mobile wallet payments (Apple Pay, Google Pay)
- ACH payments / eChecks
- Local payment methods based on your business locations
Branding and Customization
For a seamless customer experience, look for a payment gateway that allows you to customize the checkout with your branding, colors, fonts etc. This helps maintain a consistent look and feel throughout your online store.
Special Features
Additional features like support for subscriptions, recurring billing, invoicing, and shopping cart integrations can optimize and scale your payments. Consider special capabilities that match your business requirements.
Top 10 Payment Gateways
Now that we’ve covered the key selection criteria, let’s look at 10 of the best and most popular payment gateways available:
| Payment Gateway | Best For | Key Features |
|---|---|---|
| Stripe | Online retailers, subscriptions | Easy integration, great API, recurring billing, strong security, Apple/Google Pay |
| PayPal | Marketplaces, online retail | Highly recognizable brand, easy global payments, extensive features, fraud protection |
| Square | Small businesses, in-person payments | Seamless POS integration, affordable pricing, fantastic support, powerful reporting |
| Authorize.Net | Medium/large businesses | Reliable gateway, virtual terminal, fraud detection, developer network |
| Braintree | Mobile apps, marketplaces | Full-stack payments platform, great SDKs, Apple/Google Pay, partnerships (e.g. Uber) |
| Adyen | Enterprise retailers | Unified commerce platform, global payments reach, advanced fraud tools, consolidated reporting |
| Worldpay | Brick-and-mortar, enterprise | Top POS capabilities, data insights, payment processing, account management |
| Dharma | Peer-to-peer payments | Excellent API, recurring payments, great for subscriptions and invoicing |
| 2Checkout | Global digital goods | 200+ global payment types, fraud tools, optimized checkout |
| Payline | Online and mobile payments | Customizable solutions, developer friendly, transparent pricing |
Top Payment Gateways Comparison
To help summarize the top contenders, here is a detailed comparison of 5 leading payment gateways:
| Features | Stripe | PayPal | Square | Authorize.Net |
|---|---|---|---|---|
| Pricing | 2.9% + $0.30 per transaction | 2.9% + $0.30 per transaction | 2.6% + $0.10 per in-person transaction 2.9% + $0.30 per online transaction |
Gateway fee + Interchange-plus pricing |
| Average rates | 3-4% | 4.4% | 3.5% | 1.5% + Interchange fees |
| International | Yes | Yes | Limited | Additional fees apply |
| Invoicing | Yes | Yes | Yes | Yes |
| Virtual Terminal | No | Yes | Yes | Yes |
| In-person | With add-on | With add-on | Yes | Yes |
| Biggest clients | Lyft, Spotify, Amazon | eBay, Facebook, Uber | Starbucks, Whole Foods | Symantec, Philips, Michelin |
Stripe
Stripe is one of the most popular payment gateways for online businesses. It supports over 135 currencies and is quick and easy to integrate. Stripe charges 2.9% + $0.30 per successful card charge. There are no monthly fees or setup costs. Stripe excels at recurring billing and subscriptions. It offers strong security and fraud protection. The Stripe dashboard provides excellent analytics and reporting. Overall, Stripe is a great all-around payment gateway for small to large ecommerce businesses.
PayPal
As one of the largest payment processors, PayPal is trusted worldwide. It offers a highly recognizable brand that customers are comfortable using. PayPal supports 25 currencies and over 200 markets enabling global payments. Pricing is straightforward at 2.9% + $0.30 per transaction in the US. Extensive fraud protection and security tools are included. PayPal offers strong capabilities for both online and in-person retail. The ability to pay with credit cards, bank transfers or PayPal balance provides flexibility. Overall, PayPal is ideal for medium to large businesses with an international customer base.
Square
Square shines when it comes to integrated POS software and hardware for in-person sales. It offers complete point-of-sale solutions tailored to everything from restaurants to retail. Square charges 2.6% + $0.10 for in-person payments and 2.9% + $0.30 for ecommerce transactions. There are no monthly fees. Square includes useful features like invoicing, virtual terminal, and appointment scheduling. Robust analytics and reporting provides valuable business insights. With fantastic support and affordable pricing, Square is the best bet for small businesses with in-store and online sales.
Authorize.Net
Authorize.Net is a longstanding gateway that focuses on reliability and security. It offers interchange-plus pricing that starts at just $25 per month plus interchange fees that average 1.5% per transaction. A virtual terminal and fraud detection tools are included. The Authorize.Net developer network makes it easy to integrate and customize payments. Accepting international payments is possible with additional fees. Authorize.net is ideal for medium and large businesses that want a proven, widely-supported payment gateway with enterprise-grade tools.
Which Is the Best Payment Gateway for Me?
The right payment gateway depends entirely on your business model, customer base, and budget. Here are some best practice recommendations based on your business type:
Ecommerce Company
For most ecommerce stores, Stripe and PayPal are excellent choices. They make accepting online payments easy with competitive rates. Stripe offers the fastest integration and best recurring billing capabilities. PayPal provides a trusted global brand that helps conversion rates.
Mobile Business
For businesses with a substantial mobile presence, options like Braintree provide seamless mobile SDKs. Stripe and Authorize.Net also have solutions catered to mobile apps and payments. Ensure the gateway supports Apple Pay and Google Pay.
Brick and Mortar Retail
If you have a physical storefront, Square is the clear frontrunner. The affordable hardware, POS software, and transparent pricing make it easy for small shops to process transactions and run their business.
Global Company
For companies selling internationally, PayPal and 2Checkout support the most global payment methods, currencies, and languages. Adyen also specializes in unified global commerce and localized payment optimization.
Enterprise Business
Large enterprises with complex needs are best served by robust solutions like Adyen, Worldpay, and Authorize.Net. Their advanced capabilities, developer platforms, and dedicated account management provide the most flexibility.
Nonprofit
Stripe and PayPal offer excellent rates and fundraising capabilities tailored to nonprofits. Many payment gateways offer discounted solutions for charitable organizations.
How to Implement a Payment Gateway
Once you select the ideal payment gateway provider for your business, how do you actually implement it? Here is an overview of the steps involved:
- Sign up for an account – This only takes minutes with top providers like Stripe and PayPal.
- Customize settings – Configure payment methods, currencies, dispute settings and more.
- Integrate into your systems – Use plugins, APIs, or SDKs to connect the gateway with your website, POS, accounting platform etc.
- Test transactions – Thoroughly test payment processing in a sandbox environment first.
- Go live – Activate your gateway for real transactions and monitor activity.
- Leverage features – Take advantage of tools like invoices, recurring billing, analytics, and more.
- Optimize – Use reports to understand your customers and transactions. Refine your configuration.
A strategic payment gateway implementation improves cash flow, increases sales conversions, and provides valuable customer insights. Partnering with the right provider sets your business up for payments success.
Conclusion
Selecting the ideal payment gateway is a significant decision that impacts your ability to accept payments from customers around the globe. Factors like pricing, security, integrations, reporting, support, and ease of use must all be carefully balanced. Leading solutions from providers like Stripe, PayPal, Square, Braintree and Authorize.net combine affordability with powerful features to meet most business needs.
The payment landscape continues advancing rapidly. Embracing digital payments is essential for future success. An optimal payment gateway solution helps you reduce friction, delight customers, and maximize conversions both online and offline. With mindful planning, testing, and optimization, your business can implement the payment gateway that expedites revenue and paves the way for growth.
