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Online payment gateways are essential tools for eCommerce merchants as they streamline the payment process for online transactions. In addition to a merchant account, merchants require a payment gateway to process payments securely. If you are planning to expand your business into the eCommerce space, it is crucial to choose the right payment gateway that suits your needs. In this article, we will compare and discuss the best online payment gateway providers to help you make an informed decision.
Stripe
Stripe is a fintech company that offers payment management solutions for both brick-and-mortar and online businesses. With Stripe Payments, you can accept credit cards, debit cards, and mobile wallet payments from customers around the world. Stripe provides a wide range of customization tools, making it suitable for developers who want to tailor the payment process to their business needs. It also supports Buy Now Pay Later (BNPL) payment methods like Klarna. However, less tech-savvy entrepreneurs might find it challenging to navigate and utilize all of Stripe’s features.
Cost:
– 2.9% + 30¢ per successful card charge or by payment with link
– 0.8% per ACH direct debit with a $5.00 cap¹
– BNPL: Starting at 5.99% + 30¢ for Klarna
PayPal
PayPal is one of the most popular online payment processors known for its intuitive design and user-friendly interface. Many businesses already use PayPal, which can be advantageous due to its wide user base. However, understanding PayPal’s fees can be tricky, which might be a downside for some merchants.
Cost:
– PayPal fees vary based on several factors. You can use the PayPal fees calculator to determine the charges.
Square
Square is a convenient payment gateway service that offers easy-to-use software and a mobile app for receiving payments. It is particularly popular among small businesses. Square allows merchants to set up both in-person and online payments with minimal effort and startup costs. However, Square might not be suitable for entrepreneurs looking for more advanced payment options.
Cost:
– No setup fee
– No monthly fee
– 2.9% + 30¢ per transaction
– $0.50 per delivery order²
Payoneer
Payoneer is an online financial services platform used by many top companies like Airbnb and Google. It supports worldwide transactions in over 200 countries and 150 local currencies. With Payoneer, you can send payment requests to customers who can pay via credit card, ACH direct debit, or direct bank transfer. However, Payoneer’s fees can be higher compared to other services, especially if you regularly receive card payments from non-Payoneer customers.
Cost:
– Free to set up and send/receive payments between Payoneer accounts
– 3% fee for credit card payments from non-Payoneer customers
– 1% for ACH direct debit³
Adyen
Adyen is a popular choice for international businesses as it offers global payment processing without setup or monthly fees. With Adyen, you can choose when and in which currency you want to settle. The fees charged by Adyen depend on the payment method used.
Cost:
– No setup fees
– No monthly fees
– Fixed processing fee + a fee determined by the payment method (e.g., ACH Direct Debit: $0.13 + $0.27)⁴
Verifone (Previously 2Checkout)
Verifone may not be as well-known as other payment processors, but it offers an online gateway and additional services as add-ons. It allows merchants to receive payments from over 200 countries. Verifone offers different pricing plans with various options. The 2SELL tier is the most comparable to the other options in this article and is suitable for businesses that only sell online. However, if you want the option to sell in-store, Verifone may not be the right choice.
Cost:
– 2SELL: 3.5% + $0.35 per successful sale
– Cross border fee of 2% on top of transaction fees⁵
Braintree
Braintree, owned by PayPal, offers both in-store and online payment processing. It is a simple service that accepts popular payment methods and has a sleek interface. However, Braintree lacks some advanced features compared to other payment gateways.
Cost:
– No monthly fees
– 2.59% + $0.49 per card/digital wallet transaction⁶
– Additional 1% fee when the customer’s card is issued outside of the US
– Venmo: 3.49% + $0.49 per transaction
– ACH Direct Debit: 0.75% per transaction
How do payment gateways work?
Payment gateways are services found in eCommerce platforms that authorize credit card payments for businesses online. They act as virtual doors, facilitating the secure transfer of payment information from the customer to the merchant. The payment gateway then passes on the information to the payment processor, which completes the transaction by transferring the funds to the merchant’s account.
Factors to consider when choosing a payment gateway
When selecting a payment gateway, consider the following factors:
Business needs 💼
Determine whether your business relies on online payments. If it does, you will need a payment gateway to process transactions securely. If your business operates solely through brick-and-mortar sales, a payment gateway may not be necessary.
Payment gateway cost 💵
Payment gateway services vary in price, so it is crucial to consider your budget and choose a service that offers the features you need within your financial means. Advanced customization options may come at a higher cost, so weigh the benefits against the expense.
Security 🔒
Customer security is paramount in online transactions. Choose a payment gateway that prioritizes security and provides robust measures to protect sensitive customer information. A secure payment gateway instills trust in customers and encourages them to complete their purchases.
Payment types and currencies 💳
Consider the types of payment methods and currencies your business needs to accept. If you plan to expand internationally, choose a payment gateway that supports cross-border transactions and offers a wide range of payment options.
Save on international business payments with Wise
If you run an international business, consider using Wise Business to save time and money on international payments. Wise is a smart alternative to traditional banks and offers a Business account designed specifically for international businesses. With Wise, you can send, hold, and manage business funds in over 40 currencies. You can also receive payments from eCommerce platforms like Amazon or Stripe, making it convenient for online businesses.
Conclusion
Choosing the right payment gateway is crucial for the success of your eCommerce business. Consider your business needs, budget, security requirements, and international payment capabilities when selecting a payment gateway. By making an informed decision, you can streamline your payment process, provide a secure transaction experience for your customers, and ultimately grow your online business.
