What Is An Ecommerce Payment Gateway?
A payment gateway is a hardware-software system that ensures the acceptance of transactions on the store website and the automatic transfer of payment data from clients to the acquiring company. Essentially, the gateway creates a bridge between the site visitor and the organization that processes transactions (for instance, a bank, an e-money operator, etc.). However, it is important to emphasize that an e-commerce gateway only serves as a connecting link and does not interact with money itself, unlike the payment system.
It is difficult to overestimate the importance of the payment gateway for ecommerce. Thanks to the gateway integration, the customer experience of paying for a product or service online is as comfortable and smooth as possible. In addition, the business gets full control over the payment process and security guarantees.
Among the main gateway service benefits are:
- Transaction security due to the latest data encryption principles;
- Savings for the seller: the entire software and hardware parts of the process are facilitated by the gateway;
- Settings flexibility for individual business characteristics;
- Only the acquirer receives the buyer's data; it is not available to either the seller or the gateway.
Types Of Payment Gateways In Ecommerce
There are various types of ecommerce payment gateways offering different conditions for ensuring transactions in your online store. For the gateway to integrate well and bring you the desired result, you need to pick the most suitable option, considering the characteristics of your company. To be able to stick with a suitable variant, you need to know the features of each type:
- On-site Payments. With this type, the payment occurs on the same site as the checkout. The on-site purchase attracts customers because of the convenience and allows businesses to control the client's checkout experience completely. However, ecommerce businesses should consider that control comes with responsibility and involves more effort.
- Off-site Payments. This ecommerce gateway enables clients to complete the order process on the familiar store site but conduct the actual transaction process on the off-site gateway-supplied page. This type deprives the seller of full control over the users' payment experience.
- Redirects. This gateway type means redirecting clients away from the store website to a new website or app where they can complete the payment. Sometimes, clients can be confused by the change of the site and even cancel the order. However, if redirecting is fast and clients see a reputable payment gateway, clients tend to trust such a gateway.
Ecommerce Payment Process Breakdown
To fully understand what a payment gateway in ecommerce is, you need to figure out the mechanism of its work. Here's a brief description of each stage of the payment authorization and verification provided by the gateway technology:
- Order placement. The client browses your website, then saves items to the cart, and moves on to the payment process.
- Payment details entering. The client provides their payment information (for example, credit card details) to the gateway, which is immediately activated.
- Transaction authorization. The gateway sends the received details to the processor to verify the details with the client's bank or card issuer.
- Transaction approval. If the payment info is authorized and the client's solvency is confirmed, the processor informs the gateway that the payment has been approved. It, in turn, notifies the store about this.
- Order confirmation. After the payment approval, the store confirms the order and informs the client.
- Settlement. The processor settles the transaction with the merchant.
- Reconciliation. The company reconciles the transaction with the order.
6 Best Payment Gateways For Ecommerce
It will not be difficult for you to opt for the best payment gateway for ecommerce, if you choose from a selection of top gateways on the market. Check out the proposals of industry leaders to pick an option that will satisfy all your company needs and meet individual requirements.
Skrill
Annual fee: $10
Processing fee: 0.00% (bank transfer); 1% (Global payment methods); 2.5% (Paysafecash); 5% (Paysafecard)
Skrill is an efficient ecommerce payment gateway that supports over 40 currencies and local and global banking methods (Visa, Maestro, Card JCB, Discover, etc.). The service has a user-friendly interface and provides a separate mobile app. It is a good choice for a business that plans to enter the international market.
The main benefits of Skrill are easy integration, fraud protection, PCI compliance, chargebacks, and global prevalence.
Stripe
Monthly or annual fee: No regular fees
Processing fee: 2.9% + $0.30
Stripe is a common choice of sellers on platforms like Facebook Marketplace in the UK, Canada, and Australia. The service is an excellent payment gateway for ecommerce since it facilitates WooCommerce integration. Stripe supports multi-currency transactions (over 100 currencies) and major credit cards.
The gateway is well-known for dynamic 3D security, recurring payments, and progressive reporting tools.
Apple Pay
Monthly or annual fee: No regular fees
Processing fee: 2% + $0.30
Apple Pay is the leading contactless e-commerce gateway. This service is rightfully considered one of the simplest and fastest, as clients can make payments with one click directly from their smartphones. The payment gateway supports MasterCard, Visa, Union Pay, American Express, Suica, and QUICPay.
Apple Pay offers easy checkouts and advanced payment security measures, including fingerprint readers, facial identification, and biometric locks.
Amazon Pay
Monthly or annual fee: No regular fees
Processing fee: 1.95% + applicable taxes
Cross-border processing fee: 3.9%
Amazon Pay is a provider of an ideal ecommerce payment solution for merchants who sell on Amazon. The clients of this marketplace can easily pay for your goods/services using their accounts. However, this gateway offers something that attracts any merchant: WooCommerce integration plugin, global acquiring, recurring payments, invoicing, and batch processing.
The service supports payment integrations that are effortless to implement. Also, Amazon Pay works with prominent world card networks, e-wallets, and multiple local payment methods.
PayPal
Monthly or annual fee: No regular fees
Processing fee: 3.49% + $0.49
One of the main advantages of PayPal is its widespread usage in the world (it is available in over 200 countries). Because of the very high processing fee per transaction, PayPal is not beneficial for companies with a large volume of transactions. So, it has become a popular e-commerce payment gateway for small companies and Internet stores with low-volume transactions. The Seller Protection Program helps merchants avoid losing funds due to chargebacks, claims, or reversals.
PayPal attracts with simple setup, availability of multiple payment solutions (Visa, MasterCard, American Express, etc.), PCI compliance, and an inventory tracking feature.
Authorize.net
Monthly fee: $35
Processing fee: 2.9% + $0.30
Authorize.net is one of the oldest ecommerce payment gateways that is currently accessible in over 30 countries and processes payments in more than 10 currencies. The program presents multiple integration options, including different extensions for simple integration with WooCommerce. Authorize.net is well-known for its enhanced fraud protection, high-class reporting features, digital invoicing, and easy checkouts.
Things To Consider When Choosing The Solution
To be able to fully evaluate an ecommerce payment gateway and make sure that it suits your company, you need to focus on several basic criteria when analyzing the service. Approach the choice of gateway responsibly because it will affect the customer experience of your audience and the reputation of your business.
Cost And Fees
Analyze your average income, frequency of transactions, growth prospects, etc. Compare the received data with the fees offered by the gateway. As you can already tell from our review of the best ecommerce payment gateways above, all services take a very different approach to fees. Some platforms set regular commissions (yearly fees), while other companies charge different processing fees depending on the payment method used.
Sometimes, gateways offer customized pricing plans. This diversity makes it easier for businesses to choose the most profitable fee structure for them. The most common set of fees includes setup, monthly/annual, and transaction fees. Make sure that a gateway doesn't provide any hidden fees.
Safety And Security
The financial security of both your business and your clients depends on the reliability of the chosen gateway. Ecommerce transactions involve the processing of sensitive financial data that must be protected from third-party access. The best payment gateways for ecommerce offer security measures such as SSL encryption, tokenization, fraud prevention tools, two-factor authentication, KYC policy, and others.
Convenience And Multi-currency
User-friendliness of the platform interface and ease of service implementation are essential for comfortable and fast work. In addition to the purely technical ease of using the ecommerce payment gateway, it is important to pay attention to the number of supported currencies and banking methods. The more options are offered, the easier it will be for you because your company and clients will have more freedom in choosing payment opportunities. What is more, the support of multiple currencies allows you to enter the international market easily.
Reputation
The trustworthiness of any service is tested over time and confirmed by the number of successful projects. A good reputation of a payment gateway for ecommerce is acquired not only thanks to high-quality tools and technical innovations. It is also formed due to the stability, efficiency, and interaction of the platform with clients (24/7 technical support, quick adaptation to innovations in the financial sector, individual approach to each project, etc.).
How To Integrate A Payment Gateway In Ecommerce Website
The ability to accept online payments is a fundamental requirement for any ecommerce business. However, the process of actually integrating a payment gateway into your website can seem daunting. In this paragraph, we will provide an overview of the key steps involved in incorporating a payment gateway into an ecommerce platform.
So, let's get familiar with the main stages of the ecommerce payment gateway integration:
- Register a merchant account. In fact, this may not be necessary: it all depends on the gateway you choose. However, most services still require businesses to have a merchant account. Some platforms even offer account functionality along with the gateway service, which simplifies the setup process.
- Obtain API keys. Once you set up the account with the gateway, you need to obtain unique identifiers (API keys) that connect your online store to the payment gateway service. They also assure safe communication between a gateway server and your company's website.
- Integrate the service into your site. Features of the integration process depend on the selected gateway and the structure of your online store. If you have a WordPress site and the gateway offers a WooCommerce plugin, then the process is greatly simplified. If not, then you need to manually add a special code to your site to establish a connection with the gateway.
- Test the payment gateway for ecommerce. Before your clients can access the gateway, you must ensure that it is working properly. Most services provide demo versions or a “sandbox”, which allows business owners to go through the ordering and payment process, making test purchases.
Overall, investing time into properly integrating a payment gateway to your ecommerce website will maximize sales revenues, enhance user experience, and demonstrate your commitment to safeguarding sensitive customer data. The returns easily justify the initial integration effort.
Final Thoughts
Integrating an ecommerce payment gateway into your business platform is one of the best and simplest ways to boost your company. The gateway service will automate and accelerate all stages of payment, which will greatly relieve your burden, since you won't need to control everything manually. Additionally, the gateway will significantly advance your clients' payment experience and increase their loyalty to your brand.
