Online payment gateways, which to choose?
When starting an eCommerce shop there’s so much to do. It’s easy to forget the obvious stuff. You know, Like “How you’re going to get paid.”
Known as “Payment Gateways” your eCommerce site will need one. Well, if you plan on getting paid at least. But what are your options and which is the best choice for you?
What is a Payment Gateway?
In its purest form, a payment gateway is a service that handles payment requests on your behalf.
They work as a middle man by conducting security checks, contacting banks and storing funds until it’s safe to withdraw.
Why do I need a payment gateway, can’t I do it myself?
Yes, in theory, you could handle it yourself. But with so many laws and legislation surrounding payment processing, it’s not worth it.
The costs for creating a payment system, and ensuring it’s PCI compliant is excessive. With good reason, fines for not complying can be in the 10’s of thousands of pounds. Trust me it’s not worth it.
What payment gateways are out there?
You’ve likely heard of a few, PayPal, WorldPay or you could have seen an advert for Square recently.
Each is a payment gateway which at its core does the same thing, Payment processing. But they all have different costs, for the reasons of competition, ease of use and selling tactic.
So, which payment gateways are worth looking at?
My personal favourite takes the top position. Stripe offers everything a starting or established eCommerce business needs while being developer-friendly.
- Payment Processing (Duh)
- Refund Processing
- Top level certificates for compliance regulations
- Constant updates to support new technologies
- Support for all major cards worldwide.
- ApplePay & GooglePay support
- Dispute handling
- Financial reports and insights
- On-site payments (customers don’t leave your site)
- It integrates with every major platform (WooCommerce, Shopify, Magneto, PrestaShop… everything).
- Developer friendly
- Easy to use client dashboard
- It’s one of the cheapest – 1.4% + 20p
The best choice for setting up recurring payments. GoCardless allows you to create real Direct Debits, as well as perform credit checks.
It’s perfect for monthly payments and is what I use for my services.
- On-going payment processing (via direct debits)
- Payments protected under the Direct Debit Guarantee
- Quick, set up for customers
- The most you will ever pay per transaction is £2
- It’s the cheapest I’ve found, 1%
GoCardless is a great choice for expensive products or monthly payments.
The most widely known payment gateway, PayPal is a big name and “well trusted?” it’s common to adopt it purely because “people use it”.
- Used by a lot of people
- Easy integration with a lot of platforms
- Pay by card
- Pay by PayPal account
- Support for most major cards
- It’s possible to get a card reader
It’s one of the more expensive options costing between 3.4% – 1.9% + 20p per transaction.
We’ve seen on our own client’s sites that PayPal makes up less than 25% of purchases. Does this mean they’re losing their customer base? let me know in the comments.
Which payment gateway should I use?
Like anything, it’s all up to you and your use case. It may be that WorldPay contacted you and offered a “great deal”. Be sure to do your own research and make an informed decision.
But if you’re looking for my personal opinion. Stripe is the best all-around option for taking payments online. GoCardless is best for expensive or recurring payments. While PayPal is a “good” option for building trust.
I mentioned WorldPay, and there are others like Barclaycard, SagePay, GlobalIris. Each of their systems seems antiquated and difficult to use. Not to mention they don’t advertise their transaction fees. So, use them if they convince you, but be wary there are better options.
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