To an untrained eye, all of the best payment gateways may seem absolutely identical. But the truth is, there are significant differences. While they all offer online payment services, things like fees, integration options, and merchant account offers often vary by provider and affect your bottom line. Here, we’ve laid out the evaluation methodology we rely on when reviewing and scoring payment gateways. These metrics will make it easier for you to make your pick.
A merchant account is a specific type of bank accounts that enables businesses to accept and process card payments. A merchant account is usually unique to your business. Opening a merchant account is an important step in the lead-up to selecting the best payment processor. The application process involves bank underwriters looking into your credit and payment history and that of your business. However, some payment gateway providers offer to open a merchant account for you, saving you time and effort but for a certain price. Payment processor merchant account providers also differ in whether they provide you with a unique merchant ID or act as a third-party payment processor instead of you.
Payment processing companies can charge several types of fees for their services. The most significant monthly fees you’ll incur are the transaction fees. As a rule, top payment gateways charge per-transaction fees. The fees largely depend on whether the processor is providing you with a merchant account or if you already have one. For businesses with their own merchant accounts, transaction fees are usually just slightly higher than interchange fees – unavoidable transaction costs charged by credit card networks. If the processor is providing a merchant account for you, then the fees can be significantly larger, between 1.5% and 3.5% of the total transaction plus a fixed processing fee.
Usually, the best payment processor for e–commerce solutions offers both types of pricing. Conventional wisdom says that businesses with a smaller transaction volume can stick to third-party processors, as they won’t lose too much money since the fees are percentage-based. However, once your transaction volume increases, you’re better off with a merchant account and/or fixed fees in order to avoid hemorrhaging money with percentage-based fees.
Aside from transaction costs, some processors may charge setup fees, monthly fees, and termination fees. The key to picking the right online payment processing provider is reading the fine print, seeing all the fees involved, and calculating potential costs based on your current transaction volume.
Currencies and Countries Supported
Even the best online payment processors are limited when it comes to global coverage and the currencies supported. While there are payment gateways that support a huge number of countries/currencies, you’d be hard-pressed to find a provider that has truly global coverage. As such, currency and coverage are an important factor when deciding which processor to go with.
In general, businesses in the US, UK, and other parts of Europe are almost always fully covered. Usually, if your business is located in a country the payment processor supports, you’ll be able to accept payments from anywhere in the world. However, even the best online payment processor has a limited number of currencies it can accept transactions in. Additionally, processors might accept different payment methods. Aside from credit and debit cards, it might be worth checking whether the processor accepts payments from various e-wallets, direct deposits, etc.
The main purpose of payment gateways, aside from providing payment processing capabilities, is to seamlessly integrate into your e-commerce website or app. Slow complicated payment processes will annoy customers and may negatively impact your sales. There are different integration methods offered by online payment solutions. One of the most simple integration methods is the pre-built checkout page.
The best payment gateway providers offer checkout pages that are available for use immediately and require no coding experience. The majority of providers also offer API integrations, the creation of customized payment pages, and a variety of other integration solutions. When it comes to integration, you should base your choice on the needs of your business and the resources at your disposal.
Compliance and Security
It goes without saying that payment processing involves the handling of extremely sensitive customer data. Therefore, it’s imperative that both your site in general and payment gateways, in particular, employ the necessary security measures that will safeguard personal and financial user data. The best payment gateway providers need to adhere to the so-called Payment Card Industry Data Security Standard. PCI represents a unified data security standard that needs to be implemented by all entities that process credit card payments. While PCI compliance is not required by federal law, individual states have local legislation that directly refers to PCI DSS.
The standards for PCI compliance are managed by the PCI Security Standards Council. This body, comprised of major credit card brands, administers the PCI Standards and works to enhance global payment account data security. Failure to comply can lead to financial penalties and can even get you banned from accepting credit card payments. Therefore, it’s crucial that any best online payment gateway you choose is fully PCI compliant.
Best Payment Gateways for E-commerce and Dropshipping
Which payment gateway is cheapest?
If you already have a merchant account, PayPal offers the most affordable payment gateway. For high transaction volume businesses, Payline is the best option, while Stripe, Braintree, and Authorize.net will cost small-medium merchants roughly the same.
Which Payment Gateway is best in UK?
PayPal and Stripe are some of the best payment gateways in the UK.
Is there any free payment gateway?
No. There aren’t any companies that will process credit card payments and provide you with a merchant account for free. In case you already have a merchant account and a processor, you can get a payment gateway with a minuscule transaction fee from PayPal, Braintree, or Authorize.net.
How much does a payment gateway cost?
The best payment gateway companies charge 2.9% + $0.30 per transaction if they’re acting as a merchant account provider/aggregator for you. If you already have a merchant account, then you can get a payment gateway for a $0 to10 monthly fee and $0.10 transaction charge.