Payment Gateways help reinforce the security and encryption of customer’s sensitive and confidential information. It helps safeguard your customers against online frauds and other security threats, making it an important security layer in your e-Commerce website. They send the credit/debit card information from the website to the payment network for secure processing. It then returns the transaction details and the credit/debit card payment network’s responses to the respective site.
As per Shape Security, 90 percent of total login attempts in online shops and businesses in 2018 were illegitimate hacking attempts. This just highlights the need of having payment gateways on your e-commerce website. The payment gateway market was valued at 17.2 billion USD in 2020, and it is forecasted to reach 42.9 billion USD by the year 2026.
Tips on choosing the ideal ecommerce payment gateways
Naturally, as all popular niche attracts many players who want a big chunk of the market, payment gateways are no exception. Many credible and resourceful payment gateways can be used for your business requirements. It can often get difficult to navigate this exhaustive list and find the ideal ecommerce payment gateway for your business. Here are some factors you should consider before choosing the right payment gateway –
1. User experience
You probably have a lot of visitors visiting your site and selecting products they want to purchase as well. But most of them would abandon their shopping cart as when they are ready to make the purchase; the website halts them with many hurdles that make the experience irritating and annoying. For getting your visitors from navigating your website to making that purchase, you need to provide them with a seamless and effortless shopping experience that is frictionless and convenient.
Pro Tip: In 2021, where mobile phones are all the rage, you should check your payment gateway service for its ability to provide a better user experience on both – mobile applications and web applications.
2. Multi-currency Transactions
Since we are a global market now, people can easily buy products from all around the globe. But when the same comes to payment processing, there can be some complexities. If you are business is global, you need to process multiple currencies while keeping in mind the fluctuations in currency exchange. Hence you need to partner with a payment gateway that has support for international transactions. At times, it’s best to choose one with this support over the one that doesn’t, even if you don’t have immediate plans to expand. You would at least have the option to scale up without having to change your payment gateways if you ever develop the need to support international currencies and handling multi-currency transactions.
3. Secure Transactions
One of the primary reasons to employ an ecommerce payment gateway is to avoid security breaches. Security breaches is risky for your visitors and can leave a negative impact on your reputation. Your payment gateway should be proactive about securing customers’ sensitive data. They provide continuous updates for their security measures to keep up with the times and new threats that come along the way.
With any payment transaction, there always will be a payment fee. How the fee will be charged and how much will be charged will depend on the payment gateway you end up deciding on. There are generally four types of fees you’ll come across –
- Setup Fees
- Transactional Fees
- Monthly Fees
- Membership Fees
Before looking for a payment gateway platform, first, work on your budget and expected sales revenue. Having these inputs will help you shortlist your ideal ecommerce payment gateway options efficiently.
5. Recurring Billing
If your ecommerce model works on subscriptions, having a recurring billing feature is a must. It allows you to set up an automatic billing cycle for your subscription-based customers. Hence if you are a business that operates on a monthly, quarterly and annual billing cycle, you need your payment gateway to support recurring billing. For this, your payment gateway software should have integration capabilities with your invoice software.
6. Active Customer Support
No matter how feature-packed your payment gateway must be, if you can’t seek help when it crashes, it could cause you major sales and customers revenue. Finding an ecommerce payment gateway service that has 24/7 or responsive customer support is a must for emergencies.
Top 6 ecommerce payment gateways
Now that we have discussed what payment gateways are, understood their importance, and understood the factors to assess an ecommerce payment gateway, we should look at the top 10 ecommerce payment gateways available in the market to find the right fit for your requirements.
Stripe is one of the most popular ecommerce payment gateways. It is one of the fastest-growing company that might catch up to PayPal in no time. Stripe was launched in 2010 and is currently valued at $95 billion, according to business insider.
It is a cloud payment gateway that helps businesses accept and manage online transactions globally. It provides full-stack solutions to process online payments and has many impressive features like a custom UI toolkit, consolidated reports and embeddable checkout.
Features of Stripe
- Support for multi-currency payouts
- Collaboration Notes
- Mobile Customer Interface
- Clean Canvas
- Payment Options Flexibility
- Embeddable Checkout
- Custom UI toolkit
- Open-source plugin
- Dispute Handling
- Consolidated Reports
- Unified Payout
- Accounting Integrations
- Financial Reporting
- Roles and Permissions
Stripe Pros and Cons
|Better development resources and support compared to other payment processors.||No automatic tax support|
|Very developer-friendly||Processing rates slightly on the expensive side compared to other legacy ecommerce payment gateway solutions.|
|No PCI compliance hassle or technical workarounds needed to process payments||Dependency on documentation for areas of API necessary for a specific use case is high.|
|Thorough documentation and support||Limited geo-reach|
Popular websites using Stripe
2. Amazon Pay
Amazon Pay has the support of having the huge brand name of Amazon. However, it is not the only reason to make it our top 10 ecommerce payment gateways list. Amazon Pay is proving to be an excellent choice for hosting payment gateways for small and medium scale enterprises. Once you create your Amazon Pay Merchant account, it gives you access to one of the most sophisticated fraud protection services. However, this service is only limited to the UK, US and Germany. It supports an onsite checkout option that enhances the customer experience. Amazon Pay is a simple API driven ecommerce payment gateway that has helped many ecommerce websites since its inception back in 2007.
Features of Amazon Pay
- Automatic payments
- Merchant Website Integration
- Customer Identity
- Fraud Protection
- Inline Checkout
Amazon Pay Pros and Cons
|Wide range of acceptance across multiple merchants||High processing rates can be expensive for high volume merchants|
|Has pay-as-you-go billing with no long term contracts needed||Numerous reports about withheld funds and account closures|
|Brand recognition||Your customers need to make an Amazon account to make use of Amazon Pay|
|Easy to integrate into your business website||The signup process can be lengthy and complicated.|
Popular websites using Amazon Pay
- Play better
- Serious Shops
- Adam & Eve
Authorize.net (est. 1996) is a developer-friendly API, and it has immense flexibility for providing a customized and seamless user experience. It is also considered one of the most secure ecommerce payment gateway. It has an advanced fraud detection suite that prevents chargebacks and fraudulent transactions. There is no limit dollar amount of transactions and added capabilities for quick fund transfer. Authorize.net also has many add-on features, including a simple checkout system, fraud prevention and more. You might want to consider that they charge a fixed monthly charge in addition to the transaction fees.
Features of Authorize.net
- Advanced Fraud Detection Suite
- Recurring Billing
- Online Payment
- Retail Payment
- Mail/Phone Payment
- Sync for Quickbooks
- Customer Information Manager
- E-check processing
- Virtual Terminal and Batch Upload
Pros and Cons of Authroize.net
|Broad support for multi-currencies||All-in-one solution can be confusing|
|Robust security and advanced anti-fraud features||High flat-pricing rates for optional merchant accounts|
|Month to month billing with no long term contracts||More on the expensive side|
|Excellent customer support and service|
|Predictable flat-rate pricing|
|All in One||Payment Gateway only||Enterprise Solutions|
|Set up fee||No setup fee||No setup fee||Custom Tailored Solutions more companies that process more than $500k per year|
|Per Transaction||2.9% + 30 cents||10 cents, daily batch fee 10 cents|
Popular websites using Authorize.net
- Basic Outfitters
- Blue Door
Skrill is a UK based ecommerce payment gateway designed to cater to both – customers and businesses. It was launched on June 17, 2001. Skrill enables you to make an international transaction with support for over 30 different currencies. It also provides pay for products and services wherever you are by using a dedicated mobile app. Active users also get to request a master card and use it to pull back any assets or buy products from their location.
Key Features of Skrill
- Email Transactions
- One Place Data
- Support for over 30 currencies
- Free Account
- Credit Card Transactions
Pros and Cons of Skrill
|Easy and quick to open an account||Low/Unresponsive support|
|Accepts bitcoin payments||High payout fees via Visa cards|
|Worldwide payment possible using the only email address||Prepaid cards only available in Europe|
|Skrill payments can also be used at merchants that don’t support Skrill payment.||Complex fee structure|
Popular websites using Skrill
- Civilized Cosmetics
2Checkout is a third-party processor that focuses more on online processing. You get a free payment gateway with every 2Checkout account. They provide a robust structure and facility for processing capabilities to process payments from over 200 countries worldwide. 2Checkout offers a wide umbrella of features and services, but it also has the added premium to get all those extras for your requirements. Though there are different plans with different offerings, with 2Checkout, you get the following services/features.
Key Features of 2Checkout
- Take payments in 200+ countries
- Recurring billing
- Shopping cart integration
- Checkout pages hosting by 2Checkout or the option to integrate it into your website
- Fraud Protection Tools
- Online Store Builder
Pros and Cons of 2Checkout
|No monthly fees||Tedious and lengthy approval system|
|Low transaction fees||Complicated and poor documentation|
|Purpose||An easy and simple way to sell globally||Develop and boost your subscription models||All in one solution for selling Digital Goods globally|
|Per successful sale||3.5% + $0.35||4.5% + $0.45||6.0% + $0.60|
PayPal is one of the oldest and most renowned ecommerce payment gateways in the industry. It was created as a digital wallet back in 1999 and then acquired by eBay in 2002. It is one of the most versatile payment processors. PayPal claims that offering their service as a payment option can help merchants increase their checkout conversions by 44%. Including PayPal as a payment option is also fairly straightforward and easy. You just need to create an account and add a ‘Pay by PayPal’ button on your website.
Key Features of PayPal
- Credit Card Reader
- Mobile Card Reader
- PCI Compliance
- Virtual Terminal
- Shopping Cart
- Express Checkout
- Inventory Tracking
- Barcode Scanning
- Bill me Later ®
Pros and Cons of PayPal
|Records Transactions||Charges you for receiving money|
|Safely Encrypted||Can freeze your account without warning|
|Mobile Friendly||Additional bank fees|
|PayPal is a hot target for phishing and scams.|
Popular websites using PayPal
Wrapping it up!
These are the top 6 ecommerce payment gateways you can use to provide your visitors/customers with a secure, easy and efficient user experience, motivating them to purchase more often from your site. Make use of the one that best fits your needs and fits your budget well. An efficient ecommerce payment gateway can impact your ecommerce business significantly.