As a business person, to accept credit card payments from your customers, you’ll need a payment gateway. But there are numerous options to settle on from, with bleeding-edge start-ups pitting their wares against global behemoths, it is often difficult for small businesses to understand where to start from. We’ve put together an easy guide to payment gateway providers, supplying you with some insight into the large names and helping you out with the way to choose the best payment gateway for your business.
Choosing a payment gateway for your business is the same as learning the best way to grow your business. In an effort at simplicity, some payment systems may risk becoming barebones solutions that would struggle if your business scales.
For many businesses today, having to choose a payment gateway depends on the requirements and operational type of the business. For online businesses for instance, the proper payment gateway for eCommerce can make a big difference in the early stages of operations and in years to come.
In this article, we’ll explore the Six (6) best online payment gateways for small businesses which will help your business ensure your customers experience a hitch-free payment option.
What is a payment gateway?
A payment gateway platform is a secure tool employed by businesses to validate the payment details of their customers, ensuring they’ve enough funds in their account to finish the transaction process. In simpler terms, it’s the service that permits both online and offline businesses to authorize credit card payments. While payment processing may be a relatively complex process, payment gateways are liable for three main areas: collection, transfer, and authorization.
The first step to a payment gateway is, the customer’s credit card details are collected. Secondly, they’re transferred to the payment processor. And finally, once payment has been accepted by the customer’s issuing bank, the payment gateway authorizes the transaction. Yes, it’s that easy
Payment gateways permit users to make card payments online or in-store, which suggests that credit card payment is processed online and offline, and also works with Point of Sale (POS) processing in-store.
Most payment gateways have simple ways to charge card, with fees being charged to the owners account ordinarily at anywhere between 1.00%-3.7%, with no monthly fees. However, if you’ve got a business account, then processing fees are reduced depending on interchange fees, which are typically around 0.10%-20% per transaction, and are available with monthly fees.
For low volume sales, payment gateway is going to be the foremost effective option in the short-run, because the monthly fees can eat income more than processing fees. Once sales reach a good number, then it becomes cheaper to pay a monthly fee for merchant processing with interchange fees.
You’ll find that most of the best payment gateways offer both options, or another advantage above the other. This might be anything from reduced processing fees on credit cards, to direct integration into accounting software.
Benefits of getting a Payment gateway for your business
Below are a number of the advantages of getting a payment gateway for your business
1. Implement Recurring Billing
If you’ve got a client on a subscription service, you’ll be ready to collect payment automatically using an auto-debit mechanism rather than billing them monthly. This streamlines your collections system and also puts money in your account sooner, thereby making account management easier for your customers.
2. Payment can be taken over the phone, on your website or via text message
A payment gateway grants you the permission to gather payments from your customer who isn’t physical at your location.
Why does this come in handy? For instance, a customer forgets their credit card when it’s time to pay. They will call you later once they get home and provide you their payment details in order for you to bill their card.
You could even have an option on your website that permits your clients to pay for services and care. Without a payment gateway, you wouldn’t be ready to collect these funds remotely.
And finally, you’ll send text messages to your clients by setting up a feature called Text to Pay. You’ll customize these messages and supply a secure link that clients can use to pay you instantly.
3. Payment is secured
The responsibility of handling sensitive credit card and banking information is handed off to a third party that’s better at keeping and securing data. The third-party company focuses on securing data, and that’s it. Against this, you’re skilled at providing a service, not necessarily ensuring your financial systems are encrypted.
Payment gateway use sophisticated encryption means to make sure sensitive data are secured. This protects both the customers and the business from fraud.
The other significant difference between employing a third-party company and your bank is that these companies are insured, so if something goes wrong with the transaction, they’re on the hook.
4. Serve a larger Customer Base
As a business person or organization that renders service, you don’t necessarily need to limit your customer base to locals. If you’ll provide virtual services, then having a payment gateway will enable you to gather funds online from anywhere around the world.
5. Transaction Processing are accelerated
With payment gateway, funds are distributed to your account faster than manual processing. And, since you’ll collect payments even when your customers aren’t at your location, you don’t need your customers sending you a check or coming to your office to make payment. You’ll take payments over the phone, allow transactions on your website, or send a text with a secure link to get funds that are due.
6. Doing business is made convenient
Also, since your customers do not need to be present to make payment to you, your “store” will be mostly open 24 hours daily and seven days a week. You’ll virtually eliminate chasing down customers for payment or playing phone tag as you are trying to convince them to return to your office to pay up their balance.
Key points to take note of when choosing a payment gateway platform
1. Flexibility of the Payment gateway platform
Is the payment gateway platform flexible enough to scale as your business grows?
2. The Pricing
Is it required to be set up monthly?? How about the transaction fee?
3. The supported payment methods
Will your customers have an easy checkout experience and? If so, they’re going to be back!
4. Customer service experience
If something goes wrong, will your customers be able to get help instantly?
5. Security level of your payment gateway
Will your customers trust your business? are you able to make sure that their card data is in safe hands?
6. Integration made simple
How much effort will would like to place into the payment gateway integration?
Choosing a payment gateway for your business
It’s clear that there are many excellent options when it involves online payment gateways. When you’re deciding which provider to go for, there are several issues you ought to consider, which includes:
Speed – How quickly does it get to start accepting payments? Some payment gateway providers, like PayPal and Stripe, allow you to check in and get started immediately. In most cases, you’ll have to wait before your business account is set up.
Flow of Payment – Most payment gateways offer you a few of various options when it involves customizing your payment flow, which includes a site with an integrated payment form, iFrame, or an Escrow system. Go with a payment provider that it’s flow of payment works within your site’s existing infrastructure.
Cost – There are many different costs you would like to know of, which includes set-up costs, administrative costs, and transaction costs. Typically, payment gateways cost around $500–$1000 to set up, with about $60–90 monthly fee and 15p + 2% per transaction. If you accept many transactions, high costs aren’t such an enormous deal, but if you get a lower volume, you ought to avoid payment gateways with high monthly fees.
In the long run, the best payment gateway for your company depends on your needs and existing infrastructure of your business. But by making the proper choice, you’ll have an instantaneous impact on your customer’s experience, and also get to boost your company’s profitability and income at the same time.
How does a payment gateway work?
The payment gateway process is comparatively simple and easy—especially once you invest in the right platform or service. Below is a breakdown of how it works:
Firstly, the customer submits an order. This will be either online or offline store, in which case you’d be submitting the order for them.
Next, data is encrypted via browser. Every customer’s information is securely sent from their browser (if online shopping) or yours to the merchant’s web server via SSL (Secure Socket Layer) encryption.
The business then sends transaction data to payment gateway. This is often also done via SSL encryption.
The payment gateway now sends the transaction to the payment processor. These transaction details are sent to the payment processor related to the business person’s acquiring bank.
The payment processor then sends the transaction to the card association. Samples of card associations include VISA, Verve and Mastercard.
The credit card-issuing bank then verifies the transaction. The message is received by the bank and then the bank sends a response code for the transaction if approved. If rejected, the bank will provide an evidence, like insufficient funds or other issues.
- A response code is sent to the payment processor by the issuing bank
- The code is then sent to the payment gateway by the payment processor.
- The payment gateway sends the code to the business person and cardholder, thus completing the transaction.
Even with the many steps involved, the whole payment gateway process only takes just a couple of seconds. It’s both a secure and seamless way to accept payments from customers, whether or not they deal with your business online or face to face.
6 Best payment gateway platforms for your business
Below is our top pick for the best payment gateways for your business:
Paypal Payment gateway
This is one of the best eCommerce payment gateway platforms designed to assist people and corporations to send and receive payments without providing financial information. It’s one among the top-rated payment gateways that permits its users to send or receive payments across the world with just email address instantly.
It is very easy to shop with or sell using your mobile phones on any business website or app. Paypal operates in over 200 countries and it supports widely used credit cards like Visa, Mastercard, Citibank, American Express, and other banks around the world.
Features of Paypal
- Compliance with PCI
- Tracks Inventory
- Shopping cart
- Shows Virtual terminal
- Credit card reader available
- Easy and Express checkout
- Mobile card reader
- Barcode scanning
- Online invoicing
- Bill me later option
This is a cloud-based payment gateway platform that assists businesses and individuals to simply accept and manage online transactions anywhere within the world. It makes provision for complete solutions to process online payments and this payment platform offers great features like custom UI toolkit, embeddable checkout, consolidated reports and far more.
Stripe is a robust payment gateway that makes sure there is a smooth movement of funds in your business while connecting with the user interface that permits you to quickly identify fraudulent activities because of the great security, manage revenue and drive sales globally. It also provides an open API that helps to integrate with your business ecosystem.
Features of Stripe
- There is a mobile customer interface
- Accepts multi-currency payouts
- Clean canvas
- Collaboration notes
- Payment options
- Embeddable checkout
- Custom UI toolkit
- Dispute handling
- Open-source plugin
- Consolidated reports
- Accounting integrations
- Unified payout
- Financial reporting
- Roles and permissions
This is a payment gateway that’s a part of the PayPal network. It’s well designed to make the payment process easier. It offers Ecommerce tools for global businesses, accept payments and enable ecommerce option for its users. It’s tools and features assist companies to scale their businesses worldwide.
Braintree operates in over 35 countries worldwide. It also supports 130 currencies and users enjoy the advantages of faster and secure transactions. This ready-made sleek UI supports multiple cards or for PayPal transactions.
- Drop-in UI
- Supports over 120 currencies
- 24/7 online support
- Customized checkout workflow
- 2-day payout
- Dynamic instrument panel
- Braintree value
- Easy data migration
- Guaranteed uptime
- Advanced fraud protection
- Easy repeat billing
This is a global payment gateway that gives strong infrastructure and security to make sure smooth, fast and secure transfer of transactional data. This payment gateway platform handles the routing of transactions, from a web setting without software installation, simply by swiping your card in the machine.
It has a business base of over 350,000 around the world. It helps to simply accept payments securely by providing a streamlined experience which enables scaling and a number of other value-adding features. It’s a totally integrated electronic credit card payment system that accepts and processes payments from other bank accounts through the user’s website or the Authorize.Net’s virtual terminal.
- E-check processing
- Retail payment made easy
- Virtual terminal and batch upload
- Mail/phone payment
- Recurring billing
- Manages customer information
- Sync for quickbooks
- Advanced fraud detection Suite available
This is a popular global payment gateway that permits businesses to simply accept online payments from buyers around the world. It’s many features and localized payment options assists both businesses and customers to get their payment process streamlined.
It’s secure and reliable, with over 45,000 businesses using 2Checkout payment gateway globally. It supports over 6 different payment methods, 10 languages, and in over 75 different currencies in global markets.
- Data security standard with level 1 PCI
- Offers multiple payment options
- Recurring billing
- Customized checkout options
- Integration with over 95+ online carts and systems
- Create customized subscription plans
- Support – 87 currencies
- Support – 15 languages
- Account updater
Choosing the proper payment gateway can revolutionize your business and it’s important for every business to possess a payment gateway especially in our world today where everything is now online.