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Best Payment Gateways for eCommerce and Online Stores

What is a payment gateway?

A payment gateway is a way of sending and receiving payments for online purchases. It’s a software that processes the payment and facilitates the transfer of money from the customer to the merchant. It can carry out payments from credit cards, debit cards, eCheck (ACH), and even cryptocurrencies.

Pros of using multiple payment gateways

There are several benefits of using multiple payment gateways for your online store, which we’ll discuss further down below.

Increased conversions

Online shoppers comprise different demographics and each have their own preference of paying for online purchases.

According to an article by Business.com in 2016, Millennials (born between 1981 and 1996) prefer using mobile wallets and PayPal while Gen X’ers (born between 1965 – 1980) prefer using their credit cards.

As the last step of the sale, offering preferred payment methods allows you to increase your conversions because more shoppers are more likely to buy from your store.

Expand your store’s reach

Thanks to the internet, your online store can reach customers beyond your city, state, and country.

But it also means that these customers have their preferred choice of payment method, which may be totally different from what your other customers use. Some of the prominent payment gateways in each region are PayPal for North America, Europe, and Australia, MPesa for Africa, and Alipay for Asia.

Having multiple payment gateways allows you to sell to more customers because it’s easier for them to buy from your store.

Be flexible

Can one of your payment gateways handle subscriptions that automatically charges your customer? What if one payment gateway stops working when you most need it?

These are some scenarios that are likely to happen in an eCommerce business and it only means that one payment gateway won’t meet all your needs.

Having multiple gateways allows you to be flexible so you don’t lose valuable sales because of technical issues. Your customer will also appreciate it if they can pay you through another gateway because of any technical issue on their part.

Build trust with your customers

Any online shopper in their right mind would like to feel safe even if they’re giving away sensitive information.

Offering multiple legitimate payment gateways makes you look professional in the eyes of a customer. Since they see that you offer a safe way for them to pay, they’re more likely to trust you.

Make better business decisions

You can see trends, patterns, and other data about shoppers from the transactions that pass through the payment gateway. For instance, you can see which items are bought by whom or when are certain items in high demand.

All this data available to you from the payment gateway allows you to make better-informed decisions for your business because you can now spot liabilities and potential money-makers.

How does it work?

A payment gateway connects the customer, the retailer, and the bank that issued the debit/credit card.

When a customer pays for their order, they are brought to a secure checkout page where they can input their card number and other important but sensitive information. This information is encrypted for security then sent to the bank through the payment gateway.

The gateway communicates with the issuing bank, who then approves or declines the transaction. The gateway then transmits the bank’s response (which is also encrypted) back to the retailer.

The bank’s response is decrypted once it reaches the retailer and if the transaction is successful, the order can now be fulfilled. 


Types of payment gateway integration

There are several ways to integrate a payment gateway in your online store and they all have their own pros and cons.


This type of payment gateway uses a third-party service called a Payment Service Provider (PSP), which hosts the collection of customer’s details and encrypts sensitive details for security. PayPal is one example of a hosted payment gateway.

It works by directing customers to the PSP page where they input their payment and contact details. Once the payment details are verified, it proceeds with the transaction. It then brings back the customer to the online store on a page with corresponding payment notification data.


  • Fast set-up
  • A lot of customers are familiar with this type
  • User interface can be customized
  • Secure transactions


  • Merchant has little to no control of the payment process

This method doesn’t use a third-party service to collect and encrypt customer data and the merchant is responsible for data security and technical support. A few well-known examples of this type are Shopify Payments and TradeGecko Payments.

It works by collecting the customer’s payment and contact details within the merchant’s website, which sometimes require a specific format. These details are then sent to the payment gateway URL using a hash key or a secret code for security. Once the payment is complete, both the merchant and the customer are notified.


  • Allows the merchant to debit the payment
  • Merchant has control of the payment process
  • Provides a customized user experience


  • Data security can be costly for the merchant due to lack of technical support

This type uses an application programming interface (API) or HTTPS queries service that processes the payment at checkout and can also be implemented for smartphones and tablets. However, the merchant is still responsible for data security by purchasing SSL certification and complying with PCI DSS rules.

It works by asking customers to directly enter their credit or debit card information in the store’s checkout page. These details are stored in the store’s website and can be accessed directly by the API. It then notifies the customer once the transaction is complete.


  • Merchant has control of the payment process
  • Provides a customized user experience
  • Versatile


  • Data security is an additional cost for the merchant
Local bank/Direct

This kind simply directs the customer to the bank’s website where they can enter their payment information there. After that, they are brought back to the store’s website to complete the checkout process. 

Refunds or cancellation of orders, however, have to be done by the merchant where they have to deal with the customer directly.


  • Fast set-up
  • Simple one-time payment structure


  • Basic features only
  • Doesn’t usually process returns and recurring payments

Factors to consider when choosing payment gateways

Choosing which payment gateway to use for your business is a major decision because there are so many factors to look into.

Let’s take a look at them.

Compatibility with your business

It’s important to know if a payment gateway is compatible with your business because some service providers just don’t support high-risk businesses like online dating platforms, gaming/online casinos, travel agencies, and even forex traders.

Payment gateways who are willing to work with these businesses require a higher level of fraud detection and overall risk management in order to ensure customer safety.

Thankfully, many payment gateways have a list of businesses they support. This is the most important factor to consider and the others won’t matter if a payment gateway won’t even work with you.


A certain payment gateway may suit a particular business more than others because it has the features to meet their needs. For instance, if you’d like to ship to international customers, the gateway should be able to accept different credit cards, debit cards, and currencies from other countries.

Some gateways also have other features like electronic invoicing, email reminders for clients, and refund management.

Figure out the features you need and the additional ones that would particularly benefit your business at a reasonable cost.

Preference of your customers/target market

Online shoppers prefer certain payment gateways for a myriad of reasons. Some find a particular one convenient while some use another because they feel safer when buying something online. Some would even abandon their purchase if they have to register for an account for another gateway.

So at the very least, make sure that your store has the payment gateway/s that most of your customers prefer so you don’t miss out on those sales. On top of that, streamlining the payment process for them only increases the chance of repeat business.

Your business location

Payment gateways will ask you where your business is incorporated because incorporation rules differ from country to country. That means that payment processing would be different for an American business and a UK business.

Fortunately, major providers have both European and US operations, making it easier for online stores to serve foreign customers.

Costs and service agreement

Aside from your merchant bank account and website, the fees of a payment gateway are also part of the needed costs for an eCommerce business. For example, PayPal fees are broken into commercial payments fees and additional fees like currency conversion and chargeback fees. 

Most gateways also charge you according to the level of service they provide you and you can be charged additionally when going over the service agreement.

Be sure that you have the exact figures for these fees. Also see which services you’re most likely to pay for as you’re using the payment gateway.

Compatibility with your eCommerce platform

A payment gateway should be able to integrate seamlessly into your eCommerce platform so your customers won’t be discouraged by a clunky payment process. Fortunately, most service providers can do so with popular platforms like Shopify and WooCommerce.

If your store has a mobile version, it’s also important that your payment gateway works with mobile devices because a lot of online shoppers today make purchases from their phones. Many shoppers nowadays use digital wallets like Apple Pay and Samsung Pay as well as mobile payment apps because of their convenience.


Even if you’re the business entity, a few customers actually try to rob you. Some of them might use stolen credit cards or they’ll complain of not receiving their order even if they actually did.

That’s why it’s important to prioritize security when considering a payment gateway. Their ability to protect you from fraud — even before it happens — will help you avoid unnecessary costs in the long run.

Also check if your payment gateway complies with information security standards like the PCI-DSS and SSL so you don’t compromise any sensitive information.

Technical support

It’s important to consider the technical support from the payment gateway because technical issues can also cost you valuable sales. Trying to fix these issues yourself by searching forums online and speaking with other merchants takes away valuable time.

Check how fast they can respond to queries and if they actually help in solving the problem. If the gateway can provide live technical support especially during working hours, you can resolve technical issues faster.

Cons of using multiple payment gateways

Unfortunately, more payment gateways in your online store also creates unique setbacks. It’s important to be aware of these so you know what to expect when implementing multiple gateways.

Complicated integration

Each payment gateway integrates differently into a particular eCommerce platform and developing a custom set-up that smoothly integrates them all into your store takes a significant amount of time and money.

More expensive

More payment gateways means you have more fees and upkeep costs to think about. There are monthly fees as well as the people you need to hire to manage your payment gateways.

Underutilized transaction volume limits

The volume limits for some gateways may also be underutilized since it’s common for payment gateways to price their services by the volume of transactions. You might also not qualify for volume discounts that service providers offer for their customers who reach certain sales milestones.

Time-consuming refund process

If a customer requests for a refund, there are a lot of records to go through to trace back his or her payment. It takes a lot of time to do and it’s more prone to errors for businesses with higher transaction volumes.

Best payment gateways for eCommerce

There are many payment gateways available to eCommerce businesses today and some may be more suited to your business than others. Here’s a short list of the best ones out there.


PayPal is the most used payment gateway in the world with more than 270 million active accounts from around the world. As the most popular digital wallet in the world, a store with a PayPal option simply converts more customers at checkout. It offers easy integration and convenient services like online invoicing and credit card payments over the phone.

Also Useful: PayPal Fee Calculator


Stripe is a highly customizable payment gateway where it offers many APIs to set up subscriptions, crowdfunding, on-demand marketplaces and many more. It supports more than a hundred currencies and also offers lower card processing fees for European merchants.


Square is great for businesses with brick-and-mortar and online storefronts because they don’t charge monthly fees for adding it to a merchant’s website. They also integrate easily into more than 15 major eCommerce platforms.


Authorize.net is the digital payment gateway of Visa and they can cater to stores (both online and brick-and-mortar) of all sizes. It supports all major credit cards (Visa, MasterCard, etc) and digital payment services like PayPal and Apple Pay.

Google Pay

Google Pay is the digital wallet from Google and it integrates easily with other gateways like Stripe and Square. Its API can be added quickly to major eCommerce platforms and it can also be used for cashless payments (using NFC) in brick-and-mortar stores.

Apple Pay

With practically every person in the United States owning an iPhone, Apple controls more than half of the mobile vendor market. Customers simply have to complete a transaction with their fingerprint or facial scan after connecting their bank account.

It can also be used for NFC payments in brick-and-mortar stores and Apple doesn’t charge additional fees to merchants who accept Apple Pay.


2Checkout offers instant payment abilities and a quick subscription set-up, which is useful for businesses that sell digital services. It’s also available as a plug-in for major eCommerce platforms and can process many currencies from around the world.


Adyen is used by recognizable companies like Uber, Microsoft, and Spotify to handle their customer transactions and accepts more than 250 payment methods and 150 global currencies. It also features analytics for tracking customer data and a built-in risk management tool for detecting fraud.

Payment Depot

Payment Depot is ideal for large businesses because of their membership-based pricing model. They also offer fixed processing fees, which can be as low as $0.05 to $0.15 per transaction compared to $0.3 + 2.9% from other popular gateways.

About the Author:

Jay Manangan is the outreach and partnership manager at FreightPros and Grit PH

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