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Payment gateways are necessary for any business that wants to accept online credit card payments. The technology circulates financial data around to the necessary entities to authorise payments and move money from a customer to a merchant. When choosing the best payment gateway, it’s important to consider pricing and fees, integrations, security, and other factors:
Pricing and fees
The cost factors for payment gateways are the subscription fees and the payment processing fees. The subscription fees are the monthly fees that the payment gateway charges, and the payment processing fees are the fees that the payment gateway charges for each transaction. Some payment portals don’t charge a monthly fee and charge a higher transaction fee instead.
You can expect to pay £20 to £40 per month for a subscription fee and around 2% plus 20 pence per transaction for the payment processing fee. Anything outside these parameters tends to have more or fewer features than average.
When considering pricing, you should also factor in the following:
- Do they offer a free trial?
- Do they have any setup fees?
- Do they have any hidden fees?
- What’s the minimum monthly fee?
- What’s the chargeback fee?
- What are the refund fees?
- What are the international transaction fees?
Types of payment gateways
There are three main types of payment gateways:
- Redirect: The payment gateway simply takes a customer to a payment processor, like PayPal or Stripe, to process the transaction
- Hosted (off-site payment): The customer makes a purchase on your website or at your retail location, and the payment information goes to the payment provider’s servers for processing. This is how Stripe and Square POS systems operate
- Self-hosted (on-site payment): The entire transaction happens on your servers.
Integrations and customisations
Your payment gateway should be able to integrate with your shopping cart, accounting software and any other software you use for your business. This will allow you to automate your accounting and save time.
You should also consider whether the payment gateway offers any customisation options. For example, you may want to be able to add a logo or change the colour scheme of the payment page. This can often be accomplished using an API, though not every gateway offers this option.
Security
When choosing a payment gateway, security should be one of your top considerations. You want to make sure that the gateway uses the latest encryption technology to protect your customers’ credit card information from being stolen.
The payment gateway should also be PCI-compliant. This means that they follow the Payment Card Industry Data Security Standard (PCI DSS), which is a set of security standards that all businesses that process credit card payments must follow.
Payment methods
Another thing to take into account is what payment methods are supported by the chosen gateway. In addition to credit cards, you may want to accept payments via PayPal or CHAPS. You may also want to offer customers the option to pay by invoice.
On-site or off-site transactions
Some payment gateways allow you to process transactions on your website while others require customers to be redirected to a separate page to enter their credit card information.
If you want to process transactions on your website, you’ll need to choose a gateway that offers an on-site payment solution. If you don’t mind redirecting customers to a separate page to enter their credit card information, you can choose either an on-site or off-site gateway.
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