eCommerce industry is experiencing tremendous growth as customers spend 60% of their shopping time online. Payment gateways play a crucial role in this ecosystem - on average, a website uses 3-4 different payment gateways so as to offer customers multiple payment options.
eCommerce payment gateways have grown increasingly numerous to meet consumer demands. If you need assistance choosing the appropriate gateway for your business, let's make it easy: this article presents an exhaustive list of payment gateways with their benefits for eCommerce website development.
What Is a Payment Gateway?
Payment gateway software serves as an intermediary between an online store and their bank and credit card payment. Popular examples of such gateways are PayPal, Stripe, and Authorize.net.
E-Commerce Payment Gateways: Types and Examples
Payment systems build trust between customers and ecommerce business owners. Each payment gateway uses different methods to simplify payment for both parties involved - consider these when selecting one:
- Hosted Payment Gateways - A hosted payment portal allows for easier integration by custom e-commerce website development companies as it redirects checkout pages onto its servers instead of being hosted directly by them. In essence, it acts like outsourcing.
- API-accessible Gateways - Merchants who do not want to share customer payment details with third-party servers may opt for API-accessible payment gateways, as these allow more privacy while being flexible enough for custom e-commerce development work. These payment gateways may require extra custom development work as they may also share customer details with the server hosting the payment information.
- Direct Gateways provided by Payment Processors - This gateway offers maximum power, as it can be integrated directly into websites or apps. Unfortunately, integration may require expert development and coding skills.
- Platform-centric gateways - Shopify is an example of such an environment; merchants need only create an account, manage stock levels, and use their existing payment gateway.
Why Payment Gateways Are Necessary for Ecommerce?
Payment gateways play a vital role in custom ecommerce solutions, providing online businesses with secure payment processing of a wide array of online payment methods and credit card transactions.
They ensure money transfers safely between business accounts and customer accounts, protecting both parties involved.
Businesses would need to manually process transactions involving credit cards, which could take significant time and be susceptible to human errors.
Customers tend to trust businesses that use secure payment gateways because this protects their sensitive financial data.
Payment gateways can be an invaluable asset to online businesses in ensuring safe and seamless online transactions.
Businesses can now accept payments online more securely and efficiently, reducing friction while helping their business expand and scale.
How do payment gateways operate?
Gateway payments take only seconds to process. Following is the phase of payment gateway operations.
- Payment Initiation: When customers enter payment information on a merchant's custom ecommerce website, a payment portal is activated.
- Validation and encryption of payment data: The payment gateway protects sensitive payment data by encrypting it between banks for both parties to the transaction.
- Authorization: Once payment data has been transmitted to a payment gateway, either an authorization code will be sent back to the merchant website or an error message will be displayed indicating it was declined.
- Fund Settlement: If your payment has been approved, your funds will be settled between bank accounts quickly.
- Payment Gateway Additional Services and Fees: Payment gateways charge fees for their services; fees can range from a percentage of transaction value or flat rates for each transaction; plus, they provide services like chargeback management, fraud detection, and reporting.
- Ecommerce Payment Gateway: Functionality and Features
As the owner of an eCommerce site, all it takes to integrate payment gateways is selecting and installing one that best meets your needs and then adding it to your e-commerce website solutions.
An intuitive setup wizard makes the process seamless. After the setup has been completed, customers can submit payments. An eCommerce payment gateway can be set up in three steps.
Customers pay for their purchase using mobile, tablet, or website and enter their payment information securely through a payment gateway; merchant accounts process these details and notify customers if the payment was successful or not. Afterward, an SMS notification informs the customer if the payment was successful or otherwise.
Once funds have been processed and deducted for processing fees, they are returned to the merchant.
Here are 2023's Best Payment Gateways in E-commerce Sites
Below is a selection of some of the most widely-used payment gateways currently available for eCommerce platforms.
PayPal
You are probably familiar with PayPal as an effective payment gateway for online stores and merchants alike due to its widespread adoption, reliability, and trustworthiness.
PayPal was introduced as an eCommerce payment platform in 2002 and currently provides service in 203 countries worldwide. Merchants incur transaction charges per sale; however, for buyers using it is completely free.
PayPal stands out from other payment solutions due to its strong brand recognition, simple setup process, and secure payment details. Businesses typically select PayPal because of its ease of setup and secure payment details - these benefits allow your business to store funds with them for spending or purchases; the checkout process itself is user-friendly as well.
PayPal's strong anti-fraud department has blocked numerous accounts that appeared suspicious based on their transactions. Although one of the more costly payment gateways available, PayPal remains popular with businesses and startups alike due to its affordable fees (4.44% plus $0.30).
Authorize.net
Authorize.net, one of the oldest payment gateways, has been operating since 1996 and is considered an industry standard for secure, fraud protection payments with easy checkout, customizable integrations, and additional subscription features. Often referred to as the "King" of online payments!
Authorize.net's user-friendly ecommerce website design encourages more transactions to close rather than be abandoned due to poor UI/UX (which can occur with lesser-recognized payment processors). Authorize.net makes integration of payment gateways easy into websites.
Stripe
Stripe, the US-based payment gateway, is used by businesses worldwide. Some of its largest customers include some of the industry's leading names.
Complex to set up than PayPal but ideal for SaaS solutions and mobile applications.
Stripe is currently available in 21 different countries, and processing of payments may take up to seven days for initial processing.
Stripe has numerous features. Accept debit and credit card payments without incurring monthly or setup fees, accept cryptocurrencies such as Bitcoin through an online payment gateway, set recurring payments with ease, and provide customers with built-in APIs for their customers to utilize.
At present, this service is only available to customers located within the U.S.A. and U.K.
Stripe charges the same 2.9% + $0.30 fees for transactions as PayPal.
SecurePay
SecurePay was first launched in 1997 and initially provided online shopping carts. Over time, however, SecurePay expanded into mobile payments, credit card services, and the integration of third-party shopping baskets into its system.
SecurePay's Insights feature is one of its standout offerings, providing merchants with an insightful comparison between their own online reputation, popularity, social media activity, and current revenue with that of competitors' businesses.
SecurePay is an ideal payment solution for startups and small businesses, providing all payment options, easy registration, and integration into shopping carts as well as trial plans allowing online payments.
All payment plans vary in terms of pricing depending on the total transactions processed each month, with SecurePay is compatible with ApplePay, EMV, and large-scale payment transactions; it charges 2.4% online and 45% per transaction plus $395 annually in e-commerce payments.
Fondy
Fondy, a multi-currency payment flow management system, was officially unveiled in 2019.
Fondy provides all payment services, from accepting payments to paying out third parties, making Fondy one of the most reliable payment service providers available today, trusted by both startups and market leaders alike.
Fondy is an international payment processor offering payment processing in 150 currencies and 300 payment methods.
Fondy is an international company with offices located throughout Great Britain and Ireland.
Amazon Pay
Amazon Pay is an effective payment gateway for small and mid-sized businesses (SMBs). It features an easy checkout experience similar to that found on Amazon and comes complete with all of its own merchant tools and payment capabilities.
Fraud protection is one of the key features enabling SMEs to conduct transactions safely.
Amazon Pay provides users with an API-driven platform that enables them to tailor their transaction process.
This advanced feature allows SMEs to tailor the payment experience according to their specific needs and preferences.
Square
Square stands out by accepting both online and offline payments - making it ideal for companies that own retail stores as well as selling online.
Square is ideal for businesses that want to expand beyond an online store. Square's payment service works similarly to PayPal and Stripe, making integration seamless into your e-Commerce platform.
Square is one of the leading eCommerce payment gateways, as it enables merchants to accept both online and offline payments from any device. Square partners with many leading eCommerce platforms, including Wix, WooCommerce, OpenCart, Magento, and WordPress; charges $60/per location/per month with a 2.5% fee plus a $0.10 fee per swipe are additional costs associated with Square.
Custom Payment Gateway
Finding the ideal payment gateway can be challenging, despite all of your available options. In such instances, a custom payment gateway could provide the ideal solution during custom eCommerce development. While creating one may prove challenging at first, the rewards far outweigh any associated difficulties.
What are the advantages? By customizing a payment application to suit your business model and keeping control over its implementation, you can customize an experience tailored to meet the needs of larger businesses without incurring processing fees - something which would otherwise cost extra for them to achieve.
Final Thoughts
A custom eCommerce website integrated with a payment gateway is more likely to succeed, while protecting and securing it is also of equal importance. Make sure your ecommerce option suits both your needs and is feasible - leaving room for upgrades later if necessary.