How to choose a payment gateway

Accepting payments from customers can be difficult. Find the right WooCommerce payment gateway to suit your business.

Customers can purchase your products easily by using the right payment portal .

Let’s look at how to find the best solution, so that you can concentrate on what is important: opening your new store.

You can jump straight to our recommendation. WooCommerce payments are simple and exclusive to WooCommerce stores.

How payment gateways work

Although you may be aware that you require a gateway, it is possible to not understand how or why they work.

Let’s take a look at it. First, is a payment gateway. It allows stores to securely request payments from their customers. Once a customer clicks on “order”, it takes care of all the rest.

Your gateway

  • Verifies the billing information of each customer.
  • Each customer’s payment method is authenticated.
  • Approves requests allow your store to issue confirmation numbers.
  • This is the most important thing: you get paid!

Take a deeper look at our payment solutions getting began guide for a more detailed explanation.

Now that you know the “why”, let’s see how to choose the right payment gateway.

You have two choices: classic or modern.

All gateways required store owners to apply for a merchant account, a bank account that allows direct receipt of credit cards payments. Without a merchant account, the payment gateway could not send money to your bank.

Many payment gateways don’t need merchant accounts. These payment gateways take funds from customers’ credit or bank accounts, verify them and deposit them into your account.

Let’s be clear: Payment gateways that require merchant accounts are “classic”, and those that do not require one “modern”.

Learn more:

Modern payment gateways are easy to set up, but they charge higher fees

PayPalStripe both are examples of modern payment gateways that don’t need merchant accounts.

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These gateways have the greatest benefit: you don’t need to make any changes to your bank account or do anything else to get started. These gateways can be integrated with your store quickly.

There are however two drawbacks.

  1. Modern payment gateways often charge higher per-transaction fees that traditional gateways. These fees are not usually a problem for smaller businesses, but they can become more significant as your business grows and processes more transactions.
  2. Modern gateways may send customers to another site to make payments, which can reduce conversions.

Classic payment gateways are more complicated, but easier for larger stores

WooCommerce supports many classic payment gateways including Authorize.Net, and WorldPay.

Classic payment gateways are more complicated than modern ones. They are more difficult to set up and require technical knowledge. Merchant accounts are also required.

To choose a traditional payment gateway, you will need to locate a bank that has merchant accounts and apply. They are not offered by all banks, and approval times vary by organization. This can mean that the setup process can take up to four to six weeks.

As mentioned, the per-transaction fees charged for traditional gateways are usually lower than those for modern ones. It’s important to consider how much you will pay over the long-term, and whether the hassle is worth the fees.

While you can always change gateways later, has its own set of considerations.

Take into account the advantages of integrated gateways vs hosted.

Payment gateways are similar to eCommerce platforms which offer both hosted and self-hosted options. They can also be hosted off-site, or integrated into your store . Both options have their advantages and disadvantages, as you probably know.

Hosted payment gateways

Hosted gateways direct your customers to the payment processor platform to enter payment information. This setup has the greatest perk: the offsite provider takes care of all PCI compliance as well as data security . This means you have one less thing to worry about. Major hosted processors will provide information on their security and compliance methods, if required.

However, there are potential drawbacks. Some countries don’t trust off-site payment processors, while others prefer them. Before you choose a hosted gateway, it is important to understand the opinions of your audience.

It can also be confusing to direct customers away from your website. could potentially affect your conversion rates, especially if they don’t trust the gateway.

The bottom-line: Hosted gateways are simple to set up, are great for new stores and can increase conversion rates. However, customers may not be familiar with the processor or abandon their efforts after being directed off site.

Payment gateways integrated

A payment gateway integrates with your eCommerce website through the gateway’s API. This has the greatest advantage: customers don’t have to leave your eCommerce store to enter payment information or submit orders. It’s seamless and smooth.

The downside to this is that you will need to integrate with the chosen gateway. WooCommerce supports many payment gateways, WooCommerce payments is one example. Your chosen option will likely work seamlessly. However, if your chosen one is not supported by WooCommerce out of the box, you may need to program it to work properly.

You are responsible for compliance with all applicable laws and regulations in your country, including the PCI Security Standards. Your customers could be at risk if your store is not secure.

The bottom line: API-integrated gateways offer seamless ordering, but are more time-consuming and difficult to set up and can add additional responsibility to your plate.

Reduce your options by starting with pricing

You should now have an idea of the type of gateway that you prefer. It can be modern, classic, integrated, or hosted. You can now start to narrow down your choices, starting with the price.

Nearly all payment gateways have fees. These fees are usually per transaction fees or monthly usage fees. You may be charged one or both of these fees by the gateways that you are evaluating. They may also scale their fees depending upon how often you use them.

Although it may not seem like much, a three percent transaction fee could be significant if you are selling high-end goods or large quantities.

Accept recurring payments? Automatic billing support is available

Consider whether your business offers subscriptions and memberships. Make sure the gateways you are considering allow recurring payments. Your customers will have to renew manually every month if they don’t support recurring payments, which can be very frustrating.

To help you narrow down the list of payment portals that accept subscription payments, we have created a table.

Gateways can also be marked to indicate whether they allow payments to be changed or canceled without restarting the subscription. This is useful for stores that plan to offer multiple tiers.

Check out the complete buying process

You can narrow down your options by paying attention to how each gateway appears in your store and the experience it offers your customers.

Consider the steps it takes for a customer to go from their cart to the confirmation screen. They might leave if you ask too much.

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Many payment gateway providers have demos on their websites or are happy to show you one if you request. It is a great way to see how the process works in a store such as yours. What screens will customers see and what information they will need.

Integrated gateways offer greater flexibility than hosted ones. You can choose one-page or multipage checkoutstyle field fields and many other options — effectively eliminating any barriers to purchasing.

Do not be afraid to get started

You may not want spend too much time or money setting up a payment gateway when opening a store. That’s fine. WooCommerce payments is a great way to get started. It’s easy, reliable, secure, and can grow with your business. It is completely free to set up and costs only 2.9% + $0.30 per transaction.

It’s an integrated gateway that allows customers to pay directly from your website and enjoy a seamless, secure checkout experience. Apple Pay can be used to offer one-click checkout, which will speed up the process and make it easier for customers who are familiar with your platform.

Contrary to many payment gateways that can take up to several days to transfer funds into your bank account, you can access your money in minutes.

The best thing? The best part? You can manage everything using the same dashboard you already know. You can view payments, track cash flow and issue refunds directly from your website.

Acceptance of payments is an important step

Pre-launch is not complete without adding a payment gateway. Once you are ready to accept payments you can move full speed ahead, knowing you have chosen the right payment gateway for you.

You can find more information and a comparison chart here. For more information on payment solutions , please read our getting start guide. You can also download WooCommerce payments free if you want an easy and quick option that checks all the boxes.