Payment Gateways are the systems that process online payments. They can take credit card information from customers and then send it on for processing by a merchant or payment processor, such as PayPal. Payment gateways also allow merchants to accept multiple forms of payment including cash, checks, debit cards, gift certificates, prepaid cards, etc. The most common form is accepting credit cards through an e-commerce website.
Benefits of using a Payment Gateway
Some benefits of using a payment gateway are that they provide an additional layer of security for your business and allow for faster processing times. They can also offer more stability to know how much money is going into your account since their transaction fees are normally less expensive than other methods such as PayPal or Credit Cards. However, there are many types of payment gateways so it may be worth doing some research if you’re unsure which one is suitable for your needs.
Best Payment Gateways Providers
1. PayPal– Ease of use, low fees.
2. Google Checkout– Great if you have a website as it allows users to check out on your site with only one click. However, it comes with slightly higher transaction fees which may not suit everyone’s needs.
3. First Data Merchant Services–All transactions are processed through your merchant account and processed directly and instantly by the issuing bank and have the lowest transaction fee (2.7%).
4. NMI/NMIi This is the preferred gateway in Australia and Mainland Europe. It uses the normal internet banking systems in these countries to process transactions.
5. CyberCash Not to be confused with CyberSource, it is extremely expensive (3-7%) but has almost instant transactions because of its relationships with banks worldwide.
6. 2CheckOut Accepts all major credit cards, PayPal, Amazon Payments, Google Checkout, and many other types of payments – including taxes and shipping charges. Transaction fees range from 2% to 4%.
7. Merchant Warehouse This company allows you to choose your own payment processor so you have more flexibility in choosing what you pay for your services.
8. Paysafe Group This allows you to accept credit cards, PayPal, Skrill, Neteller, and bank transfers.
9. 2Checkout They support all major credit cards, PayPal, Amazon Payments, and Google Checkout. Transaction fees are between 2% to 4%. However, you get free credit card terminals for your online payments if your average transaction value exceeds $1000 per month. You can also choose your own payment processor so you have more flexibility in choosing what you pay for your services.
10. Affiliate Payment This company allows you to accept all major credit cards, PayPal, and ACH for a low transaction fee of 2.2%.
11. Buyer Credit This company is based in Spain and allows you to accept PayPal and all major credit cards with a low transaction fee of 1.7% plus 0.25 EUR per transaction.
12. Billpoint Billpoint is a French payment gateway that allows you to accept all major credit cards, PayPal, bank transfers, and checks with a small percentage of 1% for transactions under 50 EUR and 1.5% on those over 50 EUR.
13. Authorize.Net Authorize.Net is one of the most widely used payment gateways in the world, allowing you to accept all major credit cards, Visa, PayPal, and bank transfers. However, be warned that their fees are very steep at 4% for in-person transactions and 7% for online transactions.
14. Payline Data– This is the preferred company in Australia and processes all transactions directly through your merchant account to your bank account in one business day for free. The only cost you will incur is a 2% fee if you want to pay by credit card or 3% if you use another payment form such as an ACH transfer or direct deposit to your bank account.
15. CCBill– This is a very popular company that allows you to accept all major credit cards, PayPal, and bank transfers with minimal transaction fees of 2% or 3%.
16. WorldPay– This company has been around since the 1960s and has been one of the most reliable companies around.
17. Merchant International Group They support all major credit cards, PayPal, bank transfers, and checks for a flat fee of 2.95%.
18. Master Card Merchant Services This company allows you to accept all major credit cards with a very low transaction fee of 1.14% plus 0.25 EUR per transaction (standard rates apply for transactions under 50 EUR).
19. Eway This company processes all transactions through your Merchant Account in one business day. They provide very competitive transaction fees of 2% + 0.30 EUR per transaction.
20. OKPay This payment gateway has nearly instant payments because their representatives are very close to the banks in their country which gives them access to the quickest payment methods at the lowest cost.
21. GetResponse This company allows you to accept all major credit cards, PayPal, and direct deposits for a low transaction fee of 2%
Many of these smaller companies allow you to accept multiple forms of payment such as Visa, MasterCard, American Express, and Discover for a whole range of different transaction fees.
Gateways available depending upon your needs:
Authorizes transactions based on the customer’s credit card number. This type of gateway allows you to create one account per customer with which they may make purchases. It does not require any additional security measures beyond what the bank requires for its own transaction authorization system. Authorization gateways are commonly found in online stores where there is no need to store sensitive data about each individual purchase. An example would be Amazon Payments.
Processes chargebacks when a customer disputes their charges. Chargebacks occur when someone believes he has been overcharged or charged incorrectly. In these cases, the buyer will dispute his order and ask the seller to reverse the charges. A chargeback occurs after the sale but before the goods have shipped. When this happens, the money goes back to the original purchaser who must pay the bill again if he wants to keep using the service.
Credit Card Terminal Gateway
Accepts credit card numbers directly into a terminal connected to a computer network. These terminals are usually located at retail locations like grocery stores, gas stations, convenience stores, pharmacies, restaurants, etc., so that people can use them without having to go home first. Credit card terminals do not provide any other services besides taking credit card details. They cannot allow sales nor capture funds.
Direct Debit Gateway
Allows users to set up recurring monthly direct debits via a web interface. Direct Debits are electronic transfers made automatically from a company’s checking account to another person’s account. For example, a utility provider might choose to issue a direct debit every month for the same amount to cover all electricity bills for a household. Customers can manage these direct debits themselves within the portal. Examples include Paypal and Stripe.
EFT stands for Electronic Funds Transfer.
It is the method banks used to transfer money electronically between accounts. Banks often offer free EFT services to businesses and consumers alike. Most major US banks now support EFT.
Credit Cards for Online Merchants
For credit cards to be used online either American Express or MasterCard must issue them. There are many good reasons you should use the credit card systems through one of their online merchant accounts rather than your bank account.
The first reason is that the issuing bank processes the transactions so you do not incur any charges on your bank statement.
The second reason is that you will receive your payments much quicker as the banks are not as bogged down as they normally are.
According to recent studies, it takes a person 1.7 days to receive a payment from a regular merchant account but only 0.8 days with a credit card merchant account.
The ultimate reason is that anyone can start accepting credit card payments right away after going through an online evaluation process by the company providing the service. The only question you need to answer is whether you want to use one of the larger companies such as PayPal or if you would rather use one of the smaller companies that might offer better rates or more services that suit your needs.
Merchant Account Providers
Merchant Accounts are financial agreements between a business owner and a third party called a “merchant acquirer” or simply an MSP. Merchants typically sign contracts with MSPs because they want access to more than just credit card processing; they want full control of how their finances work. Some examples of things included in a typical contract are:
- Access to banking relationships
- Control over fees associated with processing payments
- Ability to track spending patterns
- Reporting tools
- Security features
- Fraud protection
- Other requirements specific to the industry
Conclusion After reviewing your choices for payment providers, you should have a pretty good idea of which would be best for your company. The most important thing to remember is that you should always start with the lowest rates offered and then tweak the rates if additional fees or charges are needed for your business needs. You can always increase the fees later on but it is very hard to reduce them once they are in place.
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