Choosing the right payment gateway for your business

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In 2021, cash is on the verge of extinction.

But we won’t use this article as an obituary for physical money. Instead, we’ll walk you through how your ecommerce business can benefit from this fact.

In 2020, digital and mobile wallets accounted for over 40% of e-commerce payment transactions globally. The use of such magnitude has made digital wallets the most popular online payment method in the world. This number is expected to rise to more than 50% in 2024.

Therefore, online payment processing is no longer an option for e-commerce businesses. It’s a mandate to retain customers and generate more sales.

What is online payment processing?

The online payment process is the process by which merchants instantly accept credit cards online. If you want to enable online transactions, you will need three softwares. Each of them plays a vital role in cashless transactions.

Let’s take a closer look:

  • Payment Processor – The payment processor bridges the gap between your bank and the e-commerce owner. It sends the user’s payment data to the merchant’s bank. Also, it deals with transaction issues like card limits and others.
  • Payment Gateway – This component acts as a point of sale device. In this case, it establishes a connection between your website and the payment processor. In addition, payment gateways act as the digital equivalent of a terminal and are used to authorize payments. Secure exchange of confidential information and data encryption is also found on this part of the software.
  • Merchant Account – A merchant account is a bank account created specifically for business purposes. In other words, it enables your online store to accept online payments.

The majority of online payment processing software packages cover all three elements. Sometimes the payment gateway and the merchant account can be paired with an external payment processor.

How it works

The step by step process of an online transaction processing is quite simple. This usually happens in just a few seconds, remaining invisible from the client side.

  1. The buyer enters the necessary data via the interface.
  2. The details of the transaction are sent to the payment gateway and the issuing bank.
  3. The bank sends a request to the payment system (Mastercard, VISA, etc.), which assesses the customer’s credit situation and compares it to the terms of the transaction.
  4. The issuing bank sends an authorization code that authorizes the payment system to execute the transaction.
  5. This code is sent to the payment gateway and from there to the merchant.
  6. If the bank approves the transaction, it goes through and the funds are debited from the customer’s account.

Now that we’ve got the basics, let’s take a look at the most popular payment gateways for ecommerce in 2021.

Best payment gateway solutions

Pay Pal

When you think of online financial services, PayPal should be the first to come to mind. This tech giant has been providing payment services and solutions to individuals and merchants since 1998.

Today, PayPal operates in over 200 countries and regions, has over 200 million registered users, and accepts 25 national currencies.

It’s no wonder then that PayPal is a globally recognized option for retailers. In addition, its versatility makes it an ideal choice for general purpose markets and boutiques.

This is how you configure the PayPal gateway on WordPress:

  1. Log into your WordPress administrator account.
  2. Click “Settings” on the WooCommerce plugin in the left menu.
  3. Choose “Order”.
  4. You will see the PayPal option under the Payment Gateways tab. Choose “Settings”.
  5. Check the box next to “activate PayPal”.
  6. Click on “save changes”.

The main strengths of this online payment system are:

  • You will need PayPal Commerce Pro to activate a credit or debit card payment option;
  • Transaction fees are 3.49% + fixed currency based fees;
  • You will pay 2.99% plus fees on the currency received for standard credit and debit card payments;
  • International transactions are cheaper with a fee of% 1.50 plus expenses related to currencies;
  • PayPal supports all popular ecommerce platforms including WooCommerce, Magento, Shopify, and others.

When it comes to the downsides, PayPal isn’t the best option when it comes to large sales. Since your transaction costs will increase with the number of sales, this may not be the most cost effective solution.


Stripe is a payment API suite that has become known for its technologically advanced features and transparent flat fees. Today, Stripe is PayPal’s closest rival with nearly 2 million active website users.

Stripe Payments helps merchants run an online business by offering them a group of innovative products. The latter saves the time and money required to set up an online payment processor.

Stripe is backed by rockstar companies including Amazon, Shopify, Uber, TED, and Lyft, not to mention thousands of other companies.

Here’s how to create a Stripe account to speed up your sales:

  1. Sign up for the service on their website
  2. Verify email address
  3. Configure your account
  4. Fill in the company details
  5. Enter banking information
  6. Establish Stripe Connection by choosing to “build a platform or market”

On the financial side of things, Stripe’s credit card processing fee is 2.9% plus 30 cents. International transactions add another 1%. You can also use other payment methods within this processor.


If you compare square vs stripe, the two payment processors share many similarities.

Much like Stripe, Square is one of the most experienced payment providers in the world. Here you can accept a large number of payment options including credit cards and debit cards.

As a result, millions of low-volume merchants are using Square’s payment platform to simplify payment processing. Square is well known for its flat fee, advanced features, and no monthly fees.

Businesses pay a flat rate of 2.6% plus $ 0.10 for swipe / strip / listen transactions, and 2.9% + $ 0.30 for online transactions.

When you factor in a powerful mobile app, reporting tools, and even free email marketing, Square is sure to become even more appealing. The payment processor is compatible with a variety of e-commerce platforms.

It supports WooCommerce, WordPress, Wix, Weebly, Ecwid, BigCommerce, and 3dcart + custom websites. Square’s biggest downside, however, is its modest service area. This payment option only supports 6 countries.


Braintree Payments is a comprehensive platform that facilitates transactions within your app or website. This is a great alternative to the classic model of tinkering with a payment gateway and merchant account from different providers.

In addition, Braintree supports both online transactions and popular payment methods, like Apple Pay. Braintree success stories feature companies like Grubhub, Yelp, and Dropbox.

Among other differentiators is the ability to create an individual merchant account. In this way, you can access the functionality of the processor in a more personalized and secure way.

In this system, you will be charged 2.9% plus $ 0.30 per transaction. PayPal and PayPal Credit payments are free. International transactions add another percent to the 2.9 percent.


Dwolla is a white label payment processor that helps your business integrate with the ACH network. The product has yet to achieve maximum exposure, but it is considered a promising alternative. In addition, it has robust security measures that secure your integration.

Dwolla is a great option for non-techies because it provides a low-code API that simplifies the complex onboarding process. Dwolla is a bank independent option with a scalable infrastructure and quote-based pricing.

The last word

Choosing an appropriate payment stream is difficult given the variety of choices today. Some of the examples of established payment gateways are Braintree, Stripe, and PayPal. We recommend that you make the right call based on sales volume, operational area, and the most popular payment option among your customers. Security and device compatibility are also among the most important pointers.

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About Matthew R. Dailey

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