How to choose a payment gateway for your project?

The rapid development of e-commerce became possible due to payment gateways, services which enable quick and simple online transactions. How to choose a payment gateway that will perfectly match the needs of your business? This article is answering all the questions.


Do you remember your last purchase on the internet? Was it a brand new tablet, a pair of cute slippers or a cooking book?

Internet purchases are growing in popularity every single day. We prefer online shops to physical ones because they are fast, offer a wide variety of products and a very convenient process for buying and paying.

Just a few years ago online shopping wasn’t as easy and quick as it is today. The main issue was a complicated payment process. Online transactions were still a dream. To pay for the online purchase the buyer had to print the receipt, go to the nearest bank within certain operating hours and wait for the seller to receive money, which usually took several days.

Payment was a real challenge and made everyone think twice before buying something on the internet.

Today, online payments occur in just seconds and are even easier than sending an SMS. This has spurred the enormous growth of online purchases. In addition to that, every third buyer admits to having made an impulse purchase online at least once. The obvious reason for this is the ease and speed of the buying and payment process.

The growth of e-commerce became possible due to payment gateways - the services that make online purchases instant. If you already own, or are about to create an online shopping project, the right gateway will be a crucial contributor to your success.

Not all payment gateways are the same. Compatibility, payment methods, supported currencies and different fees… How to choose a payment gateway to fit your needs? This article will answer your questions.

What is a payment gateway and how does it work?

According to Wikipedia, a “payment gateway is a merchant service provided by an e-commerce application service provider that authorizes credit card or direct payment processing for e-businesses, online retailers, bricks and clicks, or traditional brick and mortar.” In other words, it is the middleman between buyers and sellers, and is responsible for the quick and secure transfer of money.

The payment gateway encrypts the sensitive data that are sent between the buyer, the seller and the bank. All sensitive data are stored on a secure server of the gateway.

To better understand the process of online payments, take a look at this video:

So, a payment gateway is an irreplaceable tool for online businesses, however, which one is right for your particular case? Answering the following questions will help you to choose a payment gateway that will perfectly match the needs of your website or app.

Do you need a merchant account to receive payments?

A merchant account is a special bank account that enables a business to receive different kinds of payments including credit and debit card payments directly. Earlier, payment gateways required all online store owners to have such an account. However, modern technologies enable the withdrawal of funds from the buyer’s account, with the proceeds deposited into the sellers account.

Gateways that don’t require a merchant account seem to be a good choice, since they don’t force you to create a new bank account. However, they usually charge higher fees so be ready to pay more for the convenience.

If opening another bank account isn’t an issue for you, a classic payment gateway paired with a merchant account is a good choice. You will spend more time setting up the system, but you’ll save a lot in a long-term perspective.

Do you prefer a hosted or integrated gateway?

Your users don’t care whether you are using a merchant account to receive the payments, however, the difference between the hosted and integrated gateway will directly affect the payment process.

The difference between these two types of payment gateways is that the integrated gateways let your buyers enter their payment data while they are on your website; the hosted gateways redirect users to the payment processor’s platform.

PayPal, for example, is a classical example of a hosted gateway. The users have to enter and confirm their payment information on the page of the service. The benefit of such an approach is clear. The buyers believe PayPal to be a reliable service that can be trusted with their sensitive data, and are therefore more likely to complete the checkout and confirm the payment.

An integrated gateway allows users to input their payment data without leaving your website. For them, this is a seamless process. But this type of payment gateway will work well only if your website is secure enough since all payment details will be stored on your server.

When choosing the type of payment gateway you should also take into account the countries where you are going to sell your goods or services. In some countries, hosted gateways are considered to be more secure, while others have more trust in integrated gateways.

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Is the payment gateway easy to integrate with your website?

Some payment gateways offer simple integration with the e-commerce websites. In some cases this means that the integration can be performed without the programming skills. All you have to do is paste the piece of code with the API key provided by the gateway in your webpage. After this, the payment button will appear. When the button is pressed, the buyer will be redirected to the website of the payment system to enter data required to complete the payment.

As you may have already guessed, such an easy integration is possible only in case of hosted gateways. The changes are done only on the frontend of your website. All the internal processes occur on the gateway’s server.

The integrated services require the work of a professional developer, since the processes will be run in the backend of your own website. The backend integration with the API of the payment gateway enables your website to accept, process and send the data to the payment system, as well as process the result of the payment and update customer data in your system.

Integrated payment gateways require the work of a developer. The hosted gateways are usually easy to integrate, and by following the detailed instructions provided by the gateway you will be able to do this yourself.

Which currencies and merchant locations does the gateway support?

A lot of modern gateways enable you to receive payments in the majority of available currencies. But don’t let this fact mislead you.

The supported currencies means that merchants are able to receive payments from customers that use these currencies, but it doesn’t mean that merchants can be located in countries where these currencies are in use.

To explain this with an example, imagine that you have chosen a gateway that supports both American and Canadian dollars, but the merchant location is limited to the USA only. Accordingly, your business must be located in the USA, but you will be able to receive payments from customers in the USA and Canada.

The number of merchant locations that each gateway supports is usually limited, so double check whether your country is on the list before making the final decision. If your business has several locations, you will have to choose an international payment gateway.

Does the gateway support the payment methods of the target market?

Investigating your buyer persona can uncover many interesting facts which will help you choose the right payment gateway. In which countries do your customers live? Which currencies do they use to pay? Which payment methods do they prefer?

Actually, the preferred payment methods depend on your clients’ country of residence. Different payment methods are popular in different regions. Credit cards, Visa, MasterCard and PayPal are used worldwide and should definitely be among the available payment methods, regardless of the target market. If your customers live in the USA, don’t forget to add American Express. Your Russian clients will be happy if you allow them to pay with Webmoney, Kiwi or Yandex.Money.

Consider adding regional payment methods along with the global ones, as this will take you one step closer towards satisfying your clients.

What are the payment gateways fees?

The costs of the payment gateway will play a significant role in your choice of service provider. Payment gateways usually have different types of fees and it is not easy to choose the most appropriate one. You should pay attention to the following types of fees:

  • Setup fee/registration fee (one-time payment);
  • Monthly fee;
  • Transaction fee/payment processing fee/credit card processing fee (charged as a percentage or a fixed fee on every transaction);
  • Chargeback fee.

The fees may change according to how your business grows. The companies sometimes offer lower fees for large clients. That means, the more transactions your payment gateway processes from your website or app, the lower the transaction fees will be.

Some of the popular payment gateways offer a free setup, while some charge a one-time payment up to $50. The transaction fees are usually 2.9% + $0.30 and can be higher or lower, depending on the service provider.

What are the terms of the contract?

You may, at some stage, want to change your payment gateway service provider. This can occur for a variety of reasons, but usually it is due to the growth of the business, expanding to other markets, or a change in the demand for products or services.

In order to avoid surprises after selecting a payment gateway, find out everything you can about the conditions of service before making your final decision.

Some providers may specify a minimum contract length, while others will allow you to terminate at any time. A fee may apply if the service is terminated before the end of the contract.

Another crucial point is data portability. Some gateways (including the popular PayPal) don’t allow you to access your customers’ data.

This means that, after moving to another payment gateway, you will have to ask your users to enter their payment data again. This may not seem to be a major issue, however it will frustrate some customers.

Can I count on professional support?

Almost all service providers promise you professional support, but this does not always occur in practiсe. A never-ending queue in the call center, and email answers that arrive days after you send your request to the support team - no service provider will reveal this on their website. But real customers are aware of this.

Professional and timely support is important - especially when you are dealing with money. So take into account the user feedback about the support service - it may affect your choice.

But sometimes poor customer support is compensated with a strong and ready-to-help community. Either way, before choosing the payment gateway, make sure that you won’t be left without a way to resolve technical problems.


A stable payment gateway is an important tool for developing a business on the internet. Choosing the wrong service provider may frustrate your customers and prevent your business from growing.

At the same time, there are a lot of things to consider to ensure that you choose the right payment gateway for your project. Does the service support your location, the currencies and the payment methods of your target market? What are the credit card processing fees that you will be charged? Will the rates change as your business grows? Will you be able to change to another service provider without any termination fees? Can you rely on professional support from the company or at least the user community?

If you still doubt which payment gateway will best fit the needs of your e-commerce project - we are here to help. Our team has already integrated payment solutions for dozens of websites and apps. Check out our case studies or drop us a line for a personal consultation. It’s free!

Besides, we are preparing an extensive comparison of the most popular payment gateways. Follow us to be the first to find our which solution will be the best fit for your online project!

Payment gateways have made purchases on the internet as secure, quick and easy as never before, causing the rapid development of online shopping. Don’t miss the opportunity to offer your clients a seamless payment experience!

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