Whether you’re a Fortune 500
company or a local mom-and-pop shop, the question remains the same: how can you
find and integrate the right technology into your business model to drive sales
and expand your position in the marketplace?
While there are many additive
marketing and sales tools for online businesses, one of the core components of
any online operation is payment gateways. We understand that getting down and
dirty with payment gateways is not for the faint of heart, so we’ve sifted
through some of the best gateway options for you and your business.
What is a Payment Gateway?
A payment gateway is essentially
the tool that facilitates any online transaction between your business and your
customers. Selling goods or services is only possible with a payment gateway in
place. Payment gateways range in complexity, but both e-commerce and dropship
stores rely on them to be financially viable operations. Indeed, dropship
stores need a payment gateway to complete transactions to sell goods from
manufacturers as much as e-commerce platforms need payment gateways to complete
online transactions.
Payment gateways connect a brand
with customers and dictates much of the user experience. How they operate, their
ease of use, and features for both you and consumers all have tangible impacts
on sales, revenue, and customer engagement.
How do eCommerce Payment Gateways work?
All payment gateways are designed
to enable safe, secure, and simple online purchases for both the merchant and
consumer. There are two broad categories to know when selecting your payment
gateway: integrated versus hosted payment gateways. Integrated gateways
redirect customers to the payment platform’s processor to finish their online
purchases. In contrast, integrated gateways allow you to connect your website
through the payment gateway’s API (Application Programming Interface) so that
your customer does not leave your domain. Redirecting to a third-party platform
is a notorious disruption of sales, so that’s something to consider when
selecting a payment gateway.
Secondly, all payment gateways
are PCI compliant, meaning that they meet specific security standards as they
collect sensitive information like credit card numbers and addresses.
The process is this: a payment
gateway’s role begins as a customer starts the checkout process on your
eCommerce or dropship store. Once a customer fills in their credit card
information, the gateway sends encoded transaction data to the payment processor
of the seller’s bank.
The payment processor then sends
that data to the associated credit card, and the credit card’s bank approves or
denies the transaction request. The processor delivers the approval back to the
gateway, and then the payment gateway successfully and securely processes said
payment. Finally, the pending purchase clears as soon as the seller fulfills
the customer’s order, and the seller’s bank can receive the payment from the
customer’s bank.
Even though the name for them
sounds a bit strange and scary, payment gateways operate in a pretty
straightforward way. Choosing a payment gateway, though, can be a much murkier
process.
Best Payment Gateways for Dropshipping & Ecommerce
Given that every business and
brand has unique needs, constraints, and market goals, the list of gateways
below is not a ranking of best to worst. Instead, it is a comprehensive list of
the most useful available payment gateways that will ensure quality, no matter
which solution is right for your venture. Here’s a general breakdown of the
fees, with analysis to follow.
PayPal is, perhaps, the biggest
beast in the payment gateway jungle.
Indeed, Paypal is a giant payment
gateway, which works as an advantage for vendors. It holds the promise of
familiarity and trust among consumers; this is particularly important for small
brands and companies that do not yet have widespread brand recognition and
trust. Its name brand recognition will likely result in higher conversion
rates. A whopping 305 million people use PayPal, and it is accepted in over 200
countries worldwide in 25 different currencies. It’s a tried-and-true gateway
that is ideal for many types of e-commerce and dropshipping operations. PayPal
also supports all major credit cards as well as debit cards, PayPal, Venmo, and
PayPal credit.
It is worth noting PayPal has
other options available to vendors including PayPal Payments Pro (a gateway
option that doesn’t require purchasers to have a PayPal account), PayPal
Payments Standard (a version of PayPal Payments Pro), and PayPal Express
Checkout (allows users to purchase by using just their PayPal credentials).
PayPal is also widely used and
available for integration for the majority of the e-commerce platforms in the
market, such as:
PayPal for WooCommerce
(WordPress)
PayPal app for Shopify Stores
PayPal for BigCommerce
Another popular, global payment
gateway is Stripe, which has fantastic customer support for vendors and
increased flexibility in the form of more extensive developer tools. With a
flexible API, you can customize the platform to your needs. An excellent choice
for businesses with developers and tech specialists on hand, you can add a Stripe
POS system to your brick-and-mortar store, bill your customers regularly and
routinely, and complete one-time payments – whatever your business needs.
Vendors who choose to use Stripe
also have the benefit of its many partnerships with the exceptionally high
number of third-party platforms and tools that may improve your website
experience.
eBay moved its massive operation
to Adyen back in 2018, and the payment gateway has only grown since then. Adyen
accepts over 250 payment methods and 150 currencies from around the world and
provides its users with in-depth customer analytics and insights. Its
advantages speak for itself: conduct business efficiently and globally and use
the detailed data to modify listings according to consumer behavior in real-time.
Then, just watch your sales increase. The gateway is also designed to look out
for vendors. There are integrated risk-management features that search and
fight fraud. One of the only downsides? Its pricing model can get complicated,
and that can be frustrating for vendors.
The U.S. based payment gateway
brings two major critical cards to the table: excellent localization and the
ability to integrate with other systems easily. 2Checkout simplifies
transactions for customers by supporting different languages and currencies and
accepting online and mobile payments. You cannot overestimate the value of
simple, easy-to-use interfaces for consumers. In the same spirit of
streamlining the eCommerce process, 2Checkout can combine with online shopping
carts and invoicing systems to help you process your payments faster and
easier.
In other words, 2Checkout will
help you stay sane as much as it will grow your sales.
Vapulus is grounded in
simplifying mobile payments, which is a considerable asset in a world of rising
mobile shoppers. While it is a global platform, what sets Vapulus apart from
the crowd is its commitment to charge vendors 0% fee, giving you 100% of your
sales. Given its nonexistent fees and unique ability to send targeted customer
perks and discounts, it is a fantastic option for small businesses. It will
assist small brands in developing a loyal customer base and expanding their
market presence domestically and internationally. It is a formidable competitor
in terms of giving vendors a single interface with plenty of data that is
easily analyzed.
PaySimple is an incredibly
functional platform that prioritizes product placement and marketing services
to drive traffic and conversions via your website and social media. It boasts
of endless flexibility with the ability to accept credit card and e-check
payments across all sales avenues, including in person with a POS system, on
the phone, and online. You can also utilize PaySimple’s sales and order data to
generate standard and customized reports that will give you invaluable customer
insights.
Dwolla might not be the right
choice for traditional, product-based retail businesses, but it is a lifesaver
gateway for businesses that rely on bank transfers to conduct sales. Dwolla is
a scalable, flexible platform that works well with all United States banks and
financial institutions. Much like Stripe, it is open-source software that
permits developers to integrate bank transfers whatever company-specific tools
needed.
Square has gained more name brand
recognition through high profile e-commerce partnerships with organizations
like Wix, WooCommerce, WordPress, OpenCart, Magneto, and Ecwid. Known for its
POS systems intended for brick-and-mortar locations and in-person payments,
Square has expanded its gateway payment capabilities and become more and more
of an asset for business owners. If part of your longterm business model
includes plans for physical store locations, Square is a good investment in the
future.
Payoneer empowers freelancers and
small businesses to stake a claim in international markets. It offers an
unparalleled mass payout system that makes the global workforce a much tighter,
stronger, and more communicative network. Companies can hire and quickly pay
contractors and freelancers from all over the world, regardless of where they
operate. Payoneer enhances its payout platform by supporting over 35 languages,
which makes the localization process a breeze.
What Skrill lacks in vowels, it
makes up for in flexibility and easy mobile app use.
Skrill is a newer payment gateway
that has claimed a significant portion of the gateway market with its focus on
low-cost international money transfers that allow you to pay for things all
over the world. Its success is rooted in its ability to accommodate all scales
of business, from individuals to massive companies. Additionally, it has a
mobile app that supports payments and an official extension for integration
with WooCommerce-based dropshipping stores.