As with most decisions you need to make for your e-commerce business, choosing a payment gateway isnâ€™t straight forward, and there are many different options available to you offering different facilities. Firstly you need to identify what you want your payment gateway to do, before then seeing which best suits your needs.
Functionality is key â€“ does it cut the mustard?
The most important factor is basic functionality â€“ can the gateway do what you need it to? If it canâ€™t, itâ€™s pointless considering it. But it isnâ€™t just about whatâ€™s possible, itâ€™s also about making things easy â€“ a gateway like Stripe makes setting up recurring payments a doddle, while PayPal is great if your customers donâ€™t want to dig out their card details every time. Or if youâ€™re planning on letting people call your store to order, SagePay is the better route.
Then thereâ€™s on- and off-site functionality â€“ does the gateway allow you to take payments on your own website rather than being redirected to the third party page. Thereâ€™s positives and negatives to both approaches â€“ payments taken to a third party page have higher dropouts before closing the sale, but having the form on your site means you need to be a lot tighter on security.
Then thereâ€™s the fact that some of gateways are literally just that â€“ a gateway between customer and your own merchant bank account that you need to set up. Others offer the complete package with account included, but these tend to have higher per-transaction fees. Finding the right option is a balancing act dependant on the size of your store and how many transactions you take.
Reputation matters â€“ will customers trust it?
There are dozens of options out there for gateway payments but thereâ€™s a reason the most popular are the most recognisable â€“ customers trust them, and if a customer doesnâ€™t trust your e-commerce store in any way including the payment gateway they will abandon the purchase. SagePay, World Pay and PayPal are the most famous, but Stripe is starting to gain recognition.
An alternative is to have an alternative. Thereâ€™s no rule saying you can only have one gateway, so if youâ€™re set on one option why not consider one of the simpler tools, like PayPal, as a backup?
Ultimately cost is key
Whatâ€™ll sway the decision overall is the cost associated with each payment gateway. Something like SagePay, which doesnâ€™t include a merchant account, doesnâ€™t charge per transaction but instead has a standalone monthly fee, with different brackets based on number of transactions. Stripe, meanwhile, has no monthly fee and a 2.4% charge plus 20p, while PayPal Pro includes the same charges and a monthly fee.
You might feel like youâ€™re no closer to deciding, and itâ€™s important that you make your own final choice. However generally speaking, SagePay is better for larger businesses who make more transactions, since there is no per-transaction fee, but if you donâ€™t have thousands of orders every month something like Stripe may be the better option, but PayPal has the recognition factor if you want customers to have more confidence.