10 Payment Gateways to Power Your Online Success
Payment gateways enable businesses to accept payments both online and in-person. However, choosing the right payment gateway can be a challenge as pricing and transaction fees differ as do the features and inclusions. To help, Forbes Advisor has rounded up the best payment gateways for a wide variety of business types. We hope our guide helps you find the ideal solution for your needs and budget.
Table of Contents
Our Top Picks
The Best Payment Gateways of 2024
- Authorize.net: Best for fraud prevention
- Stax: Best for high-value transaction
- Payline Data: Best for subscription-based businesses
- Shopify: Best for e-commerce startups
- Helcim: Best for high-volume sellers
- Elavon: Best for integrating with existing point-of-sale (POS) systems
- Square: Best for retailers
- Stripe: Best for customization
- Clover: Best for restaurants
- PayPal: Best for versatile payment solutions
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What To Consider
Most Frequently Asked Questions
What Is a Payment Gateway?
A payment gateway is a software application that merchants use to accept credit cards and other types of electronic payments. Payment gateways are encryption systems that protect sensitive information, such as credit card numbers, as it passes from customer to merchant. These gateways then pass the transaction information to the customer’s bank and to the merchant’s acquiring bank (or the bank that has partnered with the merchant to provide credit card processing services).
The payment gateway is responsible for authorizing the credit card transaction and ensuring that the funds are transferred from the customer’s account to the merchant’s account. Payment gateways typically charge a monthly fee as well as a per-transaction fee.
How To Choose the Best Payment Gateway
Payment gateways are necessary for any business that wants to accept online credit card payments. The technology circulates financial data around to the necessary entities to authorize payments and move money from a customer to a merchant. When choosing the best payment gateway, it’s important to consider pricing and fees, integrations, security, and other factors:
Pricing & Fees
The cost factors for payment gateways are the subscription fees and the payment processing fees. The subscription fees are the monthly fees that the payment gateway charges and the payment processing fees are the fees that the payment gateway charges for each transaction. Some payment portals don’t charge a monthly fee and charge a higher transaction fee instead.
You can expect to pay $25 to $50 per month for a subscription fee and around 2.9% plus 30 cents per transaction for the payment processing fee. Anything outside these parameters tends to have more or fewer features than average.
When considering pricing, you should also factor in the following:
- Do they offer a free trial?
- Do they have any setup fees?
- Do they have any hidden fees?
- What’s the minimum monthly fee?
- What’s the chargeback fee?
- What are the refund fees?
- What are the international transaction fees?
Types of Payment Gateways
There are three main types of payment gateways:
- Redirect: The payment gateway simply takes a customer to a payment processor, like PayPal or Stripe, to process the transaction.
- Hosted (off-site payment): The customer makes a purchase on your website or at your retail location, and the payment information goes to the payment provider’s servers for processing. This is how Stripe and Square POS systems operate.
- Self-hosted (on-site payment): The entire transaction happens on your servers.
Integrations & Customizations
Your payment gateway should be able to integrate with your shopping cart, accounting software and any other software you use for your business. This will allow you to automate your accounting and save time.
You should also consider whether the payment gateway offers any customization options. For example, you may want to be able to add a logo or change the color scheme of the payment page. This can often be accomplished using an API, though not every gateway offers this option.
Security
When choosing a payment gateway, security should be one of your top considerations. You want to make sure that the gateway uses the latest encryption technology to protect your customers’ credit card information from being stolen.
The payment gateway should also be PCI-compliant. This means that they follow the Payment Card Industry Data Security Standard (PCI DSS), which is a set of security standards that all businesses that process credit card payments must follow.
Payment Methods
Another thing to take into account is what payment methods are supported by the chosen gateway. In addition to credit cards, you may want to accept payments via PayPal, Venmo, ACH or eCheck. You may also want to offer customers the option to pay by invoice.
On-site or Off-site Transactions
Some payment gateways allow you to process transactions on your website while others require customers to be redirected to a separate page to enter their credit card information.
If you want to process transactions on your website, you’ll need to choose a gateway that offers an on-site payment solution. If you don’t mind redirecting customers to a separate page to enter their credit card information, you can choose either an on-site or off-site gateway.
How Do Payment Gateways Work?
Payment gateways include these key stakeholders:
- Merchant: The business or any person making the sale.
- Cardholder: Your customer making the purchase.
- Issuing bank: The financial institution that holds the customer’s account, either a credit card account or a checking account connected to a debit card.
- Card schemes: The credit card companies that manage the card, like Visa, Mastercard or American Express.
- Acquiring bank: The financial institution that holds the merchant’s account.
Payment Gateway vs. Payment Processor
The term “payment gateway” is often conflated with the terms “payment processor” and “payment service provider,” but these are three distinct things.
A payment processor transfers information between the issuing and acquiring banks to move money into your merchant account, but it requires a payment gateway to communicate across the other moving parts and authorize the transaction.
A payment service provider, like PayPal, includes a payment processor and a payment gateway, as well as a merchant account and often other features to handle all aspects of a transaction.
Which Payment Gateway Provider Is Right for Me?
The reason there are so many payment gateway providers is that each of them is adept for specific situations. Brick-and-mortar retailers and pizza shops have different requirements than a law firm or a dental implant manufacturer. So, when it comes down to picking your payment gateway provider, you need to consider your unique needs. But here are a few common questions you should consider when choosing your payment gateway provider.
Where Do Your Customers Prefer to Shop?
Rates for in-person and online payments vary, as do the costs for processing one credit card versus another. So, if you sell more in one realm than another, one provider might not cut into your margins as much as another. Price aside, some payment gateway providers offer better features and services for handling payments in one dimension versus another.
How Do Your Customers Prefer to Pay for Goods or Services?
Some customers prefer credit cards. Others prefer digital wallets. How they like to pay should influence which service to use. Again, some providers might have better pricing, features or services (or all three) to support the payment methodology that your customers like.
What Is Your Monthly Sales Volume?
Your monthly sales volume—in terms of the total number of transactions and dollar value—is another major factor that any business should consider when selecting a payment gateway. Businesses with higher volumes would benefit from plans where they pay a high monthly fee for lower rates on each transaction, whereas businesses with low volumes would be better off paying a higher per-transaction fee without a monthly fee.
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