When someone submits their payment information, your payment gateway will take that information and further pass it along to the bank that issued the card and the card network (VISA, Mastercard, etc.) to check the validity (e.g. whether or not someone actually has the money or the credit necessary to make the purchase). If everything looks good, the issuing bank confirms to the card network, who further confirms to the payment processor, and the money is debited from that person’s account…where it eventually makes its way to you.
So while it seems simple on the surface, there’s actually a lot going on behind the scenes to make sure that all that money is moving as it should be!
For some payment gateways, shoppers will need to manually enter their card details, while other payment gateways — like PayPal — let people log in to their existing account rather than entering their card information directly.
Typically, the “standard” fee for domestic payments in the USA is something like 2.9% + $0.30 per transaction, while international payments can be higher. Unfortunately, there’s no way to accept credit card payments without paying this fee – it’s the cost of doing business.
Additionally, some payment gateways will let shoppers use other methods of payment. For example, PayPal lets people pay with their existing PayPal balance or via their bank account, while other payment gateways enable contactless methods, like Apple Pay.
There are a bunch of reputable payment gateways out there, but two of the biggest names are:
When in doubt, I would recommend choosing one of these two, though I will list some other options as well.
Stripe is a popular payment gateway that offers a simple way to accept payments via a variety of methods. In addition to standard credit and debit cards, you can also use other methods like:
- Apple Pay
- Google Pay
To accept credit card payments, Stripe charges a processing fee of 2.9% + $0.30 per charge, which is pretty much the industry standard. Additionally, unlike PayPal, users will enter their actual card details, rather than logging into their account like they can with PayPal.
Stripe can also help you set up and process recurring payments.
You probably don’t need an introduction to PayPal, as it’s pretty ubiquitous at this point.
One of the big benefits of PayPal is that it lets you accept payments via people’s PayPal accounts, as well as credit and debit cards. This can be good for privacy-conscious folks who can just sign in to their PayPal account, rather than having to enter their credit card details.
In terms of basic fees, PayPal charges the same 2.9% + $0.30, so there’s no difference there, and PayPal can also help you process recurring payments.
Authorize.Net is another popular service that lets you accept credit card and contactless payments (like Apple Pay), either online or in person.
One downside of Authorize.Net is that, in addition to the standard 2.9% + $0.30 fee, Authorize.Net also charges a flat $25 per month fee.
4. Amazon Pay
As the name suggests, Amazon Pay is Amazon’s own payment gateway offering. Because it’s such a well-known name, your users will inherently trust this gateway.
Additionally, it lets shoppers use the payment methods that are already stored in their Amazon account, rather than forcing them to manually enter their details, which is great for privacy-conscious folks who might be wary of entering their details in an unknown site.
Amazon Pay has the same base processing fee – 2.9% + $0.30.