Last updated on April 21st, 2023 at 10:06 am
As eCommerce continues to grow, the demand for secure and reliable payment processing has become increasingly important. Payment gateways play a vital role in this process by allowing eCommerce businesses to securely and efficiently process transactions. With so many eCommerce payment gateway options available, choosing the right one can be a daunting task.
In this comprehensive guide, we’ll explore everything you need to know about payment gateways for eCommerce websites. From understanding how payment gateways work, to comparing the features and fees of popular options, we’ll equip you with the knowledge and tools necessary to make an informed decision for your business.
What is An eCommerce Payment Gateway?
Source: KORONA POS
An eCommerce payment gateway is a technology that securely processes online payment transactions between a buyer and a seller. It acts as a bridge between an online store and the bank that processes the payment.
When a customer places an order and proceeds to checkout, the payment gateway encrypts and securely sends the payment information to the payment processor for verification and approval.
Once the payment is authorized, the payment gateway sends a confirmation message back to the eCommerce website, allowing the order to be processed and fulfilled. The payment gateway provides a secure and reliable payment processing solution, ensuring that online transactions are protected against fraud and other security risks.
How Did Payment Gateways Work?
Payment gateways work by securely processing online payment transactions between a buyer and a seller. The process typically involves the following steps:
- Customer places an order: The customer selects items to purchase and proceeds to checkout on the eCommerce website.
- Payment details are entered: The customer enters their payment details, such as credit card number, expiration date, and CVV code, into the payment gateway.
- Payment details are encrypted: The payment gateway encrypts the payment details to protect them from being intercepted by third parties.
- Payment details are sent to the payment processor: The encrypted payment details are sent from the payment gateway to the payment processor, which verifies the information with the customer’s bank.
- Payment is authorized or declined: The payment processor communicates the payment authorization or decline status back to the payment gateway.
- Order is processed: If the payment is authorized, the payment gateway sends a confirmation message back to the eCommerce website, allowing the order to be processed and fulfilled.
Throughout the process, the payment gateway ensures the security and integrity of the payment transaction, protecting both the customer and the seller against fraud and other security risks.
Why Payment Gateways Are Important for eCommerce?
Payment gateways are an essential component of custom eCommerce website development as they play a critical role in ensuring secure and reliable online transactions. Without a payment gateway, eCommerce businesses would not be able to accept online payments, which could significantly impact their sales and revenue.
Payment gateways are important for eCommerce businesses for several reasons.
Firstly, they provide a secure and reliable payment processing solution, protecting against fraud and other security risks. Customers are more likely to trust an eCommerce website that offers secure payment options, which can increase their confidence in making online purchases.
Secondly, payment gateways offer a seamless checkout experience for customers, enabling them to complete their purchases quickly and easily. This can lead to increased customer satisfaction and loyalty, as well as a higher likelihood of repeat business.
Lastly, payment gateways offer a range of features and customization options that can be tailored to the unique needs of an eCommerce business. This can include support for multiple payment methods, integration with other eCommerce systems, and advanced fraud detection and prevention tools.
Overall, payment gateways are a critical component of custom eCommerce website development, providing a secure, reliable, and convenient payment processing solution that is essential for the success of online businesses.
eCommerce App Development : Types, Cost and Monetization Strategies
How to Set Payment Gateway in eCommerce Website
Setting up a payment gateway is a crucial part of creating an e-commerce site, as it allows customers to make payments securely and conveniently. Here are the steps to set up a payment gateway on an e-commerce site:
Choose a Payment Gateway Provider
There are many payment gateway providers available in the market, such as PayPal, Stripe, Authorize.net, and many more. Choose a provider that best suits your business needs and integrates with your e-commerce platform.
Create an Account
Once you’ve selected a payment gateway provider, create an account with them. You will need to provide some basic information about your business, including your name, address, and tax ID.
Get API Credentials
After creating an account, you will need to obtain API credentials from the payment gateway provider. The API credentials are a set of keys that allow your e-commerce site to communicate with the payment gateway and process payments.
Configure Your E-commerce Platform
Next, you need to configure your e-commerce platform to use the payment gateway provider’s API credentials. Depending on your platform, this process may vary. You may need to install a plugin or module to enable payment gateway integration.
Test Payment Gateway Integration
After configuring your e-commerce platform, test the payment gateway integration to ensure that everything is working correctly. Test different payment scenarios, such as successful payments, declined payments, and refunds, to ensure that the payment gateway is working as expected.
Secure Your Payment Gateway
Ensure that your payment gateway is secure by following best practices, such as encrypting sensitive data, using SSL certificates, and implementing fraud prevention measures.
Compliance
Make sure that your payment gateway setup is compliant with local laws and regulations, such as GDPR, PCI DSS, and other data protection and privacy laws.
By following these steps, you can set up a secure and reliable payment gateway that enables your customers to make payments conveniently and safely.
Types of Payment Gateway
When it comes to choosing the best eCommerce payment gateway, there are several types of payment gateways to consider. Each type of payment gateway has its advantages and disadvantages, and the right choice will depend on the specific needs of your eCommerce business.
Here are some of the most popular types of payment gateways:
Hosted Payment Gateways
These payment gateways redirect customers to a third-party website to complete their payments. Hosted payment gateways offer a simple and secure checkout process, but can sometimes be less customizable.
Self-Hosted Payment Gateways
These payment gateways allow customers to complete their payment on the eCommerce website itself, providing a more seamless checkout experience. Self-hosted payment gateways can be more customizable but require additional security measures to protect against fraud.
Payment Aggregators
Payment aggregators are a type of hosted payment gateway that allows businesses to accept payments from multiple sources, such as credit cards and e-wallets, through a single account.
API-Integrated Payment Gateways
These payment gateways offer more advanced customization options, allowing businesses to integrate the payment gateway directly into their eCommerce website using an API. API-integrated payment gateways require more technical expertise but offer greater control and flexibility.
Virtual Terminal Payment Gateways
These payment gateways allow businesses to accept payments over the phone or by mail, providing a more flexible payment processing solution.
Ultimately, the best eCommerce payment gateway will depend on the specific needs of your business. Consider factors such as security, customization options, and ease of use when choosing the right payment gateway for your eCommerce website.
10 Best Example of eCommerce Payment Gateways
There are many payment gateways available for eCommerce websites, but here are ten of the best payment gateways that offer a wide range of features and support multiple payment methods:
PayPal
PayPal is one of the most popular payment gateways for eCommerce websites, offering a secure and reliable payment processing solution that is trusted by millions of users worldwide. Founded in 1998, PayPal allows businesses and individuals to send and receive payments online, using a simple and convenient payment processing platform.
With PayPal, customers can make payments using a variety of payment methods, including credit cards, debit cards, and bank transfers. PayPal also offers advanced fraud detection and prevention tools, providing businesses with an additional layer of security to protect against fraudulent transactions.
In addition to its payment processing services, PayPal offers a range of additional features and services for eCommerce businesses, including customizable checkout options, support for recurring payments, and integration with popular eCommerce platforms such as Shopify and WooCommerce.
Overall, PayPal is a reliable and trusted payment gateway that offers a simple and secure payment processing solution for eCommerce businesses of all sizes.
Stripe
Stripe is another popular payment gateway for eCommerce websites that offers a wide range of features and customization options. Founded in 2010, Stripe has quickly become one of the most popular payment gateways, with thousands of businesses relying on its payment processing services.
One of the key benefits of Stripe is its customizable checkout options, which allow businesses to tailor the checkout experience to their specific needs. Stripe also supports a wide range of payment methods, including credit cards, debit cards, and mobile payments such as Apple Pay and Google Pay.
In addition to its payment processing services, Stripe offers a range of additional features for eCommerce businesses, including support for subscriptions and recurring payments, advanced fraud detection and prevention tools, and integration with popular eCommerce platforms such as Shopify and WooCommerce.
Overall, Stripe is a flexible and feature-rich payment gateway that is trusted by businesses of all sizes. With its wide range of payment options and customization options, Stripe is a great choice for eCommerce businesses looking for a reliable and customizable payment processing solution.
Authorize.net
Authorize.net is a payment gateway that provides a reliable and secure payment processing solution for eCommerce businesses. Founded in 1996, Authorize.net has established itself as one of the leading payment gateways, serving thousands of businesses across the globe.
One of the key benefits of Authorize.net is its support for multiple payment methods, including credit cards, e-checks, and digital payments such as Apple Pay and PayPal. Authorize.net also offers customizable checkout options, allowing businesses to tailor the checkout experience to their specific needs.
Authorize.net also offers advanced fraud detection and prevention tools, which help to protect businesses against fraudulent transactions. Additionally, Authorize.net provides a range of features and services for eCommerce businesses, including support for recurring payments, invoicing, and integration with popular eCommerce platforms such as Shopify and WooCommerce.
Overall, Authorize.net is a reliable and feature-rich payment gateway that offers a comprehensive payment processing solution for eCommerce businesses of all sizes. Its support for multiple payment methods, customizable checkout options, and advanced fraud detection and prevention tools make it a popular choice among businesses looking for a secure and reliable payment processing solution.
Square
Square is a payment gateway that is designed to provide a simple and secure payment processing solution for small businesses. Founded in 2009, Square has quickly become one of the most popular payment gateways, offering a range of features and services for businesses of all sizes.
One of the key benefits of Square is its simple and easy-to-use payment processing platform, which allows businesses to process payments quickly and securely. Square also offers support for a wide range of payment methods, including credit cards, debit cards, and mobile payments such as Apple Pay and Google Pay.
Square also offers a range of additional features and services for eCommerce businesses, including support for invoicing, virtual terminals, and integration with popular eCommerce platforms such as Shopify and WooCommerce. Additionally, Square provides advanced fraud detection and prevention tools, which help to protect businesses against fraudulent transactions.
Overall, Square is a reliable and easy-to-use payment gateway that is designed to provide a simple and secure payment processing solution for small businesses. Its support for a wide range of payment methods and integration with popular eCommerce platforms make it a popular choice among businesses looking for a convenient and reliable payment processing solution.
Amazon Pay
Amazon Pay is a payment gateway that allows customers to pay for goods and services using their Amazon account. Founded by Amazon in 2007, Amazon Pay provides a secure and convenient payment processing solution that is trusted by millions of customers worldwide.
One of the key benefits of Amazon Pay is its ease of use. Customers can complete purchases quickly and securely using their Amazon account, without having to enter their payment and shipping information manually.
Amazon Pay also offers a range of fraud detection and prevention tools, providing businesses with an additional layer of security to protect against fraudulent transactions.
In addition to its payment processing services, Amazon Pay offers a range of features and services for eCommerce businesses, including customizable checkout options and integration with popular eCommerce platforms such as Shopify and WooCommerce.
Amazon Pay also supports a wide range of payment methods, including credit cards, debit cards, and mobile payments such as Apple Pay and Google Pay.
Overall, Amazon Pay is a trusted and convenient payment gateway that offers a simple and secure payment processing solution for eCommerce businesses of all sizes. Its ease of use and integration with the Amazon ecosystem make it a popular choice among businesses looking to provide a seamless checkout experience for their customers.
Braintree
Braintree is a payment gateway that provides a flexible and scalable payment processing solution for eCommerce businesses. Founded in 2007, Braintree is now a subsidiary of PayPal, offering businesses a reliable and secure payment processing platform that is trusted by millions of customers worldwide.
One of the key benefits of Braintree is its support for a wide range of payment methods, including credit cards, debit cards, and digital payments such as Apple Pay and Google Pay. Braintree also offers customizable checkout options, allowing businesses to tailor the checkout experience to their specific needs.
Braintree provides advanced fraud detection and prevention tools, helping businesses to protect against fraudulent transactions. Additionally, Braintree offers a range of features and services for eCommerce businesses, including support for recurring payments, invoicing, and integration with popular eCommerce platforms such as Shopify and WooCommerce.
Overall, Braintree is a reliable and feature-rich payment gateway that offers a comprehensive payment processing solution for businesses of all sizes. Its support for multiple payment methods, customizable checkout options, and advanced fraud detection and prevention tools make it a popular choice among eCommerce businesses looking for a secure and scalable payment processing solution.
2Checkout
2Checkout is a payment gateway that provides a simple and flexible payment processing solution for eCommerce businesses. Founded in 2000, 2Checkout offers a range of features and services for businesses of all sizes, including support for multiple payment methods and integration with popular eCommerce platforms such as Shopify and WooCommerce.
One of the key benefits of 2Checkout is its support for a wide range of payment methods, including credit cards, debit cards, and digital payments such as PayPal and Apple Pay. 2Checkout also offers customizable checkout options, allowing businesses to tailor the checkout experience to their specific needs.
2Checkout provides advanced fraud detection and prevention tools, helping businesses to protect against fraudulent transactions. Additionally, 2Checkout offers a range of features and services for eCommerce businesses, including support for recurring payments, invoicing, and integration with popular accounting software such as QuickBooks.
Overall, 2Checkout is a reliable and feature-rich payment gateway that offers a comprehensive payment processing solution for businesses of all sizes. Its support for multiple payment methods, customizable checkout options, and advanced fraud detection and prevention tools make it a popular choice among eCommerce businesses looking for a simple and flexible payment processing solution.
WorldPay
WorldPay is a payment gateway that provides a global payment processing solution for eCommerce businesses. Founded in 1989, WorldPay is now part of FIS, a leading provider of financial services technology solutions.
WorldPay offers support for a wide range of payment methods, including credit cards, debit cards, and digital payments such as Apple Pay and Google Pay. It also provides customizable checkout options, allowing businesses to tailor the checkout experience to their specific needs.
One of the key benefits of WorldPay is its global reach, with support for over 120 currencies and a network of acquiring banks that spans over 146 countries. This makes it an ideal choice for businesses that operate in multiple countries and need to accept payments in different currencies.
WorldPay provides advanced fraud detection and prevention tools, helping businesses to protect against fraudulent transactions. It also offers a range of features and services for eCommerce businesses, including support for recurring payments and integration with popular eCommerce platforms such as Magento and Shopify.
Overall, WorldPay is a reliable and feature-rich payment gateway that offers a comprehensive payment processing solution for businesses of all sizes. Its global reach, support for multiple payment methods, and advanced fraud detection and prevention tools make it a popular choice among eCommerce businesses looking for a global payment processing solution.
Adyen
Adyen is a payment gateway that offers a global payment processing solution for eCommerce businesses. Founded in 2006, Adyen has grown to become one of the largest payment processors in the world, processing transactions for some of the world’s leading eCommerce brands.
Adyen offers support for a wide range of payment methods, including credit cards, debit cards, and digital payments such as Apple Pay and Google Pay. It also provides customizable checkout options, allowing businesses to tailor the checkout experience to their specific needs.
One of the key benefits of Adyen is its global reach, with support for over 250 payment methods and 187 currencies. This makes it an ideal choice for businesses that operate in multiple countries and need to accept payments in different currencies.
Adyen provides advanced fraud detection and prevention tools, helping businesses to protect against fraudulent transactions. It also offers a range of features and services for eCommerce businesses, including support for recurring payments and integration with popular eCommerce platforms such as Magento and Shopify.
Overall, Adyen is a reliable and feature-rich payment gateway that offers a comprehensive payment processing solution for businesses of all sizes. Its global reach, support for multiple payment methods, and advanced fraud detection and prevention tools make it a popular choice among eCommerce businesses looking for a global payment processing solution.
Payline
Payline is a payment gateway that offers a comprehensive payment processing solution for eCommerce businesses. Founded in 2009, Payline provides a range of payment processing solutions for businesses of all sizes, including support for multiple payment methods and integration with popular eCommerce platforms.
Payline offers support for a wide range of payment methods, including credit cards, debit cards, and digital payments such as Apple Pay and Google Pay. It also provides customizable checkout options, allowing businesses to tailor the checkout experience to their specific needs.
One of the key benefits of Payline is its advanced reporting and analytics tools, which provide businesses with detailed insights into their payment processing activity. This can help businesses to optimize their payment processing and improve their overall eCommerce performance.
Payline provides advanced fraud detection and prevention tools, helping businesses to protect against fraudulent transactions. It also offers a range of features and services for eCommerce businesses, including support for recurring payments and integration with popular accounting software such as QuickBooks.
Overall, Payline is a reliable and feature-rich payment gateway that offers a comprehensive payment processing solution for businesses of all sizes. Its support for multiple payment methods, customizable checkout options, and advanced reporting and analytics tools make it a popular choice among eCommerce businesses looking for a simple and flexible payment processing solution.
Why Mobile Apps Are Important for Boosting eCommerce Business?
Difference Between Payment Gateways and Payment Processors?
Although the terms “payment gateway” and “payment processor” are sometimes used interchangeably, they actually refer to two different components of the payment processing system.
A payment gateway is a service that allows online businesses to accept electronic payments from their customers securely. It acts as a middleman between the merchant’s e-commerce site and the payment processor or acquiring bank.
When a customer places an order on the e-commerce site and enters their payment information, the payment gateway securely transmits the information to the payment processor or acquiring bank for authorization.
On the other hand, a payment processor is a financial institution or third-party service that handles the actual processing of electronic payments. It communicates with the customer’s issuing bank and the merchant’s acquiring bank to authorize and settle transactions.
The payment processor is responsible for verifying that the customer has sufficient funds to make the payment and transferring the funds from the customer’s account to the merchant’s account.
In summary, the main difference between payment gateways and payment processors is that payment gateways act as a secure link between the merchant’s e-commerce site and the payment processor, while the payment processor handles the actual processing of electronic payments.
Payment gateways are primarily responsible for encrypting and securely transmitting payment information,
while payment processors are responsible for verifying the payment details, ensuring funds availability, and transferring funds between the customer’s account and the merchant’s account.
Conclusion
In conclusion, payment gateways are an essential component of any eCommerce website, as they provide a secure and convenient way for customers to make purchases online. There are many different payment gateway options available, each with its unique features and benefits.
Choosing the right payment gateway for your eCommerce website is an important decision that should be based on factors such as your business needs, the payment methods you want to support, and the level of security and fraud prevention required.
As an eCommerce website development company, we understand the importance of selecting the right payment gateway for your business. By working closely with our clients, we can help to identify the payment gateway that best meets their needs and integrate it seamlessly into their websites.
Whether you are just starting or looking to expand your eCommerce business, we can provide the expertise and guidance you need to build a successful online store.
Naveen Khanna is the CEO of Ebizneeds, a company renowned for its bespoke mobile app development and web development in eCommerce app development and AI App development. Delivering high-end modern solutions all over the globe, Naveen takes pleasure in sharing his experiences and views on the latest technological trends.
