There are more than nine million online retailers in the world and more than 2.5 million of them are based in the US. If you run a business and you intend to do business via your website, then one of the most fundamental considerations is to establish a mechanism by which customers can pay. 

The simplest method, and the one adopted by the vast majority of online vendors is to choose a payment gateway. This essentially means partnering with a third party provider who takes care of your online payments, providing a secure mechanism for customers to pay and depositing the money into your account.

There are plenty out there to choose from, ranging from well-known global giants like PayPal to new competitor brands such as UniPayment. Each has its own pros and cons, so if you are in a quandary as to which is the right payment gateway for your business, we will run through some points to consider. 

What exactly is a payment gateway?

Before we dive in too deep, it is worth taking a moment to be clear what a payment gateway is and what it does. Put simply, a payment gateway enables purchasers to pay merchants from desktop or mobile devices directly from the merchant’s ecommerce site. For customers, it means an easy and secure checkout process, and for merchants, it is all extra sales revenue, so it is a win/win for both parties.

The payment gateway is used to accept and authorize payments. Most commonly, this is in the form of a card payment, but some payment gateways also accept alternative payment methods such as crypto. Either way, the gateway validates payment details, ensuring there are sufficient funds available, and then completes the transaction. Payment gateways use encryption and secure servers, to ensure security and meet the appropriate regulations. 

Traditional versus modern payment gateways

The first thing to think about is whether to use a traditional or modern payment gateway service. The former means setting up and registering your own merchant account and then using a service like WorldPay or Authorize.net. 

These are fine if you already have a merchant account set up, but if not, it makes more sense to use a modern gateway to bypass this step. Modern gateways simply deposit the funds straight into your bank account. Examples include UniPayment, PayPal and Stripe. Of course, there is a fee associated with the service, but most vendors find it is well worth it for the reduced hassle.

Accepting multiple payment types including crypto

An important factor to consider is which types of payments the different gateways can process. As we mentioned earlier, most will enable Visa and MasterCard transactions as a matter of course. But think about what other payment methods your customers might want to use. 

Do they need to be able to pay in foreign currencies, for example? Or what about crypto payments? Crypto transactions have increased by 100 percent over the past five years, and a growing number of online shoppers are using digital currencies. Gateways like UniPayment help vendors keep their options open by accepting a range of crypto including Bitcoin, USDT payments and others.

Hosted versus non-hosted gateways

Hosted payment gateways redirect customers to a separate processing platform, where they enter their payment details. In the case of a non-hosted gateway, the customer remains on your website throughout. Non-hosted gateways are more slick from the buyer’s perspective, but hosted ones take all the maintenance and security issues out of your hands, so there are pros and cons to both. 

Cost is always an important factor

With any business decision, you need to think about the cost. That doesn’t necessarily mean choosing whatever is cheapest, as when it comes to a payment gateway, you get what you pay for to a certain extent. 

It does, however, mean weighing up cost and return. Payment gateways typically have three types of cost associated with them. These are set-up fees, ongoing monthly fees and per-transaction fees. They all have their own payment structures, and there is no simple right or wrong decision. You need to think about your business and its trading volume, not just today but over the months and even years to come. 

Security is most important of all

The cost of a security breach in your payment processing is not just measured in dollars. It can also lead to lawsuits and reputation damage that can devastate a brand. Any reputable payment gateway, including the ones we have mentioned here, will have first-rate security and encryption.  

However, there are fraudsters and charlatans out there, so if you encounter a service provider you have not heard of before, take some extra time to check them out, including their security, encryption and fraud detection processes. These must demonstrate full PCI DSS compliance.

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