What is a Payment Gateway?
Payment Gateways act as intermediaries between you and your project, taking away the responsibility of interacting with the banks directly. In addition, they provide a modern and safe integration for developers to implement, enabling your project to take payment without payment details ever touching your project’s infrastructure. This means you don't have to worry about PCI DSS; they do it all for you.
Despite them all serving the same (or similar) purpose, not all payment gateways are the same. They all have varying perks or advantages, and these are what you need to be considering when choosing the right one for your project. Some key differences which WorkingMouse has discovered when investigating payment gateways for our client's projects include:
- Project type
- Ease of integration
- Developer API and documentation
- Payment facility Support
- Client portal capabilities
- Mobile App Support
It's important to weigh up the technical considerations vs the commercial considerations when considering these factors while making your decision. From the technical perspective, often the choice appears simple: choose the payment gateway with the best/easiest/quickest development experience. This is what some of our competitors might do to save you money now. However, it is also important to consider the experience of your users or the support you can provide to your users through those others perks that the other payment gateways offer.
Another key factor to consider is if your project is also intended for mobile, either as a mobile friendly web app, a hybrid app, or a native app. In-app purchases are becoming far more common and accepted as time goes on. These can be handled for you by some payment gateways, otherwise that functionality will have to be implemented between your app and the app store, in addition to your selected payment gateway. It is worth noting that integrating with an app store is nowhere near as difficult as integrating with a bank. This leads on to the main reason many opt against in-app purchases - commercial considerations.
While it will likely cost you nothing to integrate with a payment gateway, it will cost you (or your customers) a percentage of a transaction. The most extreme example of this is in-app purchases when conducting iOS mobile app development. While they are considerably easier to integrate with from a technical perspective (because Apple/Google tend to make it easy for their customers) they take 30% of a transaction. For example, a $100 dress purchased through an in-app gateway will see $70 go to the retailer and the other $30 go to Apple. As a result, the majority of businesses choose to integrate with payment gateways.
For the purpose of this article we won't dive into every possible payment gateway. We will however outline three that we have experience integrating with and the commercial considerations of each.
The pricing for eWay is 1.5% plus 25 cents for every transaction. This type of hybrid model (flat rate plus percentage) is common but may not be preferred for those businesses dealing in large quantities of small transactions. If your average transaction value is $5 then 25 cents is 5% of revenue.
Perhaps one of the most popular payment gateways, Stripe boasts greater features and flexibility than many competitors. The pricing structure is 1.75% plus 30 cents per transaction. Marginally more expensive than eWay but it is worth assessing whether Stripe's advanced functionality will save development time.
Both Pin Payments and Braintree share the same pricing approach as Stripe. That is, 1.75% plus 30 cents per transaction. Be sure to contact a few payment gateways. Depending on your volume of cash flow there may be room to negotiate on the standard pricing model.
At the time of writing, WorkingMouse had researched a wide variety of payment gateways, and integrated a number of different payment gateways across unique projects. We go through the payment gateway discovery for every client, and propose our objective and comprehensive findings back along with our experience with each to our clients so that they can make an informed decision. This experience is what has guided this content, so that it can hopefully also assist you. I want to stress a very important point.
Don't leave it until the last minute!
The approval process for a payment gateway is rarely instant. This is especially the case for new businesses. Because there is no trading history, the payment gateway must conduct an approval process. Think of it this way, a bank wouldn't instantly approve a home loan. That is why it's important to begin the approval process at the start of a project, not when the development iteration is starting.
Integrating with the “right” payment gateway is not a one size fits all recommendation. There is almost never an obvious choice. The best path forward is to draw up a list of requirements and expectations of a payment gateway for your project, then using this guide as a starting point as you do your research, you will find the one which ticks all those boxes.
We recommend choosing Payment Gateways which have experience behind them, as well as high quality customer and developer support. These are the Payment Gateways that you can rely on to deal with your user inquiries in a timely and professional manner. They also care about how effectively you integrate their application into your project, and are happy to assist your developers with making the most of their integration functionality. In our experience these platforms have been those listed above (eWay, Stripe, Pin Payments and Braintree).