Choosing The Right Payment Gateway For Your Business

In 2021, cash is on the verge of extinction.

But we won’t use this post as an obituary to physical money. Instead, we’ll tell you how your ecommerce business can benefit from this fact.

In 2020, digital and mobile wallets stood at over 40 percent of global e-commerce payment transactions. The use of such magnitude has made digital wallets the most popular online payment method worldwide. This number is set to equate to over 50 percent in 2024.

Therefore, online payment processing is no longer an option for ecommerce businesses. It’s a mandate to retain customers and drive more sales.

What is online payment processing?

The online payment process is the process of how merchants accept credit cards online instantly. If you want to enable online transactions, you’ll require three pieces of software. Each of them plays an essential role in cashless transactions. 

Let’s have a closer look at them:

  • Payment processor – The payment processor bridges the gap between your bank and the ecommerce owner. It sends user payment data to the merchant’s bank. Also, it deals with transaction issues like card limits and others. 
  • Payment gateway – This component acts as a point-of-sale device. In this case, it establishes a connection between your website and the payment processor. Also, payment gateways act as a digital equivalent of a terminal and serve to authorize payments. Secure exchange of confidential information and data encryption is also on this element of the software.
  • Merchant account – A merchant account is a bank account created specifically for business purposes. In other words, it enables your ecommerce store to accept online payments. 

The majority of online payment processing software packages cover all three elements. Sometimes, the payment gateway and merchant account can be coupled with an external payment processor. 

How It Works

The step-by-step process of an online transaction processing is quite simple. It usually happens within mere seconds, remaining invisible to the client-side.

  1. The buyer enters the necessary data through the interface.
  2. Transaction details are sent to the payment gateway and the issuing bank.
  3. The bank sends a request to the payment system (Mastercard, VISA, etc.), which evaluates the credit situation of the client and compares it to the terms of the transaction.
  4. The issuing bank sends an authorization code that authorizes the payment system to execute the transaction.
  5. This code is sent to the payment gateway and from there to the merchant.
  6. If the bank approves the transaction, it goes through and the funds are debited from the client’s account.

Now that we’ve grasped the basics, let’s go over the most popular payment gateways for ecommerce in 2021.

Top Payment Gateway Solutions


When you think of online financial services, PayPal must be the first one to cross your mind. This tech giant has offered payment services and solutions for both personal consumers and merchants since 1998. 

Today, PayPal operates in more than 200 countries and regions, boasts over 200 million registered users, and accepts 25 national currencies.

So it’s no wonder that PayPal is a world-acknowledged option for retailers. Besides, its versatility makes it a great fit for both general-purpose marketplaces and boutique shops.

That’s how you set up the PayPal gateway on WordPress:

  1. Sign in to your WordPress admin account.
  2. Click “Settings” on the WooCommerce plugin on the left side menu. 
  3. Choose “Checkout”.
  4. You’ll see the PayPal option under the Payment Gateways tab. Choose “Settings”.
  5. Check the box next to “enable PayPal”. 
  6. Click “save changes”.

The main highlights of this online payment system include:

  • You’ll need PayPal Commerce Pro to enable a credit or debit card payment option;
  • Transaction fee equals 3.49% + fixed fee based on the currency;
  • You’ll pay a %2,99 plus fees on the received currency for standard credit and debit card payments;
  • International transactions are lower with a fee of %1,50 plus currency-related expenses;
  • PayPal supports all popular ecommerce platforms, including WooCommerce, Magento, Shopify, and others.

As for the downsides, PayPal is not the best option when it comes to large sales. Since your transaction costs will grow according to the number of sales, it may not be the most cost-effective solution.  


Stripe is a suite of payment APIs that became known for its technologically advanced features and transparent, flat-rate fees. Today, Stripe is the closest rival of PayPal with almost 2 million active website users. 

 Stripe Payments assist merchants in managing an online business by providing a group of innovative products. The latter saves time and money needed to set up an online payment processor. 

Stripe is backed up by rockstar enterprises, including Amazon, Shopify, Uber, TED, and Lyft, not to mention thousands of other businesses. 

Here’s how you can set up a Stripe Account to accelerate your sales:

  1. Sign up for the service on their website
  2. Verify the email address 
  3. Set up your account 
  4. Fill in business details  
  5. Type in banking information 
  6. Establish Stripe Connection by choosing ‘build a platform or marketplace’ 

As for the financial side of things, Stripe’s credit card processing fee equals 2.9% plus 30 cents. International transactions add another 1%. You can also use other payment methods within this processor.


If you compare square vs stripe, the two payment processors share lots of similarities.

Just like Stripe, Square is one of the most seasoned payment providers in the world. Here, you can accept a great number of payment options, including credit cards and debit cards.

Thus, millions of low-volume merchants use Square’s payment platform to simplify payment processing. Square is well-known for its flat-rate fees, advanced feature set, and the absence of monthly fees. 

Businesses pay a flat rate of 2.6% plus $0.10 for swiped/dipped/tapped transactions, and 2.9% + $0.30 for online transactions. 

When you factor in a powerful mobile application, reporting tools, and even free email marketing, Square will certainly become even more appealing. The payment processor is compatible with a variety of e-commerce platforms.

It supports WooCommerce, WordPress, Wix, Weebly, Ecwid, BigCommerce, and 3dcart+custom-built websites. However, the biggest con of Square is its modest service area. This payment option supports only 6 countries. 


Braintree Payments is a full-stack platform that facilitates transactions within your app or website. It is a great alternative to the classic model of cobbling up a payment gateway and merchant account from different providers. 

Besides, Braintree supports both online transactions and popular payment methods, like Apple Pay. Success stories of Braintree feature such companies as Grubhub, Yelp, and Dropbox. 

Among other differentiators is the option to set up an individual merchant account. This way, you can access the processor’s functionality in a more personalized and secure way. 

Within this system, you’ll be charged 2.9% plus $0.30 per transaction. PayPal and PayPal Credit payments are free of charge. International transactions add another percent on top of the 2.9 percent.


Dwolla is a white-label payment processor that helps your business to get integrated with the ACH network. The product hasn’t gained maximum exposure yet, but it is considered to be a promising alternative. Also, it boasts robust security measures that secure your integration. 

Dwolla is a great option for non-techies since it provides a low-code API that simplifies the complex integration process. Dwolla is a bank agnostic option with scalable infrastructure and quote-based pricing.  

The Final Word 

Choosing an appropriate payment flow is challenging given the variety of choices today. Some of the examples of established payment gateways are Braintree, Stripe, and PayPal. We recommend making the right call based on the sales volume, operational area, and the most popular payment option among your customers. Security and device compatibility are also among the most important pointers.

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