Digital Payments has crossed all the charts whether it may be revenue or innovations or bringing new digital payment gateways into the world. Due to the advancement in technologies and opportunities, various marketers are facing new challenges and competition in the quality of e-commerce payment gateways.
According to Internet World Stats, the total world users of the Internet accounted for 4.5 billion, with 58.7% of global penetration as on 31 Dec 2019. Out of which 57.2 million digital users’ accounts are from the United Kingdom, which is approximately 90.64% of UK people shop online and use some sort of payment gateway.
“Digital Payments and Contactless options are changing the way people shop and make buying decisions, it’s a mega-trend”Mark Zuckerberg
Marketers have responded to these digital payment mechanisms as a paradigm shift by increasing the use of digital marketing.
According to a report by Statista, retail e-commerce sales worldwide have grown exponentially, and by multi-folds, from £1,083.72 billion in 2014 to £3,411.77 billion in 2020. It is estimated that the worldwide sale is expected to grow to £5,306.65 billion by 2023.
“The total transaction value in the digital payments in the United Kingdom aggregates to £133,303m in 2020 and is expected to grow at a CAGR of 22.2% resulting in the total amount to reach £297,091m by 2024”Statista
Before jumping on to the conclusion on which payment gateway to use, we need to understand the foundations of payment gateway and the options available to us.
In this article, we’ll be understanding what are payment gateways and payment gateways options including SagePay, PayPal, Stripe, and GoCardless.
In simple words, a Payment Gateway is a way to receive or make the payments. It gets the payment from your customer and settles an equivalent to you (business). It’s a software that creates the transfer of the transaction data possible from the merchant to the acquiring bank.
The whole payment process contains background parties which are involved to form the payment transfer possible.
The payment gateway acts as a medium to transmit the request between mediums involved including, Issuing bank, Payment Processors, Third-Party Bank or Merchant, and the Acquiring Bank.
Payment Gateways first captures the customer’s paid amounts within the Nodal checking account then it’s settled within the Merchants Bank as per the pre-decided settlement period of time. They even facilitate buyer and seller protection by being a mediator between both.
It provides multiple payment options to your customers and allows them to pay in any way they need like, MasterCard, open-end debit or credit cards, E-Wallet, QR Code, etc.
Payment Gateway Security
For both the merchants and the customers, the safety aspect is vital because of the sensitive payment information and therefore the funds are involved within the process.
For that one should look out that the payment gateway they choose is following the right security standards.
Which Payment Gateway should you use?
As you almost certainly know, every payment gateway charges different transaction fees.
Your goal when choosing the proper payment gateway for your online store is two-fold:
- To streamline the checkout process by integrating with the foremost commonly used gateways, and
- To make sure that the prices incurred for each transaction don’t fret your profit margins.
Following are some of the Payment Gateway options to choose from:-
Sage Pay can be defined as a secure MasterCard and open-end debit/credit payment solution. It is employed by thousands of online and order businesses across the United Kingdom and Eire.
Some of the features of SagePay are-
- SagePay is fully integrated with Kentico E-commerce Module.
- It is easy to install and use.
- It offers multi-currency payment options
- 3D-Secure (Verify By Visa, MasterCard Secure Code)
- PCI-DSS compliance for security
Sage Pay supports both 3D-Secure and PCI Compliance, which is a fraud prevention initiative launched by the MasterCard companies as a safer method for authenticating the consumer at the time of the transaction and MasterCard Secure Code PCI DSS providing security to scale back the danger of your customers’ card data stepping into the incorrect hands.
It offers three plans starting from £19.90/month for online flex options, £45/month for Online Plus option, and Online Corporate Price on application.
SagePay charges a fee of 1.99% on CC and 40p on debit card transactions.
Stripe is an e-commerce tailored-payment solution and a payment gateway accepting all major payment methods, including mobile payment providers like Apple Pay, WeChat Pay, Alipay, and Android Pay.
It’s a simplified PCI compliance procedure, with 135 supported currencies, and allows for integrating with other third-party platforms.
Stripe charges no setup fees.
The quality package charges 2.9 percent + £0.24 per domestic transaction.
Additionally, there’s a fee for international card processing (1 percent). But Stripe also offers a customized solution and pricing package for giant businesses.
PayPal is one of the foremost widely accepted electronic payment methods within the world. It offers scalable solutions for businesses of various sizes.
Through its gateway, PayPal offers processing of all the main credit and debit cards, and PayPal payments themselves, with various other methods.
Some of the features of PayPal are-
- Sending/Receiving Payments
- Barcode Scanning Payment option
- Express Checkout
- Credit Card Reader
- Bill Me Later Option
- Online Invoicing and Inventory Tracking
- Support of 26 currencies
PayPal has a fee of 2.9 percent + £0.24 per transaction.
Outside the US transactions are 3.9 percent + a fee supported the currency used.
PayPal’s Payments Pro charges £24.99 monthly for a subscription.
Direct debit is one among the safest and most cost-effective ways of collecting payments. It’s automatic, fast, and improves your income so you’ll specialize in growing your business. With GoCardless accepting direct debit payments directly, makes it one of the few platforms offering DD integration in their payment gateways.
GoCardless payment gateway is regarded as a giant within the direct debit world, processing approximately $7 billion annually. They sell subscriptions and accept recurring direct debits payments.
GoCardless is currently available to users who collect payments in the subsequent currencies including GBP, EUR, AUD, NZD, SEK, and DKK.
GoCardless has a 1% transaction fee, which is capped at £2, making it one of the most affordable payment gateway options.