Setting up an online store means that you will have to sift through the available eCommerce payment solutions to find the best for your specific needs.
There is a wide variety of payment systems or gateways available, each with its own pros and cons.
Therefore, it’s important to determine your business’s needs, resources and goals before signing up for one so that you can choose the best system for your business.
In this blog post, we’ll review the 8 best payment solutions available in 2024 along with the key features that set them apart when choosing an appropriate payment solution for your eCommerce online store.
The 8 Best eCommerce Payment Processing Services
Here are the 8 best payment gateways available in 2024 that will help your eCommerce store grow in revenue:
1. PayPal
PayPal is arguably the most famous payment gateway option in the world, offering various payment solutions for different business requirements.
Brand recognition alone adds trust amongst customers that are browsing your store, thereby encouraging purchases.
Additionally, PayPal’s excellent customer support and transparent pricing make it straightforward to factor into your budget (2.60% + $0.30 AUD per transaction).
Some of its other benefits include accepting 100+ currencies worldwide, a pay-in-4 feature and having over 400 million active users worldwide.
2. Stripe
Stripe offers a payment processing service for no monthly fee but instead charges a percentage of each transaction (1.7% + $0.30 AUD per transaction).
Moreover, having no setup fees also further cements its friendliness to start-up businesses that don’t have a lot of capital.
Stripe is generally developer-friendly and is considered a very versatile option because it offers many customisation and integration capabilities.
Stripe integrates with every major website builder and marketplace globally to ensure you’ve got an all-in-one payment solution.
3. Google Pay & Apple Pay
Google Pay and Apple Pay are mobile payment solutions that allow customers to make quick and secure payments using their smartphones.
Both services store payment information on the user’s device, enabling seamless and contactless transactions.
Google Pay and Apple Pay are widely accepted and offer a fast checkout process, enhancing the customer experience.
With advanced security features, they protect sensitive payment information, making them reliable options for online stores.
These platforms charge standard card processing fees, similar to other eCommerce payment gateways.
4. AfterPay
AfterPay is a “buy now, pay later” service that lets customers split their purchases into four equal payments, paid every two weeks.
This interest-free option can attract more customers who prefer spreading out their payments.
AfterPay can boost your sales by reducing cart abandonment rates and encouraging higher average order values. It’s particularly popular among younger shoppers.
However, AfterPay charges merchants a fee for each transaction (4-6% + $0.30 AUD per transaction), which is higher than standard credit card processing fees.
5. Klarna
Klarna offers flexible payment options, including “buy now, pay later” within 30 days and financing over time. This flexibility can appeal to a broader range of customers.
Klarna’s various payment plans can help reduce cart abandonment and increase sales. It is available in many countries, making it suitable for international businesses.
Klarna charges merchants a fee per transaction (3.29-5.99% + $0.30 AUD per transaction), which can be higher than traditional payment gateways.
6. Authorize.net
Authorize.net offers a mid-range flat rate fee per month plan starting at $25 per month plus 2.9% + $0.30 AUD per transaction. Unfortunately, it does not allow for instant withdrawals. However, it does provide invoicing capability.
Some benefits include tailored fraud prevention and a few added flexibility features. Moreover, there is no setup fee, which helps to keep costs low.
However, Authorize.net does charge extra for certain features and merchant account approval can take up to five business days, making the setup slow.
7. Square
Square offers clear per-transaction pricing (2.2% per online transaction) and no monthly fee, along with instant deposit capability and invoicing.
The “buy now, pay later” options are an attractive addition, providing yet another avenue for clients to make payments. Square also allows for various integrations and add-ons.
However, Square doesn’t offer telephonic support and has limited customer support hours, which is a concern.
Worse, any additional support through its customer loyalty programme costs extra.
8. Shopify Payments
Shopify Payments charges a smaller flat rate for social selling and a higher rate for Shopify online stores (starting at 1.75% + $0.30 AUD per transaction).
However, the comprehensive and flexible eCommerce tools make this solution easy to use and adaptable to a variety of eCommerce ventures.
In addition, it can scale quite easily alongside a growing business and allows for the centralisation of all one’s commerce activities, making it easier to keep track.
Shopify also offers instant deposits. However, other add-ons can increase the cost and customisation is limited. You can find out more about the costs of Shopify in Australia here.
Shopify is easy to use and simple, but it is an expensive option if you are an intermittent seller and don’t earn a relatively stable monthly revenue.
If you’re already using Shopify for your online store, you should review the best Shopify payment gateways here.
How To Choose The Right eCommerce Payment Services
Given the abundance of eCommerce payment solutions, knowing where to start and which is best for your business can be tricky.
There are a lot of things that need to be considered when looking at payment solutions, such as the features available, the pricing and the level of security and customer support on offer.
Consider the following factors to ensure that you choose the right one:
Understanding Your eCommerce Payment Needs
Understanding your business’s unique payment needs is crucial. You will need to consider the integration process, as some payment gateways can be easier to set up than others.
When using popular eCommerce platforms like Shopify or WooCommerce, you might have a variety of payment solutions already primed and ready to run without any hassle.
However, if you have set up an eCommerce store using a less popular platform, you might have difficulty integrating the payment gateway into your store.
The integration process involves creating an account with the provider and obtaining the necessary application programming interface (API), which is a set of rules, protocols and tools that allow different software applications to communicate with each other.
These credentials typically include API keys or tokens, which authenticate your eCommerce site with the payment gateway’s API.
Most eCommerce platforms provide plugins or extensions that facilitate seamless integration with payment gateways.
They simply require the installation and configuration of the plugin according to the platform’s requirements. In some cases, there is no pre-built plugin available for your chosen payment gateway.
You might be required to integrate the payment gateway API directly into your eCommerce site’s code base manually. This can be a complex process and might require a professional’s assistance to get it right.
It also includes the configuration of different gateway settings within your eCommerce platform’s administrative panel.
Using these configuration settings, you can configure currency pricing options and even enable features like recurring billing or fraud prevention.
When choosing a payment solution, find something simple to set up while still offering the customisation and flexibility that will suit your specific business needs.
Comparing Fees & Pricing Structures
The cost of using a payment gateway is a significant factor in deciding which one is best for you. Each payment solution has its own set of transaction fees and monthly charges.
Some are flat rates, while others are percentages of transactions made.
This makes it difficult to compare the costs because some solutions might seem cheaper upfront but could end up costing you more in the long run.
Therefore, read the fine print and understand exactly what you’re getting into before you sign up.
For example, using a payment solution that takes a small percentage of each transaction might be attractive at first, as it has low startup costs.
However, over time, as your revenue grows, the cost of the solution grows with it.
Alternatively, you could opt for a payment solution that requires a flat monthly fee.
While this might seem expensive upon startup, in time, this flat monthly fee will become negligible as your revenue grows.
Key Features In The Best eCommerce Payment Solutions
Ensure your chosen payment system has the following in place before signing up:
High-Quality Security
Importantly, ensure that your payment gateway offers rock-solid, impenetrable security for both you and your customers.
Solutions that offer encryption technology and fraud detection tools are not only a preference but an absolute necessity, given the rise in cybercrime over the last few years.
Therefore, having a payment gateway that protects you and your customers against the latest in cybercrime methods and technologies is critical.
Multiple Payment Options
Offering multiple payment options can play a big role in boosting conversions, as it makes it easier for customers to buy something.
The more barriers you place in the way of customers making a purchase, the less likely they will be to spend their money.
Therefore, by creating multiple payment options, you ensure an easier time at checkout, thereby smoothing the way for customers to take the final step.
Recurring Billing Functionality
If you’re selling one-off product purchases, then this aspect might not be as relevant.
However, if you’re selling a subscription-based product or service, then having a payment solution that supports recurring billing is essential.
Recurring billing allows you to automatically charge your customers on a regular basis without having to process each payment manually each time.
This kind of automation reduces the administrative burden and ensures a more consistent and professionally managed billing system to facilitate an ongoing revenue stream.
Mobile Optimisation
If the payment solution you’re investigating is not fully optimised for mobile devices, disregard it, since people nowadays shop using their smartphones.
Solutions that offer a streamlined checkout flow and an easy-to-use mobile interface are preferable and should be prioritised.
Integrating Your Chosen Payment Gateway
Once you’ve chosen the payment gateway that best suits your eCommerce platform, focus on integrating it into your platform so that it provides a seamless customer experience.
Most payment gateways provide detailed documentation and step-by-step guides to help you through the integration process.
As mentioned before, many of the more popular eCommerce platforms will offer pre-built plugins and extensions that make this process even easier.
Ensuring a Seamless Checkout Experience
Outside of security, the most important thing to ensure is that your customers have a seamless checkout experience so as to minimise any barriers to purchase.
Making customers jump through hoops or navigate multiple pages to complete a purchase provides them extra opportunities to bounce, leaving potential revenue on the floor.
Therefore, payment gateways that offer streamlined checkout processes with as few steps as possible while still maintaining adequate security are ideal.
The less friction there is during the final stage of a sale, the more likely your customers will be to complete the purchase.
Troubleshooting Common Integration Issues
Even though payment gateways offer significant documentation and instructions to ensure the integration process runs smoothly, there may still be issues when implementing them.
Therefore, it is important that you have a payment solution that offers good customer support so that you can iron these issues out as and when they arise to avoid stalling your business.
Payment gateways that offer 24/7 support, whether it’s via phone, email, or live chat, are preferable to ones that might be difficult to get a hold of.
Sometimes, issues with your payment gateway can arise during the course of business and every minute that it’s not working properly can cost you potential revenue and hurt your reputation.
Therefore, having a support team that is ready to help you at a moment’s notice to quickly and efficiently get your payment gateway up and running is worth its weight in gold.
How To Maximise eCommerce Conversions
Maximising conversions with a streamlined checkout process is the ultimate goal of any eCommerce business.
The real magic happens on the checkout page, where your customers input their payment information to complete the purchase.
This, more than any other aspect of the payment gateway, needs to be optimised and customised so that it’s easy to navigate and in keeping with your brand’s ideals.
Reducing Cart Abandonment
One of the most common problems with eCommerce stores is cart abandonment, which is when customers put desired items in their cart and begin the payment process but then abandon it before pulling the trigger.
Studies have shown that the average cart abandonment rate is around 70%, which means that at least seven out of ten people who add items to their carts leave without completing the purchase.
Offering a variety of payment options and simplifying the payment process is the best way to reduce the cart abandonment rate.
In many cases, customers will get to the checkout page and won’t see their preferred payment method there, causing them to abandon their cart and go to another business that will accommodate them better.
Another way to reduce cart abandonment is by offering a guest checkout option, which allows customers to complete a purchase without having to go through the arduous process of creating an account or logging in.
Many customers get frustrated with creating accounts or logging in, as they no doubt already have a long list of login credentials and passwords for many sites that they need to keep track of.
Therefore, adding more to the list can easily frustrate them to the point that they will simply go to another business that’s less hassle.
Leveraging A/B Testing
It is worth your while to implement A/B testing so that you can compare different versions of payment options to see which one performs better.
This kind of experimentation allows you to see the different payment options and checkout flows to determine which one works best for your business.
The benefit of doing this is that you can optimise your payment process to ensure that you’re providing the best possible experience for your customers.
One way to do this is to compare and test the conversion rates of two distinct checkout page designs.
Another way could be to test different payment options on a single page to see which ones your customers choose most regularly.
You could also evaluate a test audience using a particular checkout option and gather feedback on their experience.
Final Thoughts
Choosing the best eCommerce payment gateway for your online store is crucial for ensuring a smooth, secure and user-friendly checkout process.
The right eCommerce payment processing service will not only enhance the customer experience but also help boost your sales and reduce cart abandonment rates.
By understanding your business needs, comparing fees and prioritising security and mobile optimisation, you can select the best payment gateway for your eCommerce platform.
Remember to keep the integration process seamless and provide multiple payment options to cater to a broader audience.
Frequently Asked Questions
What is a payment gateway?
A payment gateway is a service that authorises and processes payments for online stores.
It acts as a bridge between the customer’s payment method and the merchant’s bank account, ensuring secure and efficient transactions.
Are there any hidden fees associated with payment gateways?
Some payment gateways may have hidden fees, such as setup fees, monthly fees, transaction fees, or fees for additional features.
Always read the fine print and understand the pricing structure before committing to a payment gateway.
Can I use multiple payment gateways on my website?
Yes, you can use multiple payment gateways on your website to offer your customers a variety of payment options. This can enhance the customer experience and reduce cart abandonment rates.
How do payment gateways handle security?
Payment gateways use advanced security measures such as encryption, tokenisation and fraud detection tools to protect sensitive payment information.
Ensuring your chosen gateway offers robust security features is essential for protecting both your business and your customers.
What is the difference between a payment gateway and a payment processor?
A payment gateway facilitates the transfer of payment information between the customer and the merchant, while a payment processor handles the transaction between the merchant’s bank and the customer’s bank. Both are necessary for completing online transactions.
To your success,
Jackson
