Starting a business can be a headache at the best of times, with so many small and large decisions to be made. When you are starting a new eCommerce business on WordPress, one of the inevitable choices you have to make is how you will accept payments. This choice can affect the success and sustainability of your business, so it’s important to choose a payment platform that is right for you.

Deciding which service to use can seem daunting at first, as there are so many options available and so many complex details to consider. However, with the right information, you can make an informed decision and confidently continue setting up your new business.

What is a payment gateway?

When you start an eCommerce store, you will have to select and set up what is called a payment gateway. Payment gateways are simply platforms through which you can accept payments. These third-party service providers make it easy for you to receive money from customers by taking care of any financial and legal requirements that you would have to handle if you processed the money yourself.

Payment gateways will securely handle customer credit card numbers and other personal information, and can also make the transaction more transparent. For example, some well-known payment gateways like PayPal, Apple Pay, or Amazon Pay are recognizable to customers and help legitimize your business.

If you are reading this article, you are likely using WooCommerce on WordPress. WooCommerce is one of the most widely used eCommerce platforms and is compatible with over 100 payment gateways. We’ll get back to how you choose the right WooCommerce payment gateway specifically for you a bit later.

There are typically two types of ways to implement a payment gateway on your website. Some payment gateway providers provide only one of these while others may work with both methods. One method is in which a payment form is located right on your website, which makes it easy for customers to make a payment without ever leaving your website. The other method is to redirect the user to a form on the payment gateway’s website. There are pros and cons to both of these methods.

Having the form load within your website provides a much more seamless and branded user experience. On the other hand, it can put more liability on you to protect a user’s credit card data. For example, a payment gateway such as Stripe uses what’s called an iFrame tokenized solution. This means the form is loading code in your website as an embed similar to if you embed a YouTube video on your website or blog. The user is never actually entering credit card data on your site at all, it just appears that way to them. This reduces your risk since no credit card data is even transmitted on your website.

Other more traditional on-page payment gateways such as Authorize.net AIM have users enter their card data on your site and then transmit securely over to the gateway. The downside to this traditional option is their credit card data is hitting your website (even briefly) which increases the chances of a bad party stealing their card information if your web host or website isn’t secure and fully updated. That leaves you more liable and increases your credit card security compliance so it is not recommended for most small businesses.

The second option in which users are redirected to the payment gateway to pay is the safest and eliminates any possible liability on you regarding securing their credit card data. With that said, this is often a less desirable option because for the customer to finish the transaction, they will have to click on a link and go to another website and this can disrupt their process. Cutting down on the number of steps a customer has to go through before the transaction is completed typically makes them more likely to buy something and convert it into a paying customer.

Some shops offer both methods. For example, a user could pay on the site using their credit card with a secure and convenient solution like Stripe or if they feel more comfortable, be redirected to pay with PayPal or another offsite payment method.

How does a payment gateway work?

Once you have decided on the WooCommerce payment gateway you want to use, the setup process is typically very straightforward.

First, you will have to create an account with the payment gateway of your choice, fill out an online application and then link the account to your bank account. The online application allows the payment gateway to ensure you are creditable and they may run a credit check or other background checks before approving you, but most approve within minutes. You will also have to fill out not only your bank information but business information so they can track your revenue for tax and legal purposes.

Some payment gateways payout funds each night, others may pay out less often so that is something to keep in mind if cash flow is a concern. Specific payment gateways even let you set how often the payouts occur in their settings section. Once you have your account and banking information set up, you can add the payment gateway to your site. Most are offered as official plugins that will quickly connect to WooCommerce. Gateways Stripe and PayPal do not charge an annual fee for the software integration or plugin while others like Authorize.net may not offer an official integration, but third parties have built and supported the connection plugins for a small annual fee. Once the payment gateway is installed on your Woocommerce website, you can accept payments when a customer purchases something.

What to Consider When Deciding on a WooCommerce Payment Gateway

Though most WooCommerce payment gateways function similarly, they will all have different policies, processing rates, and features. To avoid hurting your business by using a payment gateway that isn’t suitable for your needs, you need to consider a few key factors.

WooCommerce Compatibility

Choosing a payment gateway with an existing WordPress plugin will make the transaction process much simpler for you. WooCommerce has plugins for services like PayPal Pro, Square, and Stripe, which automatically manage the connection between WooCommerce and their payment gateways, meaning you will have less work to do when it comes to set up and maintenance.

Third parties have built hundreds of plugins to ensure WooCommerce can easily work with your payment gateway of choice. You can often ask your payment gateway provider if they have a WooCommerce integration or if they know of any vendors that have developed one for their platform. If you cannot find a plugin for your payment gateway, you should consider this burden because custom developing a payment gateway plugin is a costly and time-intensive project due to the high levels of security necessary.

In the same vein, using a payment processor that is easy to use will make everything run much more smoothly for your business. Look for one that is user-friendly with minimal setup required. Payment gateways like Stripe are quick and work with most bank accounts whereas more traditional payment gateways like BluePay require you to have a special merchant account at your bank which can sometimes require a monthly additional fee.

Transaction Fees

Payment gateways will apply a transaction fee every time a purchase is made. They all have different fees that can vary depending on the type of transaction and even your business’s location. Transaction fees are usually calculated based on a percentage of the transaction, or as a small fee for each transaction. Comparing transaction fees between different providers is a good way to find the right one for your business. The easiest payment gateways like Stripe or PayPal typically have very standardized fees and do not typically offer too many discounts for small businesses. Some more traditional payment gateways are more fee competitive and tend to be able to negotiate on fees if you can hit a certain dollar volume of transactions processed per month.

Other Charges

Transaction fees are not the only fees that some payment service providers will charge. These other charges can include set up fees, monthly fees, charges for bank withdrawals, or charges for certain types of transactions. Understanding what fees will be charged and when can help narrow down your options. If you want to set up recurring payments on your website such as if you had a membership subscription site, some payment gateways will charge an extra fee, or not even offer that transaction type at all.

Payment gateways may also charge more for credit cards that stay ‘on file’ on your website so a user can save their credit card and use it next time when shopping on your website. If you need this sort of functionality heavily depends on your market and customer especially if they will be recurring buyers. Be mindful of international fees or offline fees if those will apply to your transactions often.

For example, most payment gateways that offer the ability to enter a credit card directly on their platform (for example if you have customers call in) or the ability to pay in-person using a point of sale, will charge a higher fee than processing your website alone. Many payment gateways do not offer such virtual terminal or in-person transaction capabilities at all so it is important to make sure your payment gateway supports all the ways you expect customers to pay.

Payment Methods for Customers

It’s important to be mindful of the different payment methods your payment gateway will accept. Many only allow for credit card purchases, while others have more options like PayPal or bank transfers. Giving customers as many payment options as possible is ideal.

Geographic Area, Credit Card Processors, and Currency Conversions

Knowing your customer base is crucial for choosing the right WooCommerce payment gateway. With so many businesses now catering to international customers, having a payment gateway that is available in both your country and your customers’ countries is necessary. Most payment gateway websites will display the supported countries so you can verify.

Payment gateways have vendor relationships with credit card processors such as Visa, Mastercard, Discover, and American Express (AMEX) so it is important to choose a payment gateway that supports all of the expected credit cards you believe your customer may need. Some countries offer other credit card processors than the major ones known in the United States above so if you are looking internationally that is something to look out for. Payment gateways may charge a higher transaction fee for certain card processors such as American Express or Diners Club and you may have to sign a separate agreement with such credit card processors.

In addition, you should also keep currency and conversion in mind. Customers will want to pay in their currency, so make sure that your payment gateway can support the conversion at an affordable price. A gateway that charges high fees for transferring between different currencies might be something you wish to avoid.

Top WooCommerce Payment Gateways for WordPress

While there is an overwhelming amount of payment gateways supported by WooCommerce, there are a few trusted standouts that make the payment process simple for both you and your customers.

Stripe

Stripe is an extremely popular payment gateway, known for being easy to use, with clean design and the capability to accept over a dozen forms of payment. Stripe is very compatible with WooCommerce with a form that can be embedded directly onto your website in a secure way that reduces your risk of credit card fraud while ensuring the user has an easy-to-use onsite experience.

Key Features:

• Accepts 12+ forms of payment
• Available in 42 countries
• Available as a WooCommerce plugin without any annual software license
• Easily customizable design
• Charges 2.9% of each transaction, with an additional $0.30 charge per card
• Customers stay on your website during checkout
• Supports customer recurring payments and the ability to ‘save’ credit cards on your website for repeat customers or purchases (“vaulted cards”)

PayPal Payments

Another popular choice for eCommerce stores, PayPal Payments is an extremely secure payment gateway, with anti-fraud features and a Seller Protection Policy. Like Stripe, PayPal Payments has a WooCommerce plugin that is easily connected with WooCommerce stores, and customers can stay on your site during checkout.

Key Features:

• Accepts payments from bank accounts, Visa, MasterCard, Discover, American Express, and the PayPal Pay in 4 and Pay in 3 programs to compete with Afterpay / Klarna / Affirm
• Available in 200+ countries/regions
• Available as a WooCommerce plugin
• Easy to set up and use
• Fees vary depending on location and transaction type
• A basic fee of 2.9% of each transaction, with an additional $0.30 charge per card (similar to Stripe)
• Customers stay on your website during checkout or are redirected to PayPal to checkout
• Supports subscriptions and ‘vaulted cards’ similar to Stripe with an extra layer of approval needed from PayPal

Square

Square is a payment gateway that most people are more familiar with as an in-store point of sale but can be integrated to accept payments online. A WooCommerce integration plugin makes it easy to process payments online and in person. This payment gateway also allows you to accept payments from Apple Pay and Google Pay, and has support for recurring payments.

Key Features:

• Accepts debit and credit cards, Square gift cards, Apple Pay, and Google Pay
• Available in the U.S., Canada, Australia, the U.K., and Japan
• Available as a WooCommerce plugin
• Syncs with in-person Square devices which is the biggest advantage (Stripe offers third party swiping physical devices, but it is not considered as easy to set up as Square)
• Charges 2.9% of each transaction, with an additional $0.30 fee (similar to fees above)
• Syncs inventory and sales for merchants already using Square’s POS (point of sale) system in physical locations or stores

Authorize.net

Owned and operated by Visa, Authorize.net accepts more types of payments than other similar services and provides a seamless checkout process for customers using credit cards. With strong integration with WooCommerce, the checkout process is completed on your website to help reduce cart abandonment rates. Designed for large businesses looking for pro solutions.

Key Features:

• Accepts virtually all kinds of payment
• Available in the U.S. and Canada
• Available as a WooCommerce plugin with support for WooCommerce Subscriptions and WooCommerce Pre-Orders, but requires an annual software license
• Not always ideal for small businesses due to requiring a traditional merchant bank account and a monthly fee
• Charges 2.9% of each transaction, with an additional $0.30 fee, but rates are often negotiable with moderate volume unlike most of the providers above
• Third-party resellers of Authorize.net can often provide even better rates
• Often requires a monthly fee for the ability to support recurring transactions, “vaulted cards”, etc.
• One of the largest and oldest payment processors out there

Amazon Pay

Because this payment gateway is operated by Amazon, customers can use their Amazon accounts to make payments on your site. This is a huge advantage for your business due to the sheer volume of Amazon shoppers. Amazon Pay integrates well with WooCommerce and includes a free plugin to manage the payment process. Customers don’t leave your site during the checkout process, and there is support for multiple currencies.

Key Features:

• Variety of payment methods available
• Available in 170+ countries
• Integrates well with other Amazon services
• Easy for customers with existing Amazon accounts to use, but only works for customers who have an Amazon account
• Charges 2.9% of each transaction plus a $0.30 authorization fee
• No monthly fees

Apple Pay

A payment gateway from Apple, Apple Pay was designed to be used with iOS devices like iPhones and Apple Watches. Payments require authorization through FaceID, Touch ID, or their password, making it one of the most secure payment options. Checkout can be done in one click, cutting down on the time it takes to check out and making it easier for customers to pay.

Key Features:

• Accepts most credit and debit cards
• Available in 40+ countries
• Integration with WooCommerce via Stripe (not as seamless as other options)
• Only available for users of Apple products
• Often a good option for higher-end or luxury e-commerce stores due to Apple user demographics
• No charges beyond what credit card companies charge
• No monthly charges or setup fees
• Which WooCommerce payment gateway is best?

Ultimately, the best WooCommerce payment gateway is the one that works best for you and your business. A payment gateway that has the best transaction fees, is available in your region, accepts the best variety of payments for your intended customers, and offers the best user experience is what you should look for.

If you are building out your WooCommerce site and need help selecting a payment gateway, Inspry can help. We are a web development agency with eCommerce solutions for any type of business. We can help you offer customers the optimal shopping experience and make sure your new WooCommerce site is a success from the get-go. Contact us today to learn more.