Which payment gateway is right for your business?

No business can stay operational for very long unless it brings in money and as such, you need to make it as convenient and simple as possible for your customers to spend with you. Getting the right payment gateway for your POS is vital to support the ongoing function of your business, and your ability to turn a profit.

What is a payment gateway?

Put simply, a payment gateway is the equivalent of A payment gateway is an eCommerce solution in the form of software that authorizes credit card payments for businesses. It is the equivalent of POS terminals seen in retail outlets. However as well as in bricks and mortar stores, it can also be used for online transactions.

How do I know what is best for my customers?

Offering your customers with an efficient and convenient payment process is critical. If the transaction is too confusing or a time consuming then they may give up and go elsewhere. When deciding on your choice of payment gateway, one of the key considerations you need to make is what will work best for your customers based on the type of product or service that you are providing.

For example, if you are a store selling items with an average price of $500 or more, you can reasonably expect that the majority of your customers will make purchases using a card rather than cash. Alternatively, if you have a store that sells items with an average value of $10, then you need to ensure that you have the option for your customers to pay using cash in addition to using a payment gateway at your point of sale. You should also look at factors such as whether your in-store payments are bigger than online payments or vice versa.

Online Transactions

These days there are many payment gateway available out there that integrate with renowned point of sale software systems. Though it is difficult for us to compare them all, we’ve prepared a basic comparison for 3 selected online payment gateways. We hope this comparison will help you get started with your search and provide with some comparison criterion to look for based on your requirement.

The three payment gateways we selected for the comparison are Stripe, PayPal and eWAY. For each of these we are going to compare three areas of consideration in order to help you decide which is right for your business.

Please note: This article was written on 23rd June 2015. Rates and other comparison are based on information available to us at the time of writing this article.

Stripe

Launched in 2011, Stripe is a US based system that supports payments in 20 countries across the globe in more than 100 currencies. It offers automatic conversions allowing customers to pay in their local currency.

Set up

Currently processing times from initial set up and activation to receiving funds in your account is around 7 days. Customers are able to stay on the merchant website rather than being redirected to Stripe to make a payment. This may make customers feel more secure about spending with you.

Fees

2.9% + 30¢ per successful charge.
However Stripe does offer some volume-based discounts. For exact discounts you need to contact their team.
If you need to process a refund, Stripe returns the entire fee without you incurring any charges.
There are no set up fees, no card storage fees and no ongoing monthly fees for using the gateway.

Customer Support

Support for Stripe is entirely online based, with no phone contact available. Emails are the most effective form of contact with responses usually always received within 24 hours.

PayPal

Probably the online payment gateway that most people are familiar with, Paypal allows any individual, sole trader or business to safely send and receive money. All that is needed is an email address. It initially had a stronger presence in the world of online auctions and private sales. However, it is now increasingly being used for business transactions including services, digital content and tangible products.

Bought by eBay in 2002 and now based in California, USA, it is available in more than 200 countries and in more than 26 currencies.

Set up

No business bank account is required when using Paypal. Merchants only need an email address to register and start trading. Set up is so simple that you can start using your Paypal account the very same day.

Customers are redirected through to the secure Paypal site each time they need to make a payment. Monies are received into your account the next working day.

Fees

2.9% + 30¢ per successful charge.
Paypal also offers volume based discounts. However there are a number of service fees that can apply across transactions including for refunds and international cards or where a currency conversion is needed.

Customer Support

Paypal offers a strong active community online where questions are regularly asked and answered by proactive users and Paypal staff. They are active on Twitter and are happy to offer initial support on there. There is an extensive FAQ section and they also offer phone and email support.

eWAY

Launched in 1998 and trading in 8 countries, eWAY is a secure online payment processing gateway that passes your card details onto your bank for processing whenever you enter into a transaction.

Set up

Setting up involves registration and then selecting which service package is right for your business needs. You can expect to begin taking customer payments in around 6 days from registration.

Fees

EEWAY fees are again based on volume of turnover. For example, if your business is taking approximately $10’000 AUD per month then you could expect to pay 2.0% + 25¢ per transaction. There would also be a monthly fee of $10.
Their ‘All in One’ package includes all fees and charges so you know exactly what you will need to be paying each month.

Customer Support

EWAY offer 24/7 phone and email support, along with a Live Chat service.

At POS Transactions
Payment gateways are also needed at traditional point of sale counters in physical stores. Many businesses and retail outlets are moving towards more efficient and paperless card based transactions. That said, there are still a percentage of people who prefer to use cash instead of POS gateways as so you will need to ensure that your business still has this capability.

Cash

The most traditional form of payment; using cash is simple, quick and easy.

Set up

You will need a cash drawer or cash box at your POS to store the money that you take, and this will need a daily ‘float’ to ensure that you have enough change to give customers. You will also need to set up a merchant bank account to keep track of your money, and deposit your takings yourself on a regular basis.

Fees

Apart from the initial investment in a cash drawer, there is very little cost involved in setting your business up for cash payments. However, if you are looking to employ a money transporter service then these will incur an additional monthly fee.

EFTPOS

EFTPOS stands for ‘Electronic Funds Transfer at Point of Sale’ and allows customers to make card payments at any physical POS by reading a card and getting authorization from card issuer bank to complete the transaction. At some EFTPOS terminals (based on business’s policy), customers are also able to do’cash out’ transactions in addition to their purchases, saving them a trip to an ATM.

Set up

In order to set up this payment processing gateway you need to have a ‘merchant account’ with your bank. The EFTPOS then links to this merchant account to transfer the funds from the customers’ bank to your account.

Fees

This may vary depending on your transaction size, volume and various other factors. Please ask your business bank account manager directly for more information.

Paypal Here

PayPal now also offers PayPal Here for in-store payments. The chip & pin technology is considered as future of in-store payment processing. Using Bluetooth technology, the Paypal Here app links your mobile phone or tablet to the card reader in order to take payments, eliminating the need for a physical wire connection.

Set up

In order to use this service you need to ensure that your Paypal account has been upgraded to PayPal Premier or Business. PayPal Here works with its dedicated Chip and PIN POS hardware.

Fees

Paypal charges 2.75% for purchases made using Chip and PIN cards and Paypal check in.
However, it charges 3.4% + 20p for card payments for transactions made by swiping the magnetic stripe or manually entering card details.

Whether your business is big or small and provides a service or goods, there is a payment gateway out there to suit your needs. We hope that this article has been helpful and informative in your decision-making process.