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Have you recently started accepting payments online? Or are you at least considering doing so? Usually, people think that it is a cumbersome task and if you think the same then you are far from reality. Today, there is no dearth of options for getting paid online. Majority of these platforms can be set up within minutes and therefore do not entail vast training measures for you to maintain and operate. The trick is finding the correct way to receive as well as process payments, which is generally done using a payment gateway.

A payment gateway is basically your doorway for receiving payment online. It collects the consumers’ credit card and transaction details and sends it to the processor so that the transaction can be authorized. Payment gateways allow you to make sales online and get paid for your service or product through a valid method. There is no other way for you to charge someone’s credit card unless and until you are making use of payment gateway.


When the consumer makes a payment using the gateway, it follows the below mentioned steps:

  • Firstly, it authenticates the customer’s billing information.
  • Next, it authenticates funds for each customer’s payment method and sends the encrypted payment to the process.
  • Then, it allows requests and lets you issue a confirmation number.
  • And, most significantly it helps you get paid for your goods or services.


Earlier, if you wanted to use a payment gateway you were required to have a merchant account. But the situation has changed drastically. There are many payment gateways that do not require you to have a merchant account for you to make the payment. But it is still essential for you to know the exact difference between the two. As mentioned earlier, payment gateways are basically like terminals for credit cards through which you can receive payments, except that it is through a secure hosted payment form via your website or integrated shopping cart.

Merchant accounts, which are special bank accounts, allow you to accept multiple forms of payments like credit cards, debit cards, and ACH payments. In a nutshell, a merchant account is a contract between a retailer and a credit card processing company. Merchant accounts allow your customers to make fast, flexible, and secure payment options.

Merchant accounts have been around ever since credit card payments have been which is why some call them “classic” gateways. This type of gateway has been accepted and is usually the preferred method for retailers that have a brick and mortar store or for larger businesses.


When selecting payment gateways there are two options; hosted and integrated. Hosted payments gateways, such as PayPal, redirect your customers to the payment platform’s processor to complete the transaction. The benefit of this gateway is that it’s responsible for all PCI compliance and data security. The drawback with hosted gateways is that it could harm your conversion rates since customers are leaving your site and may not trust the gateway. Still, this may be your best option when just starting out.

Integrated gateways allow you to connect your e-commerce website through the gateway’s provided API. This means that your customers aren’t redirected to another site so you aren’t harming your conversions. However, you’re responsible for the security of your customer’s data. Also, since most integrated gateways allow you to customize its features you need to be familiar with some basic programming – or you will maybe even have to hire a programmer.


When comparing payment gateways the first thing that you should look at is pricing. For example, Due charges a flat 2.8% transaction fee. Most other gateways, like Braintree, Stripe,, and PayPal all charge a 2.9%+ $0.30 transaction fee. You also need to make sure that there aren’t any other fees, such as setup, monthly, or annual fees.

After comparing the prices of each payment gateway, it’s suggested that you then ask the following questions:

  • How does this gateway enhance my checkout user experience (UX)?
  • Does this gateway integrate with my current platform?
  • How does this gateway promise to grow with my business?
After answering these questions you should be able to narrow down your choices, but if you’re still stuck, don’t be afraid to start small by using a hosted or pre-integrated gateway until you better understand your exact needs and the payment methods that your customers prefer.