How to choose the right payment gateway

A payment gateway is the software or application that securely interfaces between an ecommerce website and a customer’s preferred mode of payment, which can be their credit card, an EFT, a debit card, a gift card or even an online wallet.

Choosing the correct payment provider is an important consideration for online stores for a number of reasons:
  • Trust. According to the Baymard Institute, roughly 70% of online shopping carts are abandoned before a purchase is completed and one of the reasons for this is a complicated checkout process. Baymard researchers estimate that small formatting changes that remove friction during the payment processes could help retailers recover up to one third of abandoned carts. 
  • Security. The top payment gateways available allow a store to securely request payments from customers. When a customer clicks “order,” it handles all of the next steps. This means that if a customer recognises and trusts the payment gateway, they automatically trust the store will not defraud them. They know that the gateway is handling their money and sensitive information. They also know that the payment gateway has vetted the store to protect its own reputation and can therefore trust that the goods ordered will arrive.
  • Ensure you get paid. Your chosen gateway will verify each customer’s billing information, authenticate funds for each customer’s payment method, approve requests, allowing your store to issue a confirmation number, and most importantly, ensure you get paid. 
So, what do you need to know in order to choose the correct payment gateway for your ecommerce store?

Select the right type of payment gateway for your store

There are primarily two types of payment gateways: a hosted (external) payment gateway and an integrated payment gateway.

Hosted (external)

A hosted payment gateway solution integrates into an online store’s website, however, it redirects shoppers to the payment gateway provider's website. The benefit here is that you don't need to think about the safety of the transaction yourself. Your payment portal is completely responsible for the compliance and security of their platform. Hosted payment gateway solutions are also very simple to set up and require no customisation.


An integrated (also known as a direct or shared) payment gateway means that customers don’t need to leave your site. Instead, the data provided by shoppers is sent to the payment gateway for processing via its API. This does offer a superior user experience, but it requires you to integrate with the gateway you choose. The good news is that many website solutions, such as WooCommerce, support dozens of payment gateways. Similarly, many payment gateways have plugins of their own. If your website is built on Wix, Woocommerce, Shopify, Magento or for Mobile SDK , find a payment plugin that’s designed specifically for your chosen platform for simple and easy integration.

Pros and cons

Whilst both external and internal payment gateways cover security and get you paid, the factor you need to consider is trust. When customers are taken to a third party payment website, suspicion immediately arises. It creates a disconnect between the product or service they’re purchasing from your business and the process of paying for it. This may dissuade sceptical customers from following through with checkout.

Integrated payment gateways create a smooth flow from start to finish, ensuring that your customer conversion rate isn’t reduced due to trust. It’s thus important to consider the convenience of external payment gateway providers to your business versus the trust assurance gained from an integrated solution.

Ensure that you can cater to all the different ways your customers wants to pay

The demographics and geography of your clients should influence the payment portal you choose because there are a wide variety of ways to pay in today’s digitised world. For example, many millennials prefer to make payments via PayPal. Older audiences might prefer credit or debit cards. Some groups are even starting to look for cryptocurrency options.

Every payment portal will offer a range of payment solutions, so research them and determine what your customers would prefer. Here are some payment methods to consider:
  • Visa and Mastercard credit and debit cards
  • Diners and Amex credit and debit cards
  • Instant EFT
  • Scan To Pay (formerly known as Masterpass)
  • SCode
  • Mobicred
  • MoreTyme
  • Zapper and SnapScan
  • Payflex
  • PayJustNow
  • Apple Pay
  • Samsung Pay
  • 1ForYou.

Review all security measures

PCI-DSS is a standard mandated by card brands but administered by the Payment Card Industry Security Standards Council. It ensures the payment portal is certified for following information security standards. All top payment portals are certified.

This is critical and one of the key reasons why it is so important to work with a credible and trustworthy payment portal.

“We take the data security of our merchants and their buyers very seriously,” says Byron Clarence, Business Development Manager at PayFast. “We have a multitude of automated and manual checks in place to protect both buyers and sellers from fraudulent transactions. Online retail has a fraud rate of between 1 and 2% of all transactions. Through effective controls, PayFast’s fraud rate is currently below 0.1% and still going down.”

Peach Payments also offers advanced fraud protection algorithms and has put stringent controls in place, including real-time checks to screen transactions, a custom setup for each merchant, and blacklists to protect merchants from repeat fraudsters.

“Our advanced real-time risk checking includes over 120 advanced algorithms to detect and prevent fraud, integrations with 3rd party risk service providers such as Retail Decisions, the ability to block suspect transactions from being presented to acquirers, platform-wide card blacklists to block known stolen cards and a system that monitors chargeback rates in the merchant console,” explains Peach Payments.

Make sure your payment gateway’s security measures provide the following features:

Advanced real-time risk checking
  • Real-time risk checking and reporting to merchant
  • Advanced algorithms to detect and prevent fraud
  • Integrations with 3rd party risk service providers.
Minimised chargebacks
  • Block suspect transactions from being presented to acquirers
  • Platform-wide card blacklists to block known stolen cards
  • Monitor chargeback rates in merchant console
  • Flexible Implementation
  • Custom risk rules and algorithms tailored to merchant profile
  • Selectively apply rules to transactions to optimise costs
  • Unified view on fraud prevention across all channels including mobile apps.
Optimised conversion
  • Increase accuracy in identification of fraudulent transactions to minimise impact on conversion
  • Flag transactions for manual review instead of rejecting to reduce false positives
  • Optimise the use of additional authentication tools such as 3DSecure.

Investigate whether there are additional special features that your online store can leverage

Some features you can lookout for when choosing a payment gateway that works best for your business:
  • Multi-currency transactions
  • Recurring payments and subscription billing
  • Payment links that can be through email, WhatsApp and any platform you choose to sell from
  • Accounting software integration for easy money management
  • Payouts that allow you to pay staff and expense straight from your merchant account
  • In depth reporting on transactions for powerful business insight
  • Card tokenisation that allows you to store customer card details.
New features are constantly being developed, so keep researching to find ways to reach your market and convert customers.

Review your costs

The technical aspects offered by a payment portal are important, but so are the financial aspects. While making your choice, keep these points top of mind:
  • There are no hidden fees that may force you to overspend 
  • Whether you will be paying commission or transaction fees
  • If you pay per order or a monthly fee
  • What you set up costs will be
  • The processing speed of your chosen payment gateway – this isn’t a direct cost, but slow speeds result in abandoned carts, which does impact the bottom line.

What are your options?

There are a multitude of online payment gateway options to choose from. It takes a lot of thorough research to firstly figure out what you need, and secondly a payment gateway that can provide for you.
  • You can view Peach Payments’ fees page here
  • You can find PayFast’s fees structure here.
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