Which Payment Gateway Should You Use?

A payment gateway is software that facilitates, processes, and / or authorises banking or credit card information to online retailers. 

It helps ensure that the customer has the funds to pay for the product so that you, the owner, gets paid. 

PayPal is an example of a payment gateway which is popular in eCommerce

We’ve created this article so you’ll have all the information you’ll need to decide on the best payment gateway for processing online payments.

Who are payment gateways for?

Payment gateways are for both online and brick and mortar retailers. Most shop owners don’t store private financial data on their websites for security purposes. 

An external service, such as a payment gateway, hosts the data securely on their platform. They also have relationships with banks to be able to transfer funds from the customers’ accounts to the shop owner.

When should I set up a Payment Gateway?

There are several benefits to setting up a payment gateway.

Payment Gateway Security

Having an external company store all your customers’ credit card information takes the burden of responsibility off your shoulders. Companies like PayPal and Stripe have large security teams who work hard to ensure the safety of the private banking information they hold on their platforms. 

However, some online shops choose to process payments themselves which can make them a target worth hacking. To keep your shop safe, it’s better to go with a tried and true payment gateway to keep your customers’ financial information safe.

Sell Sooner

All online shop owners need to be able to process payments. With a payment gateway, you’ll be able to start running your online shop sooner. Many allow you to start selling the same day you sign up for an account.

Customer Trust

Customers are more likely to trust reputable payment gateways they’ve heard of. Seeing an option to pay via PayPal or Stripe can help make a customer feel secure in their purchase on your shop.

This is especially useful for new online shop owners with less brand recognition. You’ll want to take positive actions to help build customer trust such as ensuring their credit card information isn’t stored on your website but on a trusted brand’s platform.

How Does A Payment Gateway Work?

There are several parts to the payment gateway process. Depending on the payment gateway, a customer may need to sign up in advance. For example, PayPal users often have an account where they send and receive funds. 

Not all payment gateways require that users sign up for an account though.

The next part of the process is collecting your customer’s credit card information. This happens during the checkout process of online shopping. The credit card information is stored securely on the online payment gateway who then authenticates the purchase. 

Afterwards, the payment goes through approval. If the transaction is authorised by the payment gateway, then you’re able to ship the products to your customer knowing that you’ll be receiving payment soon. 

Shortly afterwards, you’ll receive the amount the customer paid in to your account. Sometimes the payment processor holds funds for a certain period of time (roughly 3 days) before releasing it to you. The money then gets transferred into your bank account.

Depending on the country, different payment methods and providers might be used. To simplify the current state, let’s go through some of the possible payment processors currently available.

Overview of Payment Processors

Selected payment processors in the broker model:

PayPal for MarketplacesStripe ConnectAdyenSafeCharge

Selected pay-in methods in the distributor model:


Selected payout methods in the distributor model:

WiresACH creditWiresWires


Serving a global audience is never easy. Different countries use different currencies and legislative frameworks, have different cultures and languages, and often prefer different local payment methods.

Some providers try to reconcile these differences and potential obstacles.

Global: Broker


Hyperwallet is an enterprise payout solution used by some of the most popular online brands out there. It is a great fit for large, established eCommerce businesses.


Braintree is a scalable payment solution for marketplace businesses. It supports all the biggest markets and can help you create a marketplace that supports North America, Europe, and Oceania.


PayPal is definitely the most popular global payment platform. It grew on the back of eBay and doesn’t need much introduction. It’s supported in almost every country, the API is easy to implement, and you can create an account very quickly.

Global: Distributor – Pay-in Methods


Bank wires using the SWIFT network are the most reliable method available worldwide. Unfortunately, it’s also often the most expensive option for sending money.


TransferWise allows you to create borderless accounts. It gives you an option to send and receive local payments in a large number of countries. Fees paid for local transfers are often small, and you have an easy option to convert currencies.


Stripe is a debit and credit card processor available in all big countries. It also allows the processing of ACH debit payments in the US. It allows you to quickly create an account and start work on your application.

Global: Distributor – Payout Methods


Once again, international SWIFT wires are the easiest and most accessible option to use. The cost of a transfer is going to be a factor when deciding whether to use this method or not.


TransferWise allows you to pay your providers in almost every country. It’s relatively inexpensive and allows you to use different currencies.


PayPal is the most popular payment platform used in most countries around the globe. They charge a fee for each payment, so they might become quite expensive over time.

United Kingdom

UK: Broker


Paybase is a London-based marketplace payment provider. They provide eMoney accounts with individual sort codes and account numbers.


Nochex is an enterprise solution for marketplace platforms. They provide custom solutions for UK-based customers.


SafeCharge provides payment solutions for UK-based marketplaces. They offer decent API documentation for developers.

UK: Distributor – Pay-in Methods


Bank transfers are a free and fast method of sending money in the UK. They are accessible to everyone and easy to use. It’s the most convenient method of accepting large payments in a distributor model.


Sage Pay is a UK-focused payment provider. It supports both in-store and online merchants. Unfortunately, their developer guide is not accessible publicly.


Worldpay can provide you with online card payments. They are well-adapted to the UK market and provide easy-to-follow developer guides.

UK: Distributor – Payout Methods


When it comes to payouts within the UK, wire transfers are really all you need. They are free, fast, and easily available. They will allow you to pay anyone in the United Kingdom.

European Union

EU: Broker


PayU is a well-established marketplace payment provider. It’s used by some of the biggest local eCommerce platforms in Europe and is a safe choice.


MANGOPAY is a marketplace payment processor available in all EU countries. It seems to be well-adapted to the needs of an EU-wide market platform.


Adyen is a less-known payment processor provider that supports all EU countries. It uses local payment methods, which is an additional advantage.

EU: Distributor – Pay-in Methods


Wires are very popular in the Eurozone, as well as in non-Eurozone countries. It’s because they are, for the most part, free to send and work really fast, usually delivering same-day transfers. Euro payments are sent using the SEPA network.


PAYMILL allows you to start accepting card payments online. Its biggest focus is on payments in euros.


PayLane can provide you with access to online card payments, as well as a gateway for bank-to-bank payments. It’s especially well-adapted to the needs of the Polish market.

EU: Distributor – Payout Methods


Within the European Union, the SEPA wire transfer is all you need when it comes to payouts. They are fast, usually same-day, and often free, even for international transfers.

United States of America

USA: Broker


Dwolla allows you to easily accept and send ACH payments using nothing but bank accounts. It’s developer-friendly with a lot of possibilities on how to use it.


WePay is a powerful platform underpinned by Chase bank. It’s designed for broker marketplaces, making it a perfect fit for a US-only platform.


Stripe Connect is a very developer-friendly solution that is adapted to broker marketplaces. It’s specially designed to meet US market needs.

USA: Distributor – Pay-in Methods


When it comes to accepting payments, the easiest way is to just accept bank-to-bank solutions. Paper checks, ACH credit, and wire payments are easily available. Despite availability, the time and cost involved in processing might be a serious issue.


Authorize.Net allows you to accept payments through credit, debit cards, and an ACH debit (eCheck). It’s a well-known Visa company.


Square offers a whole range of solutions for both in-store and online sellers. It does offer good API for developers, but they seem to only offer accepting payments through debit and credit cards.

USA: Distributor – Payout Methods


The easiest way to send payouts at scale is through ACH credit transfers, which are provided by banks that are part of Nacha and can be extremely cost-effective. ACH payments have a limit of $25,000 per transaction.

Chase bank offers this payment system as an additional option.

Wells Fargo offers it as Direct Pay.

Some time ago, Airbnb Co-founder Nathan Blecharczyk wrote about this payment system in his Do-it-yourself ACH direct deposit article.


This is one of the easiest ways of sending money electronically. Unfortunately, US banks charge high fees for both sending and receiving it. For that reason, they should be used only when transferring large amounts of money.


Using checks is one of the simplest ways of transferring money in the US. Unfortunately, it’s slower and more troublesome than other methods.

Potential Risks of a Payment Gateway

When choosing your payment processor partner, you should check their reputation before you start working with them. Even some of the biggest providers have terrible reviews.

The best example might be PayPal, known for blocking user accounts without any warning and freezing money for up to six months.

Stripe is a company that has arguably the best technology available on the market and is known for being very developer-friendly. Unfortunately, they also have a history of blocking accounts in the middle of the night without any warning.

For these reasons, it might be wise to keep your payment implementation generic so that it will be easy to switch providers if you happen to get shut down overnight.

When processing card payments, you need to be aware of the chargeback procedure. Sometimes, a customer doesn’t recognise a card transaction or is dissatisfied with the service or product. In such cases, they might contact the seller and try to resolve the issue.

If the problem isn’t solved, they might dispute this card transaction with their bank. If the financial institution finds that the customer was right, the money for this transaction is taken out of the seller’s account. 

Payment processor companies don’t like chargeback disputes because they are liable for all reimbursed transactions. Therefore, they are quick to drop high-risk merchants.

ACH payments are also prone to chargebacks if a transaction was unauthorised or the amount debited differed from the authorised amount. You can find out more here.

Such risk doesn’t occur when accepting wire transfers. Therefore, wire transfers may be the safest method when accepting large payments.

Local Is Better

Because of problems that might occur when cooperating with payment processor companies, it might be better to work with local providers. 

Compared to foreign-based providers, local companies often offer better cooperation, easier communication, and more trust in you.

Additionally, in case of serious problems or losing access to your money, it is always easier to start legal action against a local company than a foreign organisation.


You should set up a payment gateway on your shop before you launch. In order to accept payments from your customers you’ll need to have at least one payment gateway on your shop. Without it, customers won’t be able to buy products from you.

Most payment gateways, like PayPal or Stripe, allow you to get started the same day. Other services may have different regulations about how long it takes to set up a payment gateway. 

The sooner you set one up, the sooner you can start selling products and services. If you have any questions regarding payment gateways or need any help with setting up / changing your payment gateways, we would be happy to assist, just get in touch.

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