9 Best Ecommerce Payment Gateways & How They Work (2024)

Cashless transactions have become more than a convenience for retailers—they’re a necessity. As consumers increasingly lean toward online shopping, they expect a seamless, secure, and quick payment process. 

This digital pivot enhances customer experience and opens up new avenues for revenue generation. Your business is no longer confined by geographical constraints or operating hours—but without cash, you’ll need a way to collect and process payments. 

The right online payment gateway can offer valuable analytics, reduce shopping cart abandonment rates, and provide layers of security to protect your customers and business. Here are nine of the best to choose from. 

What is an ecommerce payment gateway?

An ecommerce payment gateway is an intermediary technology layer between an ecommerce website and a payment processor that securely transmits payment information for authorization and settlement. It enables cashless transactions so online shoppers can securely enter their payment details.

While you can process payments directly through a payment processor, a payment gateway gives you added security and functionality. Ecommerce payment gateways often include additional features, such as analytics, fraud prevention, and support for multiple payment methods and currencies.

Without a payment gateway, retailers have to handle sensitive payment data directly, which increases the risk of fraud, and potentially limits the number of payment methods and currencies. 

9 best ecommerce payment gateways

1. Shopify Payments

Best for: Businesses using Shopify as their ecommerce platform or POS.

Shopify Payments is the native payment gateway for Shopify stores that consolidates payment processing, order management, and analytics into one system. It’s automatically set up with Shopify stores, so you won’t need to set up a third-party payment provider or merchant account. 

With Shopify Payments, you can sell in different currencies and may save on transaction fees for any orders processed through it or via Shop Pay, PayPal Express, or Shop Pay Installments. 

Payment processing fees: From 0.6% (varies by plan and region). Currency conversion fee: 1.5% (US) and 2% (all other supported countries and regions)

Subscription fee: $0

Accepted payment methods: Credit cards, digital wallets, and local payment methods, like Bancontact and iDEAL

2. Stripe

Best for: High-volume merchants.

Stripe sets itself apart with its advanced product suite tailored not just for online retailers, but also for subscription businesses and marketplaces. Most of Stripe’s unique features are primarily geared toward online sales, but you can accept in-person payments using the Stripe Terminal point of sale (POS) system.

The ecommerce payment gateway integrates with several online shopping carts, like Shopify, WordPress, WooCommerce, and Adobe Commerce. It operates in 46 countries and accepts over 135 currencies, making international sales easy. Plus, it’s equipped with an advanced machine-learning fraud system called Radar, which adapts to your business’s needs, adding an added layer of security. 

Payment processing fees: 2.9% + 30 cents. Additional fees: 0.5% for manually entered cards, 1.5% for international cards, and 1% for currency conversion where necessary.

Subscription fee: $0

Accepted payment methods: Bank transfers, debit, and redirect, Buy now, pay later (BNPL), cards, digital wallets, real-time payments, cash-based voucher.

3. PayPal

Best for: Small businesses that are just starting out

PayPal is a widely recognized payment gateway that’s easy to set up without requiring a contract or startup fees. This makes it ideal for small businesses that are just getting started and need a way to process payments online. 

PayPal is one of the more recognized payment gateways in ecommerce, so your customers will feel safe purchasing from you. It also offers a unique One Touch feature, which streamlines and speeds the checkout process while keeping shoppers’ financial information secure. 

The ecommerce payment gateway is available in over 200 countries/regions and supports 25 currencies. Beyond accepting credit cards, PayPal also allows payments through PayPal accounts, Venmo, and even cryptocurrencies. 

Payment processing fees: From 2.59% + fixed fee

Subscription fee: $0

Accepted payment methods: All major credit cards, pay-later options, Venmo, and cryptocurrencies

4. Square

Best for: Small and mid-sized businesses looking to set up their store for free or with minimal cost.

Square handles all the fees levied by banks, card companies, and compliance standards and only requires you to pay for what you earn. To protect customers, Square automatically monitors all payment activity and uses algorithmic automation and human observation to flag any suspicious activity.

The ecommerce payment gateway also offers hardware options for brick-and-mortar retailers needing to handle in-person transactions and mobile payments. Included are built-in inventory management features, such as real-time stock tracking, low stock alerts, and detailed sales reporting. This makes it ideal for small businesses, like restaurants, retail stores, service-type, and small mobile businesses.

Square supports 27 currencies and is available in the US, UK, Canada, Japan, Australia, and Ireland.

Payment processing fees: From 2.6% + 10 cents

Subscription fee: $0

Accepted payment methods: Credit and debit cards, digital wallets, ACH bank transfer, Cash App Pay, Afterpay, Square gift card.

5. Adyen

Best for: Enterprise-sized businesses.

Adyen provides a seamless payment experience for online and in-person sales with a focus on mobile payments. Besides real-time analytics, which offer instant insights into consumer behavior, Adyen employs dynamic card validation, elevating the security of each transaction. 

You can accept payments anywhere in the world in over 180 currencies, across almost 100 countries, and using 200 different electronic payment methods.

Payment processing fees: Fixed processing fee of €0.11 + a fee (determined by the payment method)

Subscription fee: $0

Accepted payment methods: Credit and debit cards, digital wallets, and BNPL.

6. Worldpay

Best for: Businesses in global markets with high-volume transactions.

Worldpay offers secure, integrated payment solutions that help you process credit card payments directly from your website or app. 

The platform integrates with hundreds of third-party apps so you can process all types of payments and increase international customer conversion. Plus, it operates in 150 countries and supports over 120 currencies, making it easy to accept payments from customers all over the globe.

Payment processing fees: Quote-based.

Subscription fee: Quote-based.

Accepted payment methods: All major credit and debit cards, digital wallets, local payment methods, and cryptocurrency.

7. Authorize.net

Best for: Businesses looking to provide multiple payment options.

Authorize.net can facilitate virtual terminal, virtual POS, and recurring payments. It offers merchants a range of value-added services to set up online, in-person, and manual payments, like customer information management and recurring billing. 

In addition, Authorize.net is easy to set up and use, reliable, and allows multiple integrations with other solutions. It focuses on reducing chargebacks through advanced fraud-detection algorithms to protect your business and customers.

Payment processing fees: From 10¢ + daily batch fee 10¢.

Subscription fee: $25 per month

Accepted payment methods: Credit cards, digital wallets, contactless payments, and eChecks.

8. Braintree

Best for: Businesses that make the majority of their sales from PayPal payments.

Braintree, owned by PayPal, provides a full-stack payment platform known for its flexibility, ease of use, and multiple payment options. 

Its vault feature securely stores customer payment information for future transactions and its drop-in UI simplifies the setup process for a frictionless customer checkout experience. While Braintree offers standard features like data encryption and fraud protection, its currency conversion capabilities stand out, especially for retailers targeting an international audience.

Braintree also offers a dedicated merchant account and free recurring billing, so you can create custom pricing plans, set up promotions, discounts, free trials, add-ons, and long-term subscriptions for your customers. It operates in over 45 countries and in 130+ currencies.

Payment processing fees: 2.59% + $.49 per transaction (card and digital wallets), 3.49% + $.49 (Venmo), and 0.75% per transaction (ACH Direct Debit).

Subscription fee: $0

Accepted payment methods: PayPal, Venmo (US), credit and debit cards, digital wallets, and local payment methods.

9. Skrill

Best for: Businesses that accept payments in multiple currencies.

Skrill focuses on low-cost international transactions It offers instant deposits and payouts, which are particularly beneficial for retailers concerned about cash flow management. 

The ecommerce payment gateway supports over 40 currencies, making it ideal for businesses that accept payments in multiple currencies. Besides taking payments, Skrill is useful in a wide range of operations, including deposits, withdrawals, transfers, and cryptocurrency trading.

To guarantee transaction security and prevent fraud risks, Skrill provides rigorous security standards, such as two-factor authentication and the Secure Socket Layer (SSL) protocol, which is 128-encryption-bit high-security Verisign certified. 

Payment processing fees: 3.99% (foreign exchange fee)

Subscription fee: $0 for active accounts, $5 (or equivalent) inactive fee

Accepted payment methods: Cards, cash payments, instant bank transfers, wallets, and other alternative payment methods.

Types of ecommerce payment gateways

Ecommerce payment gateways come in four primary types, each offering unique features and functionalities: 

• Hosted payment gateway: Redirects a customer to a third-party platform (host or payment service provider’s page).
• Self-hosted payment gateway: Gives businesses full control over the checkout process and customer experience so they can handle payments on their own sites.
• API-hosted payment gateway: Collects payment details via an API (application programming interface) for a smooth and integrated customer experience.
• Local bank integration gateway: Redirects a customer to their bank’s payment platform to complete the payment. After processing the transaction, the customer is redirected to the merchant’s site, where the payment status is displayed.

Payment gateway vs. payment method 

A payment gateway securely facilitates online transactions, bridging the gap between the ecommerce store and various payment methods via the payment processor. A payment method refers to how customers choose to pay, such as through credit cards, debit cards, or digital wallets like Apple Pay. 

Notably, PayPal functions as both a payment method and a payment gateway, whereas Apple Pay serves only as a payment method, requiring an existing payment gateway to process transactions. 

How do ecommerce payment gateways work?

1. The customer enters their payment details
2. The payment processor authorizes the transaction
3. The payment gateway receives and confirms authorization
4. The financial institution transfers funds
5. The ecommerce payment gateway charges a fee

1. The customer enters their payment details

When a customer finalizes their purchase, they put their payment details into the secure interface of your ecommerce store checkout page. The payment gateway encrypts and securely transmits this sensitive data, ensuring secure payment processing and authenticity.

2. The payment processor authorizes the transaction

The payment gateway provider forwards the encrypted payment information to a payment processor, which then communicates with the customer’s credit card company or bank for authorization.

3. The payment gateway receives and confirms authorization

Once it receives authorization from the payment processor, the payment gateway sends confirmation back to the ecommerce platform, allowing the transaction to be completed.

4. The financial institution transfers funds

Accepting credit card payments often requires a merchant account, which acts as a holding place for funds before transferring them to your business account. After transaction authorization, the buyer’s financial institution transfers funds from the customer’s account to the merchant’s bank account or business bank account.

5. The ecommerce payment gateway charges a fee

Most payment gateway providers charge a combination of fixed transaction fees and monthly fees. Remember to factor these costs into their ecommerce payment processing strategy.

How to choose an ecommerce payment gateway

Choosing the right payment gateway is essential for retailers who want to accept credit card payments smoothly and securely. Your choice will impact transaction fees, user experience, and even the global reach of your online business. Here are five factors to consider: 

Payment processing fees

Ecommerce payment gateways typically charge a percentage of each transaction and a fixed monthly fee. Understanding these costs is crucial for your ecommerce business’s profitability. If you’re selling a $50 product and your COGS is $24, for example, you’re left with $26. An ecommerce payment gateway that charges 3% to process the payment means you’ll lose another 78¢—a small fee that stacks up as you scale. 

The beauty of Shopify’s ecommerce payment gateway is that you aren’t charged third-party third-party transaction fees for orders that are processed through Shopify Payments, Shop Pay (including those made with Shop Pay Installments), and PayPal Express. Plus, if you’re using Shopify Payments as your primary gateway, it’ll waive transaction fees on all other payment methods you’re accepting.

Payment methods and compatibility

Your chosen payment gateway should support multiple payment methods, like major credit cards, PayPal payments, and contactless payments like Apple Pay. 

Compatibility with your ecommerce platform is also essential. Ensure your payment gateway integrates seamlessly with your online store’s software. Shopify Payments, for example, works within your Shopify dashboard. There’s no need to connect or integrate the ecommerce payment gateway with your online store—it can be done a few clicks, all from your Shopify admin.

Security features

Opt for a secure payment gateway compliant with Payment Card Industry (PCI) standards. These standards are designed to ensure that all companies that accept, process, store, or transmit credit card information maintain a secure environment. 

Most payment gateways offer robust fraud protection features. Shopify Payments, for example, protects your customer’s account and payment details. It offers chargeback protection on eligible transactions, helping you protect your business against friendly fraud—an issue that costs retailers a collective $48 billion per year.

International payment options

If your online business serves a global audience, choosing a payment gateway that handles multicurrency and international payments is essential. Transaction fees for international payments may vary, and understanding these costs is crucial.

Bear in mind that not all ecommerce payment gateways will allow you to withdraw the money into your merchant account in multiple currencies. You might take payment in GBP and AUD, but most payment gateways will charge a currency conversion fee before paying out your profit in USD. 

Scalability and support

Your ecommerce payment gateway should be able to handle increased transaction volumes and offer additional features—such as multicurrency support and integration options—as your business grows.

Choose a payment service provider that offers robust customer support, especially if you’re new to ecommerce payment processing. Shopify Payments, for example, offers help documentation to answer common questions. You can also use Sidekick, the AI chatbot inside your Shopify admin, to get personalized answers on payment-related issues.

Choose the right ecommerce payment gateway for your store

Choosing the right ecommerce payment gateway for your online store is a vital part of ensuring your business flourishes. It directly impacts the customer experience, business operations, and revenue.

Ultimately, the right payment gateway for your business will depend on your target audience, business model, nature of products or services, and transaction volume. 

If you run a Shopify store, the platform’s native payment gateway is already set up for you. There’s no need for a third-party provider or merchant account. You can process online and in-person payments through a single, secure, and PCI-compliant platform.