An introduction to payment gateways

The festive season is fast approaching and with it comes a rise in purchases online, especially in 2020 when restrictions are hitting physical presences, so getting a payment gateway should be an SME’s biggest priority.

Although they sound daunting and confusing, they really aren’t and most major content management systems come with built in support for them. Getting one online is an easy task and it just comes down to picking your favourite.

What is a payment gateway?

When you set up an e-commerce presence, you have two things that you need to do to be able to take payments from customers: a cart and a payment gateway. The cart comes as part of any major platform and you shouldn’t need any work to sort this out. The payment gateway needs some work to connect to a provider and doesn’t always come as part of a package.

The payment gateway is an extra piece of software, offered by a third party, that enables you to charge your customers credit or debit cards. 99% of the time a gateway provider will charge a percentage to process your payments – depending on who you choose, determines how much this extra change is and you should try and take this into account when setting up your costs.

The two most popular payment gateway service providers are PayPal and WorldPay, with the latter being one of the longest founded.

Why do you need a payment gateway?

In most cases small businesses won’t need one for basic websites, occasionally developers include one as a just incase but for security reasons I strongly advise against this. As payment systems will become a target for hackers, keeping it up to date will be important and if it’s not used as part of your core websites infrastructure then it’ll be forgotten about and act as a doorway.

If, however, you plan on running a shop from your website then you’ll need to think about getting one. eCommerce platforms such as Magento and WooCommerce come with easy integration methods but some other CMS providers will need some work. If you want to build a shop online then I would recommend immediately going for an eCommerce solution over a bog standard CMS anyway.

I already have an eCommerce website do I need a payment gateway?

Yes. An eCommerce platform is the piece of software you use to create a website or online shop. Where a payment gateway is a secondary piece of software and it enables your shop to take payments. Without a gateway you won’t be able to accept payments on your website.

However, if you own an Etsy shop then you don’t need to worry about this. Etsy payments automatically integrates with PayPal and works as an inbuilt payment gateway. If you want to become independent from the Etsy ecosystem and host your own shop then you’ll need to look into getting yourself a solution.

Who are the providers of payment gateways?

There are lots on the market and each have their own benefits. Some of the most used and trusted ones are: PayPal, WorldPay, Sage Pay and Amazon Payments. However, Stripe is quickly becoming a major competitor within small businesses and what one you choose depends on your requirements.

You should think about all the things you will need before setting up a gateway, because it’s not necessarily going to be used just on your website. A unified system that enables payments physically and virtually might be the right choice.