Payment gateways allow both brick-and-mortar and online sellers to offer their customers secure ways to pay by credit card or digital wallet. As technology opens up new payment options and marketplaces, payment gateways are essential in helping businesses grow.
With the popularity of digital payment systems like PayPal, customers are driving the demand for safe, hassle-free buying. In 2018, Millenials and Gen Z had a combined purchasing power of $350 billion. Just two years later, Gen Z alone accounted for 40% of global consumers, increasing the demand for merchants to cater to this growing demographic.
We looked at over a dozen payment gateways for this review, based on payment types, cost, ease of use, integrations, support, and more. Here are our top picks.
The 7 Best Payment Gateways of 2020
Authorize.Net: Best Overall
Established in 1996, Authorize.Net is one of the oldest payment gateway providers around. Today it serves over 430,000 merchants and manages over one billion transactions every year. We chose it as the best overall because it’s easy to set up and use, works with nearly any merchant account, and accepts transactions from customers all over the world.
Due to its longevity, Authorize.Net has partnerships with most merchant account providers, allowing its users to accept payments from major credit cards, debit cards, and digital payments, as well as e-checks and foreign payments from most countries.
Authorize.Net’s platform is straightforward and easy to use, making it a great choice for new sellers and experienced users alike. In addition to accepting more payment types than most other payment gateways, it is also one of the very few to accept PayPal.
Authorize.Net makes it easy for its customers to use their existing merchant account with its payment gateway. However, the company also offers an all-in-one package that includes both a merchant account and a payment gateway. Both options offer users a host of other features, including recurring payments, invoicing, fraud prevention filters, customer information management, mobile payments, a virtual point-of-sale (POS) system, and an optional card reader.
In addition to the features listed below, both Authorize.Net plans offer the option to add an account updater for recurring payments and the ability to accept electronic checks for additional costs. There are no setup fees for either plan.
Payment Gateway Only
- $25 per month
- $0.10 per transaction
- $0.10 daily batch fee
- Fraud prevention
- Customer information manager
- Recurring payments
- Simple checkout
- $25 per month
- 2.9% plus $0.30 per transaction
- All Payment Gateway Only features
Stripe: Runner-Up, Best Overall
Launched in 2011, Stripe is a payment gateway provider with a strong focus on technology and development. The company has 2,500 employees in 14 countries and claims that 90% of online shoppers in the U.S. have bought from businesses using Stripe. We chose it as our runner-up because it offers customizable payment solutions at competitive rates.
Stripe's strong focus on developer-driven custom payment solutions allows its products to grow and scale with companies of all sizes and adapt to their needs. Customers can build the platform they like or take advantage of Stripe's native integrations with existing ecommerce platforms, including WooCommerce, Shopify, Wix, Squarespace, and BigCommerce.
Stripe offers many of the features one would expect from a global payment gateway provider, including support for over 135 currencies and payment types (including PayPal), mobile payments, subscription billing, one-click checkout, and user dashboard with robust transaction tracking and reporting.
Although Stripe really shines as an e-commerce payment gateway, it does offer a virtual POS that makes it easy for users to unify their online and offline channels. Stripe Terminal works on mobile devices and computers as well as with pre-certified card readers that support chip cards and contactless payments.
Unlike Authorize.Net, Stripe does not have a monthly gateway fee. It also offers 24/7 email, phone, and chat support as well as access to an extensive online support center. In addition to the plan listed below, customers can contact Stripe to get pricing for customized solutions.
- 2.9% + $0.30 per transaction
- ACH direct debit 0.8% ($5 cap)
- Embeddable checkout
- Recurring subscriptions and invoicing
- Local payment methods
- Real-time reporting
- QuickBooks and NetSuite support
- iOS and Android apps
- 450+ platforms and extensions
- Payments for platforms and marketplaces
- Machine learning fraud prevention
PayPal: Best for Online Businesses
Created as a digital wallet in 1999, PayPal was famously acquired by eBay in 2002 and has become one of the most versatile and recognized online payment processors. We chose it as the best for online businesses because it gives customers the option to pay with PayPal as well as just about any other payment type, all at competitive rates.
Due to its trusted name and widespread use, PayPal claims that offering its service as a payment option to customers can increase checkout conversions by 44%. Adding PayPal as a payment option is also extremely simple. Users just create an account and add a “Pay by PayPal” button on their website.
Users who want to use PayPal’s advanced payments and checkout features will need to sign up for PayPal Payments Pro. This plan lets users accept payments from American Express, Visa, Mastercard, Discover, Venmo, and PayPal Credit; integrates with major e-commerce platforms like Shopify, Squarespace, BigCommerce, and WooCommerce; and offers phone-based credit card payments, online invoicing, and in-person payments.
- $30 per month
- 2.9% + $0.30 per transaction
- Accept credit and debit cards including multicurrency payment processing in six currencies
- Accept PayPal payments in 26 currencies from over 200+ markets
- Accept PayPal Credit payments (U.S. only)
- E-commerce payment gateway
- Options to simplify PCI compliance
- Virtual Terminal to accept phone payments
Square: Best for Brick-and-Mortar Businesses
Created in 2009 by Twitter co-founder Jack Dorsey, Square opened the door for retailers by providing an online payment solution that could be used on smart devices rather than bulky and expensive POS hardware. We chose it as the best for brick-and-mortar businesses because it lets users accept both in-person and online payments with no setup and startup costs and includes a free mobile card reader.
Although Square accepts all major credit cards as well as other payment types like Apple Pay and Google Pay, it doesn’t support PayPal, one of its main competitors. Square also can’t process ACH or electronic check payments, though it does allow users to accept payments by website, invoice, or over the phone.
One of Square’s best features is its easy setup. Users can download the software for free on any iOS or Android device and take payments using a plugin mobile credit card reader Square offers free of charge. Merchants can accept credit card payments using just a smartphone or tablet, making it a perfect choice for food carts, farmer’s markets, craft booths, and other mobile merchants.
- Free POS app
- Free magstripe reader
- 2.6% + $0.10 in-person or e-commerce transaction
- 2.9% + $0.30 invoive transactions
- 3.5% + $0.15 manual or card-on-file entry
Braintree: Best for Startups
Originally launched as an online payment platform in 2010, Braintree was acquired by PayPal in 2013 and now supports in-store as well as online payments. We chose it as the best for startups because it’s an easy-to-use platform with simple pricing that accepts all major payment types.
What Braintree lacks in new and exciting features it makes up for in simplicity. It features a sleek interface that creates a seamless checkout experience on any website and integrates with most major e-commerce platforms, invoicing software, analytics apps, and more.
Because it’s a subsidiary of PayPal, Braintree offers a merchant service account and accepts all major credit cards, digital wallets, ACH deposits, Venmo, and PayPal in over 130 currencies. Additional features include recurring billing, a customer information manager, automatic account updaters, reporting tools, data encryption, and fraud prevention tools.
Braintree also offers in-store payments using a mobile app and PayPal Here card reader, customizable checkout flows, customer loyalty and rewards, and the ability to securely share sensitive customer and payment data with trusted partners using Braintree Vault.
- 2.9% + $0.30 per transaction
- Merchant account and payment gateway
- Advanced fraud protection
- Data encryption via the Braintree Vault
- Phone and email support
- Data migration assistance
- All available regional payment methods
- Recurring billing
- Third-party integrations
- Integration support
- Interchange plus pricing options
WePay: Best for Multiple Channels
Originally created in 2008 as a peer-to-peer group payment platform, WePay offers an integrated merchant account through Chase Merchant Services with a payment gateway. We chose it as the best for multiple channels because it makes it easy for merchants to handle complex payment requests across a variety of online platforms.
As with most payment gateways, WePay accepts payments from all major credit cards, Chase Pay, and ACH payments and can handle complex payment requests, including multiple payers and crowdfunding campaigns. Merchants can set it up using just an email address and start accepting payments immediately.
What makes WePay particularly useful for omnichannel marketing is its customization features. Merchants can create customizable checkout flows that support both online and in-person payments and refunds. Developers can use WePay’s APIs to create anything from a simple payment links to leveraging Chase Merchant Services’ same-day deposit and transaction reporting features.
WePay also offers a mobile POS, 100% coverage for losses due to chargebacks and scams, and robust support from training to escalation as well as a detailed knowledge base.
Although WePay doesn’t offer pricing on its site, third-party research shows that the company offers competitive rates of 2.9% plus $0.30 per transaction and process ACH payments for 1% plus $0.30 per transaction.
2Checkout: Best for Selling Internationally
Created in 2000 to allow companies to accept online and mobile payments from buyers around the world, 2Checkout currently serves over 20,000 clients worldwide. We chose it as the best for selling internationally because it offers localized buying experiences for customers in over 200 countries and territories and supports nearly 100 currencies.
2Checkout offers a payment gateway called 2Sell that accepts all major credit cards and payments, including MasterCard, Visa, American Express, JCB, and PayPal. It also supports payments in 15 languages and 100 different currencies. Users can host their own checkout page, set recurring transactions, compile payment history reports, and integrate the platform with over 120 ecommerce platforms, shopping carts, and invoicing systems.
2Checkout also lets merchants sell services, digital products, physical products, and subscriptions and features an account updater to keep customer information up to date. It also offers global customers mobile-friendly localized buying experiences, coupons and discounts, and comes with shopping cart templates and tools to help boost conversions. 2Checkout also offers users a commerce dashboard with instant insights into sales and other customer metrics.
- 3.5% + $0.35 per transaction
- Sell instantly in 200 countries/territories
- Integrate quickly with any of 120+ carts
- Scale up for international growth
- Sell any type of product
- Access to recurring billing
What Is a Payment Gateway?
At its core, a payment gateway is software that encrypts a customer’s credit card information and sends it to the issuing bank for approval when they make a purchase online or in a store. This transaction determines whether a customer’s purchase is approved or declined.
A payment gateway is not a merchant account, however. A merchant account is what a business or merchant needs in order to be able to accept credit cards or digital wallet payments (like PayPal). Although some payment gateway providers also offer a merchant account as part of their services, most payment gateways are standalone products.
How Does a Payment Gateway Work?
A payment gateway can be added on a website or point-of-sale (POS) system to process credit card or digital wallet payments. When a customer swipes their card or enters their payment online, the payment gateway encrypts their information and sends it to the bank that issued the card. If the transaction is approved, the merchant then fulfills the order. The process typically takes just seconds.
Security is key to payment gateways. If customers don’t feel that they can trust the merchant taking their payment information, they may decide not to make a purchase.
How Much Do Payment Gateways Cost?
Most payment gateways offer purchase-based pricing, with 2.9% plus $0.30 per transaction being a typical industry rate. Some also require monthly gateway subscription fees between $25 and $30 per month.
In addition to providing secure information transmission, payment gateways also tend to offer sales reporting, account updating, and fraud protection features as well as integrations with third-party e-commerce platforms.
Are Payment Gateways Worth the Cost?
Any business that wants to accept credit card or digital wallet payments (other than PayPal) need a payment gateway. Because transaction rates can vary, it’s important for sellers to choose both a merchant account and payment gateway that offers rates that won’t cut into their profit margins.
How We Chose the Best Payment Gateways
We looked at over a dozen payment gateways for this review. At the top of our list were providers that offered support for the most payment types. We balanced these features with cost since not every business needs to offer its customers every type of payment option.
Integrations were also important in our review, and we made sure to choose software that worked easily with major e-commerce and POS systems. Finally, since the benefits a payment gateway provides to a merchant can be negated if a customer doesn’t feel safe sharing their payment information, we made sure to choose gateways with strong reputations and security features. As customers look for easier ways to pay and businesses seek easier ways to sell, payment gateways will provide the security and opportunities both need.
McKinsey Insights. "The influence of ‘woke’ consumers on fashion." Accessed September 11, 2020.