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Payment gateways allow anyone with a website and a dream to sell online by providing a secure way to process credit cards and accept credit cards payments.
When you pick the right gateway for your business, your customers find it easy and convenient to buy from your website. If your gateway makes it difficult to complete a transaction, your customers will abandon their cart and check out your competitor’s site instead.
If you are looking for a comparison full of technical jargon about Raspberry Pi, then you have come to the wrong place. I am a writer with a M.B.A. that has trouble hooking up my DVR. I do, however, own a business that requires a payment gateway, so I have spent hours conducting research to inform my choice, which I’ll share with you now.
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E-commerce solutions and e-commerce platforms rely on payment gateways to give their customers a secure, convenient way to pay online. If you have every purchased anything using the internet, you have used a payment gateway. Some examples helping all types of e-commerce business include Stripe, Square, PayPal, Braintree, and Authorize.net.
It looks like this:
Gateways have the authority and the secure network in place to “talk” to the financial networks to verify debit card and credit card processing payment information.
Once the credit card transaction is verified, there is usually (but not always) a merchant account set up associated with the payment gateway to accept the payment from the customers’ credit card issuing bank. A merchant account is a virtual checking account (or virtual terminal), associated with your actual checking account, and is how you receive your money.
Are you with me so far? Good. Now let’s discuss the best features to look for when shopping for a payment gateway.
Before you immerse yourself with shiny marketing materials and sophisticated websites to find that perfect gateway for your business (spoiler alert: they will all say they are the best), take some time to answer these three questions to help define your priorities and create a “must-have” list.
In other words, do plugins and applications exist? If the answer is no, there are alternatives that won’t require a custom integration. Customizing a solution can be expensive and sometimes frustrating to implement and manage, so it’s better to find one that easily fits.
Your customers want a fast, secure, and easy transaction experience when they make an online purchase. Ideally you want a one-click checkout or close to it, an auto-populating feature, and access to customer data and credit information via a secure database.
When investing in a gateway, think big! Will it handle your online sales in 20 years as efficiently as it does now? Revenue aside, find out what features the gateway offers that will help your business grow. For example, some offer one-click buying via social media posts.
Now that you have your must-have list let’s compare two of the most popular payment gateways: Stripe and Authorize.Net.
First, consider your payment platform.
|Windows phone app||No||No|
If you need a payment processor that works on a Windows phone, it’s time to look elsewhere.
Next, find out who uses it.
According to my research, Authorize.Net is the popular choice for small businesses and the enterprise market while Stripe has a broader appeal that includes freelancers, small and mid-sized businesses, and the enterprise market.
Now it’s time to start comparing. Here’s a brief side-by-side comparison with a full cheat sheet to follow at the end of the article.
|Merchant Account Required||No||Yes|
|Cost per transaction||2.9% + .30||2.9%+.30|
|Subscription Cost Per Month||$0||$25/month|
|Settlement Period||2-7 days||1-7 days|
Stripe is a digital payment processor that is considered the most developer-friendly payment gateway available today. Based in San Francisco, CA with nine global offices, Stripe claims to offer the best software platform for running an internet business and has over 100,000 customers in more than 20 countries worldwide.
Since it is primarily built for developers, it requires that users have a basic to intermediate knowledge of coding to configure it properly. For those lacking in coding edification, there are plug-ins available.
Stripe provides friendly Application Programming Interfaces, or APIs, that allow businesses or individuals to accept and manage payments and payment methods using mobile devices.
Here is a quick, basic outline of how it works:
AppCoda, a leading tutorial site for app developers, created this image to illustrate the flow of information when using Stripe to process transactions:
The actual transaction or transaction fee doesn’t occur online via a website or mobile device as it appears; rather it is processed using a private server to ensure the utmost security.
You pay per transaction, or “pay as you go,” with Stripe. Their fee is 2.9% + $0.30 per successful charge. There are no hidden costs with Stripe: no setup, monthly, validation, refund, card storage, or failed payment fees. You simply pay per transaction and the money is transferred into your bank account on a 2-day rolling basis. There is no merchant account required.
For owners processing ACH payments and Bitcoin payments, there is a 0.8%+ $5 cap.
Stripe accepts all major credit cards, works with over 100 currencies and Bitcoin, and local payment instruments like Alipay. Payment services are also accepted like AmEx Express, Checkout, Android Pay, and Apple Pay.
Five Best Features of Stripe that are included:
Other features included with Stripe:
Conclusion: Stripe is a great option for owners that want an affordable, easy-to-use gateway that doesn’t require a merchant account.
Authorize.Net is a leading payment gateway provider, allowing businesses the ability to accept both credit cards and electronic checks on their websites. The money from these transactions is automatically deposited into a merchant bank account, which Authorize Net requires.
Authorize.Net has been providing payment processing services since 1996, and their website claims their solutions are designed to save time and money for small-to-medium-sized businesses. Based on online reviews, Authorize.Net is known for its dependability and is widely considered the industry standard currently serving over 440,000 merchant customers.
While Authorize.Net will accept international transactions from customers worldwide, to be an Authorize.Net customer your business must be based in the United States, Canada, United Kingdom, Europe or Australia.
This image on their website helps explain their process:
I know that is a lot to follow, but just imagine trying to run an online business without the help of a payment gateway. You would be on the phone trying to process transactions all day long!
Authorize.Net charges a $49 setup fee, $25 monthly gateway (also known as a subscription) fee, and 2.9% + $0.30 per transaction. This cost includes their Advanced Fraud Detection Suite, Customer Information Manager, Automated Recurring Billing, and a Sync for QuickBooks. According to online reviewers, these added features are the reason why they are willing to pay a monthly subscription fee.
Authorize.Net also offers eCheck.Net which is a fully integrated electronic check payment method for an additional 0.75% per transaction.
Aside from this pricing, Authorize.Net promises no extra fees like an annual renewal or cancellation fee. On their website, they claim their mission is to “keep it simple by eliminating unanticipated “gotcha” fees and long-term contracts.”
Authorize.Net accepts all major credit card payments including:
Five Best Features of Authorize.net that are included:
Other features included with Authorize.Net:
Conclusion: Authorize.Net is ideal for established businesses looking to expand their market and upgrade their image. It isn’t the cheapest online payment gateway option available due to its monthly subscription fee, merchant e-solutions account requirement and start-up cost; but many reviewers claim the customer support, solid security, and easy-to-use interface is worth the investment.
Have you decided whether Stripe or Authorize.Net is the one for you? Great! If not, here’s the promised cheat sheet to help you decide:
|Merchant Account Required||Yes|
|PCI compliance / PCI compliant||Yes||Yes|
|Settlement Period||2-7 days||1-7 days|
|Cost per transaction||2.9% + .30/trans||2.9%+.30/trans|
|Subscription Cost Per Month||$0||$25/month|
|Advanced Fraud Detection||No||Yes|
|Sync for QuickBooks||No||Yes|
|Customer Information Mgmt.||No||Yes|
|Third Party Integration||Yes||Yes|