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Pros and cons of 11 payment gateways for web, mobile & apps

6 minute read

Graham Charlton

Payment gateways play a key role in online transactions, by authorising the transfer of funds between the buyer and retailer. Any online retailer taking payments online needs a payment gateway.

In this article, I’ll look at the role of the payment gateway, and the pros and cons of some of the most popular online payment gateways.

The payment gateway allows retailers to take card and other online payments from customers. It essentially acts as a middleman between the customer and the payment processor. They also perform other tasks, such as carrying out checks for fraud.

To understand the context, let’s look at the stages involved when a customer makes a payment online:

  1. The customer places an order and makes a payment at an online checkout.
  2. The payment gateway encrypts the customer’s payment information before sending it to the payment processor.
  3. The payment processor then checks the validity of payments, contacting the issuing bank behind the customer’s card or other payment method.
  4. The customer’s payment system (PayPal, Visa etc.) receives information from the processor and confirms that the customer has the money to cover the payment.
  5. The payment gateway receives the authorisation from the processor and transmits this to the site to complete the transaction.

All of this happens very quickly, within a few seconds at most, and involves information moving back and forth to ensure the customer’s details are encrypted, and that they have the funds to cover the payment.

There are two main types of payment gateway, hosted and integrated.

  • Hosted payment gateways (PayPal is one example) redirect customers from checkout to complete a payment. The benefit for retailers here is that the gateway is responsible for the security of the transaction and the customer’s data. One possible drawback is that, since it takes customers away from the site, it can harm conversion rates. The customer may not be expecting this or may not trust the gateway.
  • Integrated payment gateways use the gateway’s API so the gateway is within the website’s checkout, so customers don’t need to be redirected elsewhere to complete transactions. This should help with conversion rates, but it also makes the site responsible for transaction security and customer data.

Pros and cons of 11 popular payment gateways:

1. PayPal

Screenshot of PayPal website

PayPal is one of the best known payment gateways and offers two options. One is the standard hosted version which takes users away from checkout to complete payment. The other is a customisable version so retailers can avoid the interruption for users.


  • PayPal is a well-known and trusted payment provider, so shoppers should be reassured.
  • The ability to integrate into checkout.
  • It’s free to set up (PayPal will charge a fee per transaction).
  • PayPal is popular and many shoppers have accounts, funds, or use PayPal credit.


  • The free version is relatively basic.
  • Fees are high for low volume sellers.

2. Stripe 

Screenshot of Stripe website

According to datanyze, Stripe is the biggest rival to PayPal, with a 20% market share.


  • Simple fee structure, and generally lower fees than PayPal. Stripe has a flat fee of 20p for all card types, plus 1.4% of the transaction value.
  • Quick and relatively easy to set up.
  • Can handle recurring payments. Useful for retailers offering subscription-based services or products.


  • For retailers taking lower value transactions, the 20p flat fee can eat into profit margins.
  • Stripe requires some coding knowledge so may not be the best option for beginners.
  • Stripe will hold payments for 7 to 10 days, which may be an inconvenience for some retailers.

3. Amazon Pay 

Screenshot of Amazon Pay website

Amazon Pay is third behind PayPal and Stripe, though it has been gaining market share.


  • It’s a hugely recognisable brand name and one that customers will know and trust when they see it on the checkout page.
  • Customers can login and pay using their existing Amazon accounts, with saved payment and address details. This can increase trust and reduces the amount of work required by users.
  • It’s integrated so users don’t need to be redirected to complete payments.


  • Fees can be expensive for lower value, lower volume transactions. There’s a 2.9% processing fee, plus a 30p authorisation fee. It could be that the brand recognition and features outweigh the cost, but it’s one for retailers to think about.
  • The settlement terms are 3 to 5 days. Not as long as Stripe, but still a potential inconvenience for merchants.

4. Skrill 

Screenshot of Skrill website

Skrill works as an online wallet and a payment gateway for merchants.


  • It’s simple to set up and therefore suitable for beginners to ecommerce.
  • It supports digital wallet payments, thereby allowing merchants to offer a greater range of payment methods.


  • There’s a 29p fee per transaction plus 2.9% of sale value, making it costly for some merchants. There are also fees for chargebacks, refunds, and more.
  • There’s a lot of chatter online about excessive fraud procedures and funds being held by Skrill. For retailers who rely on regular and predictable cash flow, and have suppliers, staff and more to pay, any delay in receiving payments from customers can cause problems.
  • Customer dissatisfaction. It’s hard to tell the truth of each complaint, but there are plenty of complaints about customer service.

5. Braintree 

Screenshot of Braintree website

Braintree, a specialist in mobile and web payments, was acquired by PayPal in 2013.


  • Simple fee structure, and cheaper than some. No monthly fees, merchants pay 9% and 20p per transaction.
  • It allows merchants to accept Google Pay and Apple Pay in addition to credit and debit card payments.


  • Braintree’s API requires some technical knowledge so may be less appropriate for beginners.
  • Lots of complaints about Braintree’s strict fraud structure, and funds being held from merchants.

6. Authorize.net 

Screenshot of Authorize.net website

Authorize.net is one of the oldest payment gateway providers for ecommerce, having started in 1996.


  • Clear fees. Authorize.net charges a £19 monthly fee and 10p per transaction.
  • It can handle recurring payments.
  • Checkout can be integrated on site, to keep customers within your checkout process.


  • Data portability. A common complaint is that Authorize.net makes it difficult and lengthy to take customer data with you when you change payment providers.
  • The user interface is another common complaint, with many feeling it’s due an update. This can make it harder to use the platform and find key information and can be an unnecessary waste of time.

7. Nochex 

Screenshot of Nochex website

Nochex offers an all in one service, providing payment gateway and payment processing services and a merchant account.


  • All in one service can be simple for those looking to set up from scratch.
  • Ease of set up and integration.
  • Payment pages can be customised to fit in with the rest of the site and checkout.


  • Nochex can only take credit and debit card payments.
  • Some complaints about customer service and funds being held.

8. 2checkout.com

Screenshot of 2checkout.com website

2checkout offers both hosted and integrated checkout options for merchants.


  • People can use multiple payment methods such as credit cards, debit cards and PayPal.
  • For merchants selling internationally, it can process 87 currencies, covering more than 200 countries.
  • Reviews suggest that it’s easy to get started with 2checkout which is useful for beginners.


  • Some complaints around slow support and quality of customer service.
  • 2checkout charges 3.5% and 25p per transaction. The percentage is higher than most of the gateways listed here.

9. Secure Trading 

Screenshot of Secure Trading website

Secure Trading was initially a gaming industry specialist, offering payments to high risk sectors. It has since broadened its appeal and provides payment services for a range of merchants.


  • It supports 29 payment methods across 57 countries.
  • It claims a high level of compliance and fraud protection.
  • Secure Trading boasts a 99.97% uptime record.


  • It’s a bespoke service so pricing is unclear and available on application only. For retailers wanting to pick an out of the box solution, this could be a drawback.
  • Not the best option for smaller businesses that just require a payment gateway, as it provides full payment service.

10. Bluesnap 

screenshot of Bluesnap website

Previously operating under the name Plimus, Bluesnap rebranded in 2012.


  • Clear and relatively low fees. Bluesnap charges 4% and 20p per transaction for UK credit and debit cards.
  • Can be integrated into website checkout.
  • Offers recurring billing.


  • Bluesnap charges an account maintenance fee (around £75) for merchants processing less than £2,500 of orders per month.
  • Some complaints about the complexity of the start up process.
  • Customer service is only available during US business hours.

11. Checkout.com 

Screenshot of checkout.com website

Checkout.com is an international provider of online payment solutions, who have been around in the market since 2012.  


  • No initial setup or account maintenance fees.
  • Checkout is customisable and can be completed on the retailer’s site.
  • Checkout.com uses interchange ++, which is a more transparent type of pricing and is roughly 0.95% plus 20p for European card transactions.


  • Not a good fit for small businesses. There are reports that the company’s pricing and screening process makes it less suitable for smaller businesses.

In summary

Choosing a payment gateway is an important decision for online retailers and, as this list shows, there’s plenty of choice and lots of information to factor into your decision.

It may seem obvious to choose one of the providers with the best fee structure, but it’s important to think about the bigger picture.

For example, Amazon may have some of the biggest rates, but perhaps the brand recognition and ease of payments for customers who already have Amazon accounts may make this worthwhile.

In other words, it may be better to pay larger fees but drive a greater number of sales.

The issue of support and customer service is also vital. If, as a business, you’re relying on these providers to process payments fast and efficiently, you need to know you can quickly access help if there are any problems.

There are various complaints about almost all of these providers online. To some extent, this is to be expected, as any company with lots of clients will make a mistake now and then, but there may be some who handle issues better than others.

It’s a big decision, so it’s worth taking the time to do your research, read reviews, and ask other business owners about the payment gateways they use.

Graham Charlton is Editor in Chief at behavioural marketing company SaleCycle. He has previously worked for Econsultancy and Search Engine Watch, and has written several best practice guides on e-commerce and digital marketing. Follow him on Twitter

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