Merchant Services Providers
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Merchant services: Points to watch when selecting an online payment gateway

Reading time: 9 mins

Setting up an online payment system is now much more open than it long used to be. Rather than being tied to an all-inclusive offer provided by acquiring banks, merchants are now free to select a whole à la carte solution and choose all the technological bricks of their payment system.

But while this configuration has clear advantages in terms of technological potential, integration, fine tuning and even budgeting (the sum of the freely chosen parts may be significantly cheaper than the imposed package), the selection process might seem daunting for the merchant.

And choosing the right online payment gateway is surely one of the most deciding steps in building online payment systems.

Why are online payment gateways so important? How do payment gateways work and what’s their role in a payment system? What are the major online payment gateway providers? How to choose the best payment gateway?

Payment gateways explained

Payment gateways are probably the most crucial part of any online payment system. Understanding how they work immediately leads to understand how and why this is so.

The good news is that payment gateway providers are now easier than ever to find.

What is a payment gateway?

A payment gateway basically is the “tunnel” which connects an e-commerce website, and the shopper on this website to this shopper’s bank account and the merchant’s bank account.

Basically, as soon as the shopper clicks on “make payment”, he or she enters the payment gateway.

In fact, payment gateways are where all the sensitive action related to payments take place:

-  They ensure the authorisation process is appropriately achieved, by letting the user supply his credit card/payment method information and by verifying this information,

-  They transmit all data related to the purchase to the shopper’s payment services provider,

-  They transmit all the shopping cart and payment information to the merchant bank, registering the credit generated by the purchase,

-  And most importantly, they handle all this data transmission through secure, encrypted channels so that it may not be intercepted.

All in all, an online payment system is what connects a website with... money.

Current payment gateway providers

With the uninterrupted rise in e-commerce volumes and online transactions, competition on the market of online payment gateways never stopped growing. However, the sensitivity and technicality required to bring a safe and operation product are so significant that only advanced, serious organizations can survive on this market.

Although this list is by no means exhaustive, a dozen providers can be singled out:




-  Sage Pay

-  Amazon Pay


-  WePay


-  Merchant e-Solutions

-  Simplify Commerce

-  Dwolla

-  2Checkout

Discriminating factors for choosing an online payment gateway

Choosing the best payment gateway requires a set of objective criteria. There are about five major factors which can help discriminate these systems, based on commonly reported merchant needs.


This is the basic, yet crucial technical question in the selection process: will the payment gateway simply work with the website?

Putting a website and a payment gateway “together” means the code of the two can be made to work together by the website developer without the need to develop a specific interface or “connector”.

Sometimes there is no connector needed. Sometimes the gateway provider itself has developed a series of connectors so that its product can work with the major e-commerce website engines.

These e-commerce website or engines can be:


-  Shopzilla,



-  Volusion,

-  Big cartel,

-  3D Cart,

-  Virtuemart,

-  WPshop,

-  Woocommerce,

-  Akeeba,

Drupal Commerce,

-  OpenCart,

-  Zen Cart,

-  PrestaShop,

-  OSCommerce…


E-commerce necessarily relies on both software and services.

And some gateway providers can also be bundled with vital services to run an e-commerce website.

So the user may be facing to kinds of choices: making sure the gateway does come with the service he’s looking for, or making sure it can be connected with the service he’s already using or planning to use.

The most obviously needed services are a merchant account, which will be used by the merchant to handle the transactions and accept payments, and an efficient and easily reached technical hotline, as the business customer will often have to maintain the system himself. Some gateway providers also provide integration services, to directly integrate their product with their customer’s website. Bespoke programming based on specific needs may also be provided for.


As readers already understood, one of the primary reasons why there are online payment gateways at all is security, as they are supposed to be a safe “buffer” where transactions are securely made, practically “outside” the e-commerce website.

Indeed, protection against intrusion, fraud and other exploits may be the most important concern of business users. And if an e-commerce site owner wants to be trusted, he will need to completely trust the gateway provider he has chosen himself, as the acquiring bank will not be there to help him in case of a security breach.

Fortunately, there are a few objective indicators of the level of security provided by payment gateways.

First, data transmission protocols which need to be properly handled by the gateway:

-  The gateway should be able to handle SSL connection requests,

HSTS may be used to ensure browsers interact with the gateway over the HTTPS protocol,

Advanced encryption methods should be handled, like AES-256 encryption

Second, the PCI-DSS standard for online payment is what every e-commerce business should be looking at. The best way to ensure the gateway offers high-level security protection is to make sure it is PCI-DSS-Compliant certified and aim for Level 1 PCI-DSS compliance. But be careful, PCI-DSS compliance is more like an environment for the whole e-commerce website, not just the gateway. PCI-DSS certifications will only ensure this specific part of the environment can meet the PCI-DSS standard.

Global coverage

The whole point of e-commerce is to make trading with as many customers from as many different places possible, with minimal initial investment. So why forget about international shopping preferences?

These preferences can take three forms:

Payment method,


-  Language.

When it comes to payment methods, there’s more to online payment globally than the usual MasterCard/Visa duet. It’s actually even sometimes difficult outside the US to find website accepting American Express compliance.

Locally preferred alternate payment methods include:


-  Diner’s,

-  Discover,

China Union Pay,

-  Entrust,

-  ... and that’s not even counting the various online wallet systems available around the world, especially in China where they tend to eclipse credit card networks.

For foreign currency payment processing, few gateways accept more than the usual British Pound, Euro, Yen and US Dollar quartet. So if you want to sell to Australia, Mexico or Mainland China, make sure you look for the AU$, M$ or CNY feature. And not only that, make sure it is also accepted by the merchant account.

Finally, the language question. E-commerce owners would be very sorry if they learn that they have spent thousands of pounds localising and translating their website... if the most crucial part, with payment instructions, solely handled by the payment gateway, can only be displayed in English. Fortunately, some gateways provide end-user interface in up to fifteen languages.


And of course, online payment gateways (unlike many e-commerce web platforms) come for a price.

If gateway providers may propose original billing systems, the most widespread billing arrangements are:

pay-as-you-go, with transaction fees which can be a fixed amount per transaction and/or a percentage of monthly transaction value,

-  pay-as-you-go with or without setup fee,

-  pay-as-you-go with or without flat monthly subscription fee,

solely monthly subscription fees, usually incremental, based on numbers of included transactions.

Note that many gateway providers levy different commission rates depending on payment method or credit card type used.

So yes, it does seem inevitable to ask for  quotes for payment gateways to get a clear picture of just how much one specific company will have to pay to use the system, the volume of transaction plays a big part in setting the price.

A comparison of payment gateways

So, taking all these discriminating factors into account, what is the best online payment gateway? Or even only the UK’s best online payment gateway for small business? While it’s certainly not easy to give a definite answer, here are the main takeaways from what major players offer.


Probably the most well-known name in e-commerce globally with Amazon and eBay, PayPal is used by hundreds of millions of websites in the world because it’s easy to install, comes with a merchant account, and covers most international preferences.

And most importantly: it’s just trusted all over the world.


As one of the most established online payment gateway providers, WorldPay offers an all-inclusive package, with all e-commerce services. No less than 300 payment methods are accepted. And it’s not because it’s a market leader that it’s only for big websites: one of the solution’s key assets is that it scales nicely. Many payment plans are available.


Also an all-inclusive solution (it comes with the website platform, cart, hosting and SSL certificate), Shopify is one of the cheapest gateways on the market.

Sage Pay

A well-known provider of business software, especially for SMEs, Sage also jumped on the e-commerce bandwagon very early. Sage provides complete e-commerce solutions down to the accounting software, made even easier... by their own flat fees.

Security is also one of their fortes, as is, logically, the integration with all the range of Sage business software products.

Amazon Pay

If you’re not selling it on Amazon, you’ll be selling it with Amazon. That’s the smart strategy of the e-commerce giant, who just wants to be everywhere money is made online.

Therefore, their online payment gateway is one of the easiest to integrate and one of the most international.


Stripe has been growing remarkably fast in the last few years, and now supplies the full chain of services related to e-commerce, and even high-street commerce as they now do PDQ terminals.

One reason is innovation: Stripe has introduced a number of features never seen before on the market like “pay by Tweet” or bitcoin payments.


WePay boasts one of the largest number of currencies and payment methods accepted, including crowdfunding and multiple payers.

One of the most established providers of online payment gateways, meets the tightest security standards, accepts an amazing list of payment methods – even cheques! -, and has a wealth of contact methods so you can reach their customer service.

Merchant e-Solutions

Merchant e-Solutions put a spotlight on user experience customization, more specifically to accommodate for international preferences. Their hotline runs 24/7 and their API is very largely customizable, so it’ll keep your developers busy if you’re looking for a unique payment solution.

Simplify Commerce

Simplify Commerce claims to be customer and, more originally, developer friendly, so the gateway can be upgraded by the merchant’s coders and webmasters to fit their more precise needs, especially for mobile users. Security is provided by Mastercard.


A relatively new player in the game, Dwolla promises to be a remarkably scalable system and offers super-fast remittances to the merchant’s account at competitive rates, using ACH payment system. But you’ll have to ask for a quote to know exactly how competitive as they don’t publicise their rates, other than their “starter plan” which is a percentage of each transaction.


2Checkout really puts a focus on ease of integration. Comes with an API for integration and true on-site transactions, also manages up to 15 languages and 87 global currencies.

Charges flat + percentage transaction fees.