Can you integrate a payment gateway?
Generally, there are four main methods to integrate a payment gateway, with each differing greatly in terms of two major factors related to compliance with financial regulations (PCI DSS) and to what experience the user has when it comes to the checkout and payment procedure:
Payment Gateway cost
1. Cost of adding payment gateway to website
Adding a payment gateway to a website involves various costs, from monthly fees, fees per transaction and setup fees, chargebacks, and international transactions from one provider to the other.
Some providers have fixed monthly plans while others do not. Pricing is not the same at each provider but it generally covers three important types of fees: (i) initial setup fee; (ii) monthly fee; and (iii) fee per transaction.
2. Payment gateway development cost
The development cost for a payment gateway means one of two things – creating one from scratch or leveraging existing services and making it better. Creating a payment gateway from scratch could take years and a large amount of money as there are so many aspects to cover from coding to audits and certifications in some cases.
It can cost between£147,457 and £184,321 to build a payment gateway minimum viable product. But that amount could be and is often much higher. The latter varies between existing service providers.
3. Payment gateway integration cost
Integrating a payment gateway is typically free for some providers but they may charge a fixed or monthly fee instead. One, in particular, is authorize.net, which charges a setup of £36. Other providers such as Stripe, PayPal, and Amazon Pay do not charge setup fees.
4. Cost of providing a payment gateway
The cost of providing a payment gateway can be based on a one-time setup fee (£0-£250), a monthly fee (£10-£50), a transaction fee (£0.00-£0.25), and a transaction rate (1.00%-5.00%).
Generally, payment gateway providers charge monthly fees, setup fees, chargebacks, and international transaction fees. By taking a look at the same examples provided under point a, the results are as follows:
(i) For Stripe, assuming there are five transactions for each EU and non-EU card, an EU card with that amount equals £1.029 and a non-EU card £1.014 in total transaction fees for five transactions;
(ii) While Worldpay, Gateway Standard, and Gateway Advanced each comes with a fixed monthly fee, and several transactions included. Gateway Standard charges £19 for 350 transactions, while Gateway Advanced charges £45 for 850 transactions. Assuming use for five months, the former costs £95 and the latter £225; and,
(iii) PayPal charges 2.9% + 30p per transaction with no setup and monthly fees.
Assuming there are five transactions, first, at a domestic setting the results suggest £1.5435 and for cross-border transactions with currency conversion adds 2% to each of the previous results.
5. What is a payment gateway fee?
A payment gateway fee is paid to providers to cover operational expenses, software maintenance, and in general providing a secure way for customers to enter payment information such as debit and credit card details on the website.
Do you have to pay for a payment gateway?
1. Why are payment gateways so expensive?
This is due to operation expenses, software maintenance, and technology upgrades. Some providers provide a wide range of fraud-prevention services, risk prevention, management services, and users may be charged more to further increase the use of these services.
For e-commerce and online businesses, the high risks of online fraud and lack of basic data have created uncertainty between a payment gateway and the e-commerce sector. Moreover, some providers do not understand the country's risk profile, online business model, people behind the business, and lack of proposals leading to incorrect information. This causes some providers to either be selective in their customers or charge more.
2. Low-cost payment gateway
a. Payment gateway cost comparison
Comparing three mainstream providers, namely Worldpay, PayPal, and Stripe on their transaction fees suggests: (i) Stripe is best for customizability and offers no monthly fee while the provider will cost 1.4% + 20p to 2.9% + 20p per transaction fee; (ii) Worldpay, on the other hand, is known for fraud prevention and charges monthly fee of £19 to £45+ or a 2.75% + £0.20 per transaction for pay-as-you-go; and (iii) PayPal is best for accepting multiple payment methods and charges no fixed monthly fee but 2.9% + 30p per transaction fee instead.
Furthermore, Stripe will charge an additional 2% if a conversion is required. If an EU card is used, it will cost 1.4% + 20p per transaction and for a non-EU card, it will cost 2.9% + 20p. While there are no monthly costs, Stripe can be a bit difficult for new users regardless of its reasonable fees.
Worldpay has three monthly packages from Gateway Standard (starting from £19 per month including 350 transactions) to Gateway Advanced (starting from £45 per month, including 850 transactions) and Gateway Enterprise with pricing information upon request. While there is no setup fee, Worldpay might not be suitable for large businesses if the plan chosen is not Gateway Enterprise due to a fixed number of transactions.
While for PayPal, customers only need to pay 2.9% + 30p per transaction and no setup or monthly fees. However, there is a 2% cross-border fee and a 2.5% currency conversion fee.
b. Payment gateway cost calculator
Some providers, like Square, provide calculators on their websites. Many payment gateway cost calculators can help you to perform the cost projection. For example: