Best Ecommerce Payment Gateway Options for Retailers

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Cashless transactions have become more than a convenience for retailers—they’re a necessity. As consumers increasingly lean toward online shopping, they expect a seamless, secure, and quick payment process. 

This digital pivot enhances customer experience and opens up new avenues for revenue generation. Your business is no longer confined by geographical constraints or operating hours—but without cash, you will need a way to collect and process payments. The right online payment gateway can offer valuable analytics, reduce shopping cart abandonment rates, and provide layers of security to protect both ecommerce businesses and consumers.

What is an ecommerce payment gateway?

An ecommerce payment gateway is an intermediary technology layer between an ecommerce website and a payment processor, securely transmitting payment information for authorization and settlement. It is essential for enabling cashless transactions, allowing online shoppers to securely enter their payment details.

While it’s possible to process payments directly through a payment processor, using a payment gateway is considered a best practice for added security and functionality. Without a payment gateway, merchants have to handle sensitive payment data directly, increasing the risk of fraud, and potentially limiting the number of payment methods and currencies. 

Ecommerce payment gateways often include additional features such as analytics, fraud prevention, and support for multiple payment methods and currencies.

Types of payment gateways

Payment gateways come in four primary types: hosted payment gateway, self-hosted payment gateway, API-hosted payment gateway, and local bank integration gateway.

Each type offers unique features and functionalities; for example, hosted gateways redirect customers to a third-party platform, while self-hosted gateways let you handle payments on your own site. API-hosted gateways work via an API (application programming interface), and local bank integration gateways direct customers to their bank’s payment platform.

Payment gateway vs. payment method

A payment gateway securely facilitates online transactions, bridging the gap between the ecommerce store and various payment methods via the payment processor. A payment method refers to how customers choose to pay, such as through credit cards, debit cards, or digital wallets like Apple Pay. 

Notably, PayPal functions as both a payment method and a payment gateway, whereas Apple Pay serves only as a payment method, requiring an existing payment gateway to process transactions. 

How do ecommerce payment gateways work?

  1. The customer enters their payment information
  2. The payment processor authorizes the transaction
  3. The gateway receives and confirms authorization
  4. The financial institution transfers funds to the merchant account
  5. The payment gateway charges fees

The operation of an ecommerce payment gateway is a multistep process that securely handles online transactions. Here is that process in five steps:

1. The customer enters their payment information

When a customer finalizes their purchase, they put their payment details into the secure interface of your ecommerce store checkout page. The payment gateway encrypts and securely transmits this sensitive data, ensuring secure payment processing and authenticity.

2. The payment processor authorizes the transaction

The payment gateway provider forwards the encrypted payment information to a payment processor, which then communicates with the customer’s credit card company or bank for authorization.

3. The gateway receives and confirms authorization

Once it receives authorization from the payment processor, the payment gateway sends confirmation back to the ecommerce platform, allowing for the completion of the transaction.

4. The financial institution transfers funds to the merchant account

Accepting credit card payments often requires a merchant account, which acts as a holding place for funds before transferring them to your business account. After transaction authorization, the buyer’s financial institution transfers funds from the customer’s account to the merchant’s bank account or business bank account.

5. The payment gateway charges fees 

Most payment gateways charge a combination of fixed transaction fees and monthly fees. Retailers should factor these costs into their ecommerce payment processing strategy.

How to choose an ecommerce payment gateway

  1. Consider transaction fees and monthly costs
  2. Assess payment methods and compatibility
  3. Evaluate security features
  4. Scrutinize international payment options
  5. Check for scalability and support

Choosing the right payment gateway is essential for retailers who want to accept credit card payments smoothly and securely. Your choice will impact transaction fees, user experience, and even the global reach of your online business. Here are five factors to consider: 

1. Consider transaction fees and monthly costs

Payment gateways typically charge a percentage of each transaction and a fixed monthly fee. Understanding these costs is crucial for your ecommerce business’s profitability.

2. Assess payment methods and compatibility

Your chosen payment gateway should support multiple payment methods, like major credit cards, PayPal payments, and contactless payments like Apple Pay. 

Compatibility with your ecommerce platform is also essential. Ensure your payment gateway integrates seamlessly with your online store’s software.

3. Evaluate security features

Opt for a secure payment gateway compliant with Payment Card Industry (PCI) standards, a set of requirements designed to ensure that all companies that accept, process, store or transmit credit card information maintain a secure environment. Most payment gateways offer robust fraud protection features. 

Secure payment processing is vital to protect your customer’s account and payment details.

4. Scrutinize international payment options

If your online business serves a global audience, choosing a payment gateway that handles multicurrency and international payments is essential. Transaction fees for international payments may vary, and understanding these costs is crucial.

5. Check for scalability and support

Ensure your payment gateway can scale with your ecommerce business. It should be able to handle increased transaction volumes and offer additional features—such as multicurrency support and integration options—as your operation grows.

Choose a payment service provider that offers robust customer support, especially if you’re new to ecommerce payment processing. 

Best ecommerce payment gateways for retailers

Navigating through the numerous ecommerce payment gateways can be daunting for retailers. Here are some of the most popular:


Stripe sets itself apart with its advanced product suite tailored not just for online retailers but also for subscription businesses and marketplaces. The gateway is also equipped with a machine-learning fraud system called Radar that adapts to your business’s needs, adding an added layer of security.


PayPal is a widely recognized payment gateway. Its One Touch feature streamlines the checkout process. Beyond accepting credit cards, PayPal also allows payments through PayPal accounts, Venmo, and even cryptocurrencies. 


Square offers more than just online payment processing; it provides hardware options for brick-and-mortar retailers needing to handle in-person transactions as well. The platform also has built-in inventory management features such as real-time stock tracking, low stock alerts, and detailed sales reporting.

Shopify Payments

Shopify Payments is the native payment gateway for Shopify stores. It seamlessly integrates with the Shopify ecommerce platform, consolidating payment processing, order management, and analytics into one system.


Adyen provides a seamless payment experience focusing on mobile payments. Real-time analytics provide instant insights into consumer behavior. Additionally, Adyen employs dynamic card validation, elevating the security of each transaction. 


WePay provides a unique complete payment integration that keeps customers within your ecommerce platform throughout the payment process. It also comes with a specialized fraud risk algorithm designed to protect both retailers and customers. offers a range of value-added services like recurring billing and customer information management. It focuses on reducing chargebacks through advanced fraud-detection algorithms. 


Braintree, owned by PayPal, provides a full-stack payment platform known for its flexibility. Its vault feature securely stores customer payment information for future transactions and its drop-in UI simplifies the setup process and ensures a frictionless checkout experience for customers. 

While it offers standard features like data encryption and fraud protection, Braintree’s currency conversion capabilities stand out, especially for retailers targeting an international audience. 


Skrill focuses on low-cost international transactions. It is best suited for businesses that accept payments in multiple currencies. It also offers instant deposits and payouts, which are particularly beneficial for retailers concerned with cash flow management

Ecommerce payment gateway FAQ

Can you use multiple payment gateways?

Yes. Many ecommerce platforms allow you to integrate multiple payment gateways to offer a variety of payment options to your customers.

What are the benefits of a payment gateway?

A payment gateway securely processes online transactions, allowing businesses to accept credit card payments and other payment methods. It also often comes with features like fraud protection and enhanced transaction security.

What are the types of payment gateways?

Payment gateways fall into four main types: hosted payment gateway, self-hosted payment gateway, API-hosted payment gateway, and local bank integration gateway.

What is the best payment gateway?

The best payment gateway varies depending on your needs. Leading payment processors like Stripe and PayPal are popular because they can process payments efficiently and offer diverse features.