Choosing the right WooCommerce payment gateway for your online store is an important decision, but often overlooked by business owners. The gateway you select isn’t just a back-end detail; it directly affects your customers’ experience and your store’s overall success. A smooth, secure, and reliable payment process can mark the difference between closing a sale and losing a customer at the last moment.
There’s a lot to consider, from transaction fees to security features and compatibility with your existing systems. This article will help you better understand the choices you have so you can select the gateway that best fits your needs.
What is a payment gateway?
A payment gateway is an intermediary between your store’s checkout process and financial institutions (like banks or credit card companies), and they are crucial to processing payment information securely.
Basically, it works as follows: When customers are ready to make a purchase on your WooCommerce site, they enter their payment details at the checkout page.
The payment information is then securely transmitted to the payment gateway. The gateway is responsible for encrypting the data and sending it to the bank or payment processor for approval.
Once the bank approves the transaction, the payment gateway returns this information to WooCommerce, completing the order. Finally, the payment gateway helps facilitate the transfer of funds from the customer’s account to the merchant’s account. If the transaction is denied, the gateway will provide an error message, and the order won’t be processed.
What should you look for in a payment gateway?
There is a lot to consider when selecting a payment gateway. The first one that comes to mind for business owners is transaction fees since they directly impact profit margins, but they are not the only consideration.
Security is also a significant factor since payment gateways play a massive role in protecting your business and customers. To ensure safe transactions, it’s crucial to work with payment gateways offering fraud protection, encryption, and PCI compliance.
Additionally, it is key to select a payment gateway that can integrate smoothly, not only with WooCommerce but with the rest of your eCommerce setup, such as accounting software, CRM systems, and inventory management tools.
We also advise selecting a gateway that offers customers a simple, straightforward checkout process. Complicated or lengthy payment procedures can lead to cart abandonment and negatively impact your business.
Finally, as we frequently hear, “the customer is always right,” so aim to offer your customers payment gateways they already use and trust. A popular gateway that supports various payment options, including credit/debit cards, digital wallets, and alternative payment methods, will help you cater to a broader audience.
Payment Gateway Options
Built-in Payments
WooCommerce has built-in payment options that include Direct Bank Transfers, Cash On Delivery, and Check Payments, but it does not accept direct payments with bank cards. You must install an additional payment gateway to accept bank card payments and other solutions.
WooPayments
WooPayments is an official WooCommerce plugin now available for free in 17 countries. It allows you to accept credit and debit card payments directly on your site.
However, transaction fees apply on a pay-as-you-go basis. When a customer’s payment is registered, the fee is deducted directly from that payment before it is deposited into your bank account.
WooPayments works in partnership with Stripe, which we will briefly discuss next. While they both use the same processing mechanism, neither solution is 100% the same. WooPayments is meant to integrate seamlessly into the WordPress dashboard, with all transaction data and information displayed right on your site. This close integration allows you to perform all common business tasks without leaving your admin dashboard.
Additionally, using WooPayments allows you to use a multicurrency setup, but you’ll need an additional plugin to set up this feature using Stripe alone.
Stripe
Stripe can also be easily integrated into WooCommerce using a simple plugin, allowing you to accept digital wallet, credit, and debit card payments. It also offers advanced fraud protection and is a popular choice for businesses of all sizes.
As you have read above, there are some advantages to using Stripe via WooPayments instead of using the Stripe plugin on its own, but there are some options where Stripe will be a better fit.
To start, Stripe is available in more countries than WooPayments, so if you are from a country that doesn’t support WooPayments, Stripe will be the only choice. Additionally, with WooPayments, instant deposits are only available in the US, but using the Stripe plugin, merchants in the US, Australia, Canada, Singapore, and the UK are eligible. You should also consider that advanced Stripe features are available only through the Stripe plugin.
PayPal
As one of the most recognized payment gateways, PayPal offers a trusted platform with a global reach. It supports various payment options, including PayPal accounts, credit/debit cards, and local payment methods. PayPal’s brand recognition can boost customer confidence, especially for international sales.
Paypal also offers a “Pay Later” option for customers in select countries. In this option, customers can pay in installments while you get paid upfront, offering a great solution for both parties.
With their advanced payment processing option, you can also customize the look of the payment fields and set different levels of fraud protection.
Keep in mind that PayPal does charge a fee per transaction, which is around 3%.
Square
Square is a PCI-DSS compliant solution that allows you to process credit and debit card payments. It has the advantage that it offers straightforward flat-fees per transaction (which vary per country) and it allows merchants to access their funds instantly. Additionally, it allows you to accept digital wallets, Cash App payments and gift cards.
However, you should keep in mind that Square is available in a limited list of countries, in comparison to other countries.
Amazon Pay
Amazon Pay allows customers to use their Amazon account to make purchases on your WooCommerce store. This can be particularly attractive to customers familiar with and trusting Amazon’s payment system. It also reduces friction since customers don’t need to create a new account on your site.
Amazon is also ideal for international online stores, since Amazon supports multiple currencies and allows your customers to shop in their local currency.
WooCommerce Crypto Payments
If you want to accept crypto payments on your WooCommerce Crypto Payments is a great plugin to add to your site. It integrates the MetaMask wallet with your WooCommerce store, allowing your customers to make purchases using cryptocurrencies. Leveraging the Metamask wallet, your customers can also enjoy lighting fast transactions and take advantage of the security of decentralized finances.
Should You Have Multiple Payment Gateways?
Multiple payment gateways can be a smart move for many online stores, but it’s not a one-size-fits-all solution.
Increased Payment Options for Customers
One of the most apparent benefits is that offering multiple gateways allows your customers to choose their preferred payment method. Whether it’s credit cards, digital wallets, or alternative payment methods like “buy now, pay later” services, giving customers more options can reduce cart abandonment and increase sales.
Redundancy and Reliability
Relying on a single payment gateway can be risky. If that gateway experiences downtime or technical issues, you could lose sales. Having multiple gateways in place ensures that if one service fails, customers can still complete their purchases using an alternative method.
International Sales
Different regions and countries have preferred payment methods. Integrating multiple gateways allows you to cater to a global audience, offering localized payment options that align with regional preferences, currencies, and regulations.
Reduced Transaction Fees
Different payment gateways have varying fee structures. By offering multiple options, you can strategically route transactions through the gateway with the lowest fees for a particular payment method, saving on costs in the long run.
Customer Trust and Confidence
Some customers have solid preferences or trust specific payment gateways more than others. Offering widely recognized and trusted gateways can build customer confidence, which is crucial for increasing conversion rates.
Do you Need More than One Payment Gateway?
It is not necessary to have multiple payment gateways set up on your online store to succeed with your online store; however, in some cases, it can prove to be beneficial. Different customers prefer different payment methods, so by offering multiple gateways, you can cater to a broader audience. Additionally, if you sell internationally, having numerous payment gateways best allows you to cater to your customers’ preferences since specific gateways might be more popular or widely accepted in certain countries.
Additionally, relying on a single payment gateway can be risky. If your payment gateway of choice experiences downtime or some other technical issues, your customers will be left with no option to complete their purchases.
However, managing multiple payment gateways can add complexity to your site and be a bit more challenging, especially for beginner WooCommerce users.
Conclusion
Choosing the right payment gateway, or combination of gateways, for your WooCommerce store is crucial for optimizing the customer experience, expanding market reach, and ensuring smooth, reliable transactions. If you’re unsure about the best approach or need expert assistance in configuring your WooCommerce payment systems, our team is here to help. Our ninjas will ensure your store is set up for success with seamless payment gateway integration tailored to your specific needs.