August 23, 2019 by Ben Chafetz

The Basics of Magento 2 Payment Gateways – Which One Is Right for You?

If you’re setting up a Magento 2 store and you’re wondering what your options are for Magento 2 payment gateways, you’re in the right place.

In this article, we’ll discuss everything you need to know about payment gateways, including:

  • What they are and how they work.
  • The benefits of choosing a payment gateway.
  • An overview of the top Magento 2 payment gateways on the market.

Ready to learn everything there is to know about payment gateways and Magento?

Let’s go!

What is a Payment Gateway and How Does It Work?

A payment gateway is, essentially, a “bridge” between your Magento store and your customers.

It acts as a trusted middleman, processing and approving credit card and debit card orders from customers and encrypting their transactions. Once the payment gateway approves the transaction, their credit card details will be validated securely, and money will be deposited into your bank account.

You can think of a Magento payment gateway as the virtual version of the POS (Point of Sale) terminals used in brick-and-mortar retailers and restaurants. They serve the same function – allowing merchants to authorize credit card transactions quickly, easily, and securely.

Using a payment gateway, your customer can submit their credit card details securely. The payment gateway verifies these details with the issuing bank or credit card company. Then, if the payment is authorized, the money is sent to the payment gateway by the issuing bank. Then, the money is sent by your payment gateway (fewer fees) to your bank account, where it is deposited.

Why Is It Important To Use A Payment Gateway On My Magento Store?

First and foremost, a payment gateway is the only way to securely accept credit and debit card payments on your Magento store. While it’s technically possible to configure your store to accept credit card payments without a payment gateway, using the Saved Credit Cards method. However, doing so could expose your customer’s credit card data. Plus, this method is not PCI-compliant which could expose you to liability if your Magento 2 store is every compromised.

Here are a few benefits of integrating a reputable payment gateway into your Magento store:

  • Builds consumer trust – When customers see a well-known, trusted payment gateway like PayPal on your checkout page, they are more likely to trust your store. 18% of customers say they’ve abandoned a purchase because they didn’t trust a merchant with their credit card information. Putting “trust seals” and advertising the payment gateways you use during checkout can help reduce cart abandonment, and build consumer trust.
  • Fights back against fraud – All major payment gateways have methods in place to help fight back against fraud, such as CVV checks, billing address verification, and automatic flagging of suspicious purchases. This helps keep your customer’s data secure.
  • Optimizes checkout process – Some payment processors, such as Bolt, offer integrated forms and checkout workflows that help speed up the checkout process. This can help maximize conversion rates and minimize cart abandonment. 
  • Ensures PCI compliance – Every merchant who accepts credit cards as a method of payment must abide by PCI (Payment Card Industry) standards. By using a third-party payment gateway, you can avoid handling this sensitive information yourself, and ensure that your website has an easier time meeting PCI compliance standards.

What Are My Options for Magento 2 Payment Gateways?

There are quite a few third-party payment gateways available for Magento 2. We’ve chosen the largest and most reputable for this list:

PayPal

This may come as no surprise, but PayPal is definitely one of the best payment gateways available for Magento 2. It is used in 200+ countries and supports 100+ currencies.

Hundreds of millions of shoppers have PayPal accounts, and it’s perhaps the most widely-recognized payment gateway there is. In fact, 54% of shoppers have said they are more willing to shop at a new or unrecognized business if it accepts PayPal.

Magento store owners can integrate PayPal Payments or PayPal Express Checkout in their stores. No matter which option you choose, you’ll get many benefits, including:

  • Secure checkout with the latest encryption standards.
  • 24-hour fraud monitoring.
  • Accept all major credit cards (American Express, Visa, Discover, Mastercard).

PayPal has no monthly fees, but it charges 2.9% + $0.30 for each transaction in the US. For transactions outside the US, you’ll pay 3.9%, as well as a variable fee based on the currency used for the transaction.

Braintree

Braintree is another good alternative for your Magento 2 website. It supports a huge variety of payment methods, including:

  • PayPal
  • Apple Pay
  • Venmo
  • Google Pay
  • Most major credit and debit cards (Visa, Mastercard, American Express, JCB, Discover, Diners Club)

In addition to this diversity of accepted payment methods, it has features like built-in fraud protection and secure PCI-compliant data storage. It’s been used by major companies like Uber, StubHub, DropBox, and Yelp. Like PayPal, you’ll pay 2.9% + $0.30 on each transaction.

Authorize.net

Authorize.net is widely used in Magento websites and it has security features like an advanced fraud detection suite and CVV verification. It also supports recurring payments, and the Simple Checkout feature makes it easy to integrate into your checkout process.

Authorize.net supports:

  • Apple Pay
  • E-Checks
  • PayPal
  • Chase Pay
  • Visa Checkout
  • All major credit and debit cards (Visa, Mastercard, American Express, Discover, JCB)

International payments are also accepted for business based in the United States, Canada, United Kingdom, Europe or Australia. However, Authorize.net is a bit more expensive than other options on this list. You’ll pay the standard 2.9% + $0.30 on each transaction, as well as a $25/month gateway fee.

Square

Square is one of the most successful payment processing companies in the world. Since it was founded nearly a decade ago in Silicon Valley, it’s gained a huge chunk of the market share for both in-store and online payment processing.

The Square API is easy to integrate into Magento 2. The Square Magento app also features integration with POS credit card readers, allowing you to sell items both online and in-store for a true omnichannel payment solution. 

Square supports:

  • Major credit and debit cards from Visa, Mastercard, American Express, Discover, JCB, and UnionPay
  • Apple Pay
  • Google Pay
  • Masterpass

Square has support for advanced features like recurring payments, multi-party transactions, and digital wallets. Like the other services on this list, you’ll pay 2.9% + $0.30 for each credit card transaction.

Bolt

Bolt is a newer payment gateway on the market, and it’s extremely useful for Magento 2 merchants who are interested in streamlining their checkout process and maximizing conversion rates. It supports all major credit and debit cards.

Bolt is an integrated checkout and payment gateway tool that can be seamlessly placed into your Magento 2 site, using an iFrame modal window. It’s built to offer one-page checkout that maximizes loading times and is mobile-friendly, which helps maximize conversions.

In addition, Bolt has a powerful suite of fraud management software built with Machine Learning (ML) which helps recognize and prevent credit card fraud. Bolt is both PCI DSS Level I and GDPR compliant, and no credit card data is ever stored on your server. 

You’ll even get 100% coverage for fraudulent chargebacks when you use Bolt, so you won’t have to fight with credit card companies and payment processors about fraudulent payments. 

Pricing for Bolt depends on your store and your business volume and is customized based on these factors.

Fight Back Against Fraud with Signifyd

Even if you’re using one of the above-recommended payment gateways, it’s always a good idea to invest in further fraud protections at your store. Signifyd is the largest provider of guaranteed fraud protection and a commonly-used fraud management tool for Magento stores. 

Signifyd uses big data and advanced AI to instantly sift fraudulent orders from legitimate ones while providing a financial guarantee for any approved order that turns out to be fraudulent.

The company highly automates chargeback management, provides guaranteed protection against INR (item-not-received) chargebacks and offers Seamless SCA for European merchants looking to comply with new customer authentication requirements without causing friction at checkout.

But the best feature of Signifyd may be that it comes bundled with Magento. That can make integration much quicker so you can start benefiting from the premier fraud protection platform on the market today asap.

Understand The Importance Of Payment Gateways And Explore Your Options

There are a lot of different payment gateways out there. While they all have the same basic functions, there are quite a few differences in how each one works, and the different features they offer.

So do a bit of research on your own on Magento payment gateways. You’re sure to find a great option for your store, and set yourself up for success. Need more tips for setting up your Magento store? Don’t forget to check out the 121eCommerce blog or contact us for more help.

 

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