Payment Gateway Comparison: 6 Best Payment Gateways

Payment gateways are essential infrastructure for ecommerce businesses, sitting at the final step of the buyer’s journey, where a customer either completes a purchase or abandons their cart. 

Checkout performance directly affects revenue. According to Baymard Institute, ecommerce sites can increase conversion rates by more than 35% through improvements to their checkout workflows. Payment processing plays a key role in that experience: Baymard’s research also highlights delays during checkout, failed payments, and limited payment options as common reasons for abandoned carts and, ultimately, lost sales. 

In this payment gateway comparison guide, you’ll learn what payment gateways do, how to evaluate different types of gateways, and how to choose the right option for your business.

What is a payment gateway?

A payment gateway is the technology that securely captures a customer’s payment details, encrypts that information, and transmits it to the bank that issued the card for approval. It acts as the digital equivalent of a physical point-of-sale (POS) terminal, enabling your online store to accept card payments and digital wallets.

When a customer enters their card details on a payment form, the gateway initiates a series of steps behind the scenes:

• Encryption. The gateway captures and secures the payment information and sends it to the payment processor—the service that moves funds between banks and handles authorization and settlement.

• Authorization. The processor contacts the issuing bank to verify that the customer’s account has sufficient funds and checks for fraud.

• Verdict. The bank approves or declines the transaction.

• Settlement. Approved funds are transferred to your merchant account, where they are held before being deposited into your primary business bank account.

These components are often used interchangeably, but each plays a distinct role in the payment process.

Types of payment gateways

Your checkout’s architecture can take one of two forms, and each affects the customer experience differently: Hosted gateways redirect the customer to a third-party site (like a PayPal login page) to complete payment. Although this can increase perceived security, the added step can lead to higher cart abandonment, according to Baymard research. Integrated payment gateways keep the customer on your online store throughout checkout. This can reduce friction because it doesn’t take the shopper off your site with a redirect.

Payment gateway comparison

• Shopify Payments
• PayPal
• Stripe
• Square
• Payoneer
• Adyen

Payment gateways range from platform-native solutions to specialized third-party providers. Selecting the right payment gateway depends on your business model, target market, and technical requirements. 

For example, some gateways prioritize ease of setup and tight platform integration, while others offer greater flexibility for subscriptions, custom checkout options, or international payments. Transaction fees and supported payment methods can also vary significantly across providers. Here are top payment gateway options to consider.

Shopify Payments

Shopify Payments is an integrated payment gateway built directly into Shopify, eliminating the need for a separate merchant account and simplifying setup and operations. Features include:

• Real-time payout visibility. You can monitor payouts and monthly subscription cost data in your admin dashboard.

• Built-in payment methods. Shopify accepts debit cards, card payments, and digital wallets like Apple Pay, Google Pay, and Shop Pay. 

• Fraud protection.Shopify Protect for Shop Pay offers chargeback protection from fraud.

• One-touch checkout with Shop Pay.Shop Pay is an accelerated checkout that securely saves user shipping and payment info for instant checkout.

• Shop Pay Installments.Shop Pay Installments available as a buy now, pay later (BNPL) option can reduce cart abandonment and boost conversions.

• Shopify POS integration. Sell in-person and sync with your ecommerce store’s inventory using the Shopify POS system.

Pricing: Transaction rates vary by your Shopify plan and range from 2.25% to 2.9%, plus 30¢ per transaction.

PayPal

PayPal is a widely used payment gateway known for its global reach and customer trust, particularly for international transactions. It allows customers to complete a purchase using their PayPal balance, linked bank account, or saved card details, without directly sharing payment information. It’s also known for:

• Customer trust. Customers may prefer paying with PayPal because it keeps their financial details private.

• One-touch checkout. This enables faster checkout, especially on mobile devices, with stored payment and shipping information.

• Global support. PayPal is available in many countries and supports multiple currencies, making it a common choice for cross-border transactions.

Pricing: No setup or monthly fees. Rates start at 2.89% plus 29¢ per transaction for domestic transactions. International transactions often incur higher fees of as much as 4.4%.

Stripe

Stripe is a flexible payment gateway designed for brands with more complex business needs, such as recurring billing or highly customized checkout flows. Although it can support simple setups, it typically requires more technical configuration than plug-and-play options. Features include:

• Developer friendly. It offers deep customization via application programming interfaces (APIs).

• Advanced fraud detection. Stripe uses machine learning to flag suspicious online transactions.

• Flexible billing models. The platform supports recurring payments for subscription-based online businesses, as well as usage-based and custom billing.

Pricing: No monthly or setup fees. Standard pricing is 2.9% plus 30¢ per transaction. For recurring billing, additional fees may apply.

Square

Square is a payment gateway designed for online businesses that have a heavy in-person footprint. If you sell at pop-up shops or have a permanent physical boutique, Square’s payment gateway can handle contactless and mobile payments while syncing back to your central inventory. It’s known for:

• Omnichannel support. Square accepts payments in-store, online, or on mobile devices while keeping inventory and sales data in sync.

• POS ecosystem. It combines payment processing with Square’s hardware and software for managing in-person sales.

Pricing: Rates vary by your Square plan and range from 2.9% to 3.3% plus 30¢ per online transaction and 2.4% to 2.6% plus 15¢ per in-person transaction.

Payoneer

For brands with lots of international transactions, Payoneer offers a specialized payment solution. The service is often used for marketplaces, but for ecommerce shops, it acts as a bridge for international payments and payouts. It offers:

• Multicurrency support. Payoneer lets you receive funds in multiple currencies without high conversion fees.

• Supply chain payouts. Pay suppliers globally without relying on traditional wire transfers.

Pricing: No monthly or setup fees. Free to receive payments from other Payoneer users. For credit cards, fees are as high as 3%, depending on the transaction.

Adyen

Built for larger global businesses, Adyen is a payment gateway that focuses on international transactions and local payment methods. It uses smart payment routing to handle multiple currencies across dozens of countries, helping ensure that a customer in Germany has the same seamless experience as one in California. Features include:

• Global payment coverage. Adyen processes electronic payments across hundreds of different local payment methods.

• Direct bank connections. It connects directly to card networks and local banks, helping reduce friction and increase approval rates for international payments.

Pricing: Pricing model consists of a processing fee plus a payment method fee. Fees vary by region.