The traditional method of money transfer to various vendors, sellers or service providers is through banks. It was considered the most secure and the only way to transfer money across the globe. The respective person visits the banks, clears the documentation and the money gets transferred. This practice took a paradigm shift with the emergence of various payment gateways like Stripe, Square, Dwolla, Paypal and Braintree. Payment gateways simplified this task by taking care of payment processing, security and compliance. If you are looking out for the best payment gateway integration, then you need to read this blog. Here we have given the top 5 payment gateways comparison.
The demand for eCommerce apps is skyrocketing, and so is the demand for payment gateways. People are looking out for hassle-free, online payment systems using which they can handle the cash-free transactions. Isn’t that something that is beneficial even in times of pandemic COVID-19?
A payment gateway has the potential to define 50% chances of your eCommerce success. Stripe, Square, Dwolla, Paypal and Braintree are arguably the ones holding the top spots. But which overrides the other is a difficult question!
With the help of our expert team members, we have analyzed the features and functionalities and tried to simplify the things for you. You can hire mobile app developers to integrate the same into your application. Keep reading….
There are a few key features that define the functionality of payment gateways. Have a look…
Payment processing speed:
The speed of fund transfer plays a major role in judging a payment gateway authenticity. Upon the purchase, the fund should get transferred to respective bank accounts instantly.
It is a vital requirement that payment gateways need to have a range of payment methods available. Credit cards, debit cards and digital wallets are a must-have feature for a payment gateway success.
Payment gateways charge some amount of money for account set up, cancellation and for every transaction you make using them. This amount may vary from company to company.
Payment gateways charge a fixed amount on a monthly basis for subscriptions, content, online courses, etc.
Securing and complying with the guidelines is one of the main features on which payment gateways need to focus upon. It can be in the form of PCI DSS, Fraud or Chargeback prevention certificates. A payment gateway is responsible to handle the merchant’s as well as the client’s safety.
Depending on the payment gateways, the service offers PSPs that can be integrated into Shopify, WooCommerce and other eCommerce platforms.
Since these gateways are used for even global transactions, it is important that it should provide a range of currencies. It is an expected feature that a payment gateway should allow customers to pay in local currency. This helps in gaining the trust of the customers in the gateway.
The comparison that we are going to draw here is between Stripe Vs. Square Vs. Dwolla Vs. PayPal Vs. Braintree.
The most considerate and accessible payment gateway on the list is PayPal. Its story goes back and relates to Elon Musk’s startup in the year 1998. It gradually gains popularity as the most standard form of peer-to-peer transactions.
Most of the eCommerce platforms prefer integrating PayPal because of the ease of sending and receiving money across the borders.
The top companies on the list using PayPal are Pandora, eBay, Expedia, and Booking.com. Google trends suggest that PayPal has gained more interest from the users in comparison to the other payment gateways. Almost 12 % of the US market place prefers using Paypal over others. A few drawbacks of PayPal are: It has inappropriate documentation and the API/SDKs are not very supportive.
It is a standard option for niche markets as well as general-purpose marketplaces.
A strong competitor to PayPal according to G2Crowd payment gateway research & another standard payment gateway for the marketplace is Stripe. It is easy to integrate Stripe using the well-built SDK of the gateway.
It is well known for an excellent customer support service it offers along with processing the transaction immediately. Stripe is extremely useful to digital startups as it doesn’t require a merchant’s account. It accepts all major debit cards and credit cards along with obscure methods like AliPay, Android Pay, Apple Pay, Bitcoin.
Stripe is often admired for its API which is a strong factor for being a good competition to PayPal. It has a commendable onboarding strategy while they also offer the aforementioned legal and accounting services.
Another emerging gateway in the marketplace is Dwolla. It became available in the US market in the year 2010 and soon became famous for handling seamless banking transactions. The documentation is easy and the API is uncomplicated. The API offers a variety of features and the user-friendly experience using dynamic interface has won hearts.
Dwolla is basically an eCommerce company that wishes to allow its customers to move money without any hassle of paper checks. Dwolla accepts all the major global credit cards and transfers money from users’ bank accounts to another one. And to summarize, it is the best fit for small, medium and large scale business enterprises.
A major weakness of the gateway is, the user accounts should be located in the US only. The reason being, it doesn’t support international payouts.
Another player in the comparison list is Square. Square functionality and service are almost the same as Stripe but have a unique point of the selling system. It provides flexible payment customization. Square sends the user a card reader which comes for a price, and also a software to manage the offline store.
It accepts all the normal credit and debit cards facilitating you to navigate within the application with ease. It is easy to track and manage your transactions and the company’s performance using Square.
Square is highly preferred for medium-scale employee management because of its capability to generate reports. This report gives you a clear and bigger picture of the transactions going on within the company.
An amazing part of this payment gateway is that it facilitates the calendar and booking system. This means, a customer can easily book a date and pay online swiftly. This is the major feature that differentiates Square from other payment systems.
It is highly flexible for small business operations! Additionally it offers virtual loans depending on the business performance. You are free to check the loan type on its dashboard and you need to select one and apply.
If approved, you will get money into the account on the very next business working day. Square takes the loan repayments from the sales you make and hence you need not worry about the loan repayment dates. Isn’t that a tempting payment gateway to use?
Another Stripe competitor on the list is Braintree. Apart from security and user-friendliness, payment gateways need more functional diversity. Braintree has it all!
Braintree acquired Venmo and then PayPal acquired Braintree and then eBay acquired Braintree. It rolled into larger and larger markets and soon gained immense popularity.
It is a part of PayPal but has features similar to that of Stripe. Braintree accepts all the major credit and debit cards, web wallets along with PayPal, Android Pay, Apple Pay, Bitcoin, ACH and Venmo.
It is easy to integrate because of its thoroughly written API. Braintree extends exceptional support to developers while it gives high-end customer support. It is recommended to use Braintree for large as well as small enterprises. Airbnb and Uber are already in the client list of Braintree.
Some major advantages of Braintree are instant separate transfer, single checkout with multiple items from different sellers.
This was a brief about the top 5 payment gateways however, each one overrules the other when they are applied to the specific use cases. Depending on the requirements of an individual business, the winner of the competition will differ.
In order to have a more detailed picture, we are going to describe the comparison in tabular form. Have a look…
Difference between payment gateways:
|Merchant account||It is not required||It is not required||It is not required||It is required||It is required|
|Chargeback Fees||$20||$15||---||$15||It doesn’t charge any chargeback fees|
|Payment processing speedt||It happens immediately||It happens immediately||It happens immediately||It happens immediately||It has immediate and scheduled transfer option|
|Payment methods||7 total payment methods available||23 total payment methods available||---||16 total payment methods available||---|
|Security compliance||It provides PCI DSS certificate, fraud, and chargeback prevention||It provides PCI DSS certificate, fraud, and chargeback prevention||It provides PCI DSS certificate, fraud, and chargeback prevention||It provides PCI DSS certificate, fraud, and chargeback prevention||It provides PCI DSS certificate, fraud, and chargeback prevention|
|Additional fees||There are no additional fees charged||There are no additional fees charged||There are no additional fees charged||There are no additional fees charged||There are no additional fees charged|
|Plugins||There are more than 25+ plugins available||There are more than 25+ plugins available||---||There are more than 15+ plugins available||---|
|Hosted or Integrated||Integrated||Integrated||---||It is both, hosted as well as integrated||Hosted|
|Pre-transaction fees||For sales within the US, PayPal charges a fee of 2.9% + $0.30 per transaction, and for international sales, it charges 4.4%of transaction fee + a fixed fee depending on the currency||For sales within the US, PayPal charges a fee of 2.9% + $0.30 per transaction, and for international sales, it charges 1% +2.9% of transaction fee + a fixed fee depending on the currency||Due to the nature of ACH payments, the fees are lower than 2.9% + $0.30 for credit cards. You can find more detailed information about the pricing plans at dwolla.com||Charges the Merchant : Braintree charges 2.9% + $0.30 per transaction in credit card processing. And it also charges a 1% fee for transactions over international credit cards.||Depending on the type of payment, Square charges the payment fees. For contactless payments, it charges a transaction fee of 2.75% with chip and pins at 3.5%+ $0.15|
|Microtransaction fees||It charges a fee of 5.0% of the transaction amount + fixed fee based on the country. For outside US transactions, it charges 6.5% of the transaction amount along with the fixed fee depending on the country||---||---||---||---|
|Mobile payments||Yes, it is supported||Yes, it is supported||Yes, it is supported||Yes, it is supported||Yes, it is supported|
|Number of currencies||It supports 25 currencies||It supports 100+ currencies||It supports more than 134 currencies||It supports 130+ currencies||It supports only 4 currencies|
|Countries supported||PayPal supports 203 countries||Stripe supports in only 25 countries||Dwolla supports 162 countries||Braintree supports in only 46 countries||Square supports only the US, Canada, Japan, Australia, and the United Kingdom|
|Options for high risk||There are no options for high risk||There are no options for high risk||There are no options for high risk||There are no options for high risk||There are no options for high risk|
|Recurring billing||It charges a monthly amount of $10 as a fee||It charges an amount of $39.95 as a fee for a free or paid plugin||It doesn’t charge any recurring monthly bills||It charges a monthly amount between $15 to $65 as a fee||It doesn’t charge any recurring monthly bills|
|Supported platforms||BigCommerce, Magento, Spree Commerce, Shopify, WooCommerce||BigCommerce, Magento, Spree Commerce, Shopify, WooCommerce||Shopify, Magento, BigCommerce||BigCommerce, Magento, Spree Commerce, Shopify, WooCommerce||WooCommerce, Magento, BigCommerce, Opencart, QuickBooks, Vend, TouchBistro|
So, which payment gateway is the winner in the game?
As mentioned above, each payment method has its weaknesses and strengths. Depending on the purpose of the use of the payment gateway, the winner amongst the payment gateway differs accordingly.
However, you need to focus on one major thing: the gateway should allow you to move the money transparently and securely. If you are still confused about which payment gateway you should integrate for your application, you can ask our experts from a mobile app development company. We have integrated gateways that work great with the target country of application.
To sum it up, Stripe is a preferred option for startups, but not great for companies making offline sales. Paypal is a go-to option for any business type. Square is advisable to small businesses that have online and offline components. Braintree on the other hand is best suitable for enterprise-level companies.
Hence based on your business needs, you need to choose the best-fit payment gateway. Do not force yourself to choose a particular payment gateway, do your research, know the pros and cons, research the countries, get suggestions from experts and then decide for one.
We hope this article will help you in finalizing one for your application idea. Make your payment gateway count worth the application idea.