Payment gateways: What they are, what they’re not, and what they cost.
What is a payment gateway?The simplest way to think of a payment gateway is the secure technology that provides a bridge between your business and your customer.
As long as you accept (or want to accept) credit card payments online or on a mobile device, you’ll need a payment gateway. Without it, you won't be able to verify a customer's credit card information, process payments, or finalize the sale.
Do you need a payment gateway?
If your business is brick-and-mortar only, you might not need a payment gateway. Your point-of-sale terminal will authorize the credit card payment using the chip reader. But if you plan to offer a hybrid of online and offline sales, it can make sense to incorporate a payment gateway into both your e-commerce and real-world checkout process.
What's the difference between a payment gateway and a payment processor?
You'll often hear the terms 'payment gateway' and 'payment processor' used interchangeably, but they're different.
- A payment processor passes along the customer's credit card information to the issuing bank. Once the transaction is approved, it connects the issuing bank with your merchant account to transfer the funds. While a payment processor is a requirement to process the transaction, a payment processor alone doesn't help securely authorize the transaction.
- Like a payment processor, a payment gateway also passes along the customer's credit card information and connects accounts together. But it also securely authorizes the transaction, ensuring you'll get paid. You need both for online sales, but using a payment gateway that’s different from your payment processor can give you flexibility to go with your preferred bank. And if you ever want to change your bank, you can do so without changing your integration or backend processes.
What to look for in a payment gateway.
Not all payment gateways are created equal. If you want to accept online payments, it's worth taking the time to research your options and find one that best fits the unique needs of your business. Here's what to look for:
What are average payment gateway fees?
Average payment gateway fees can vary widely, depending on the provider and your requirements. Expect a monthly fee ranging from $0–$25 and gateway fees of about $.10 per credit card payment.
Also be aware that payment gateways sometimes have hidden fees that can drive up costs.
The easiest way to get started is to go with an all-in-one solution.If you're starting from scratch, you can get the gateway and processor in one package. This convenience saves you the hassle of implementing and managing two different providers and by reducing complexity, you also make it easier to help ensure all your security needs are being met and that the customer experience is seamless. The PayPal Commerce Platform gives you a payment gateway and payment processor all in one, making it simple to start selling. There are no set-up or monthly fees for PayPal Commerce Platform.
Payflow: The PayPal payment gateway.If you already have a payment processor, you can add Payflow, which is PayPal's payment gateway. Payflow gives you two gateway options depending on the level of customization you need on your checkout page:
- Payflow Link: With Payflow Link, your customers enter their payment details at checkout on a secure, PCI-DSS compliant template hosted by PayPal. You can choose to integrate an embedded template that sits right on your website, or you can use a customizable full-page template. All templates include PayPal and PayPal Credit1, so customers have more options to pay. Payflow Link is available without set-up or monthly fees.
- Payflow Pro: This option is fully customizable, letting you build a unique checkout experience that helps meet the exact needs of your business and your customers. From language and layout to page sequence and PCI-DSS compliance options, you can control everything. Payflow Pro is $25 per month, with no setup fees.
- Security: Help simplify the work and cost of PCI and other regulatory requirements, with basic fraud detection for no additional cost.
- Customer experience: Easily accept all major credit and debit cards along with PayPal so your customers can pay the way they want. You can also accept L2/L3 purchase cards, prepaid cards, foreign currencies, TeleCheck, and ACH, along with offering customers the ability to pay through PayPal Credit1 at no additional cost.
- Implementation: PayPal' s payment gateway is pre-integrated with all major shopping carts and works with almost every payment processor, so you don't have to worry about any difficulty incorporating it into your operations.
- International capabilities: Accept payments in 25 currencies from 203 markets around the globe.
- Optional features: For an additional fee, PayPal's payment gateway can help you process recurring payments automatically. You can also add additional protection and security tools, along with buyer authentication, through the Verified By Visa and MasterCard SecureCode programs.
1 PayPal Credit is subject to consumer credit approval.
Frequently asked questions.
Payflow Link is cost-efficient, PCI-compliant, and works with your existing merchant account. At checkout, your customers enter their payment details on a secure, PCI-compliant template hosted by PayPal. You can choose to integrate our embedded template (which sits right in your website), or you can choose a customizable full-page template. All templates include PayPal and PayPal Credit, so your customers have more options to pay. Payflow Link has no setup or monthly fees.
Payflow Pro is a fully customizable gateway, so you can build a checkout experience as unique as your business—from language and layout to page sequence and PCI compliance options. You can add a PayPal button to help drive more sales, or use our hosted pages and offer PayPal Credit, too. Payflow Pro has a $99 setup fee and a monthly fee of $25.
There are optional features such as additional fraud protection, recurring billing and buyer authentication. Click here to see pricing.
If you have a Premier or Business account, Payment Receiving Preferences can handle payments automatically. You can convert any payment into your primary currency or block certain types of payments.
- Block payments from U.S. customers who don't have a confirmed address.  >
- Block payments sent to you in a currency you don't hold.  >
- Block payments for duplicate invoice IDs.  >
- Block payments from customers who have non-U.S. PayPal accounts.
To set your Payment Receiving Preferences:
- Click Settings.  >
- Click Payment preferences under "Account & Security" on the left of the page.  >
- Click Update in the "Block payments" section.  >
- Update your settings and click Save.
- To make payments online, log into your PayPal account, then select PayPal Credit. You'll then be transferred to the Synchrony Bank servicing site where you can make one-time payments, or have the option to set up recurring payments.  >
- To make payments by phone, call Synchrony Bank at 844-373-4961, Mon-Fri 8am-11pm ET, and Sat-Sun 9am-9pm ET.  >
- To make payments by mail, use the payment address provided on your billing statement.
Where a payment involves a currency conversion, we apply the conversion rate at the time of payment. Similarly, if a payment is refunded, we apply the conversion rate at the time of the refund.
The conversion rate at the time of the refund may be different from the conversion rate on the original payment. For this reason, the refunded amount may not be the same as the original payment amount.