We use a variety of technologies to create solutions for our clients’ online business needs. We passionately believe that customizing Open Source content management systems creates the most reliable solution that can grow and change as your business grows and changes. Open Source e-Commerce systems, such as PrestaShop, as well as Open Source CMS that integrate software from third parties, such as WordPress with Booking Bug, often ship with support for a variety of ‘payment gateways’. Payment gateways are those systems, such as PayPal or Google Checkout, that allow you to take payments online. Each payment gateway has a different pricing structure and our clients often have trouble choosing the best payment gateway for their business. Here’s a simple guide to three popular payment gateways to help you choose the right provider for your business.
Payment Gateway Pricing Structures
All payment gateways apply a charge per transaction, this can be applied as a percentage of the cost to your customer, a flat fee per transaction or a combination of these two approaches. Some payment gateways also vary their fees depending on the your business’s monthly sales.
PayPal
| Monthly Sales | Fee per Transaction |
| under $3000 | 2.9% + $0.30 |
| $3000 – $10,000* | 2.5% + $0.30 |
| over $10,000* | 2.2% + $0.30 |
*When your monthly sales exceed $3,000 and you’ve been a PayPal member more than 30 days, you’ll need to fill out a one-time application, subject to approval by PayPal. The pricing table above applies to domestic payments in US dollars. There’s an additional 2.5% charge for any currency conversion and a 1% charge to receive payments from another country.
Google Checkout
| Monthly Sales | Fee per Transaction |
| under £1500 | 3.4% + £0.20 |
| £1500 – £5999.99 | 2.9% + £0.20 |
| £6000 – £14999.99 | 2.4% + £0.20 |
| £15000 – £54999.99 | 1.9% + £0.20 |
| £55000 or more | 1.4% + £0.20 |
SagePay Merchant Accounts
| Transaction Type | Fee per Transaction |
| Credit Card | 2.5% |
| Debit Cards | 40p |
| Commercial Card | 2.5% |
Sage Pay also charges an annual fee of £120 for PCI compliance through Trustwave’s Trustkeeper portal (this service is mandatory with your SagePay merchant account). If you are already PCI compliant you will be charged a £20 administration fee to register your certificate. If you are not PCI compliant within 3 months of setting up your merchant account you will incur an addition fee of £17 per month. You can add PCI Compliance to your SagePay package which starts at £72/year for businesses processing less that 20,000 transactions per annum using outsourced payment processing or £175/year for hosted payment processing. So, no matter how you slice it, there there is an annual PCI-compliance fee but with compliance a small business can reduce the annual fee from £120 to £72 as well as avoid monthly charges after the first three months with SagePay.
Why Use a ‘Big Name’ Payment Gateway
So, why the heck would you use on of these payment gateways considering all the charges associated with their services? A couple reasons:
- Customer confidence Using a recognised payment gateway reassures your customers that they can trust the integrity of your payment processing systems. When your customers trust you, they’re much more likely to buy from you.
- Maintain and extend your online business Your site benefits in a number of important ways by using a payment gateway rather than relying on an custom-built payment processing system. A solution custom-built for your site can never have the strength and reliability of software with many minds involved in its creation over a long period of time. Neither will your custom-built solution keep pace with changes in Internet technologies. By using a recognized provider you can be more confident about the robustness of the software underpinning how you collect your payments.
Not all technologies ship with support for all of the payment gateways listed here, but usually at least one of these providers will be supported. Where you have the choice we hope this guide helps you make an informed decision. There’s so much more to learn about managing your online business so sign up to Sproutee’s free RSS Feed to keep up to date!