What is a Payment Gateway?
A Payment Gateway is simply an e-commerce service that processes, verifies, and accepts (or declines) direct payments or credit card processing on behalf of merchants using secure internet connections.
It fulfills the important roles in e-commerce transaction processes between a merchant and a customer. It is used to help facilitate online transactions and get approved by the issuer bank.
A payment gateway is important in e-commerce as it helps to transfer information regarding a transaction between the payment portal and the front-end processor or bank.
It uses special encryption and verification technology since online shopping involves distance and anonymity. It is to ensure that legitimate transactions are securely transmitted to the processor.
Why Are Payment Gateways Important?
The right payment gateway is the key to a superior checkout experience.
E-commerce payment gateways enable merchants to safely transfer financial transactions and improve the checkout experience, making payments seamless for you and your customers.
A good Payment Gateway is one managing the cash flow in and out of your business. It is responsible for not just managing online payments but also offering the best user experience to your e-commerce customers.
A few of the top factors for heightened shopping cart abandonment rate are directly associated with the UX that users get from the payment gateways.
- 28% of customers abandon a shopping cart for a complicated checkout process
- 19% of customers do not trust the site with their credit/debit card information
- 8% of customers cannot find their preferred payment option on the site
- 4% of credit cards get declined due to technical errors
With all this in mind, maybe you’re wondering: how do you select a payment gateway that will maximize convenience, minimize risk, and ensure the security of your customer’s information?
Let’s check how to select the right payment gateway for your business.
You should ask yourself these 5 QUESTIONS before setting up a payment gateway.
- What will be the Payment gateway cost (Setup fee, TDR, Annual free, etc)?
- How much time will it take to set up everything?
- Is the User Interface of the gateway efficient?
- What are the payment options (Credit/Debit Cards, net banking, Mobile Wallets, UPI, etc)?
- How is the Aftersale Support?
With the plethora of options for payment gateways that are available, it can be difficult for you to choose one that is the most appropriate for your store.
Let’s make it easier for you.
We will list the top 5 payment gateways in Africa that offer easy, quick, seamless, and secure transactions. So, that it will be easy for you to decide which one to pick for your e-commerce platform.
Therefore, make an appropriate choice for your online store that relies on quality standards and policies, and secures the available sensitive data.
1. VoguePay – #1 Payment Gateway In Africa
A Nigeria-based payment gateway, VoguePay’s global coverage allows consumers and businesses to safely make and receive payments in all major currencies, regardless of location.
You get a bird’s eye look at your sales, revenue, and cash flow with detailed reports. They also send a weekly performance report to keep you updated.
VoguePay distinguishes its offerings with several helpful features:
- VoguePay wallet: Upon registering, you’ll receive access to a VoguePay wallet a virtual holding account for transaction funds.
- Analytics: Monitor your sales, revenue, and cash flow with weekly performance reports.
- Free website extensions: Integrate VoguePay with over 30 plug-ins, supporting the likes of WordPress, WooCommerce, Drupal, Joomla, and more.
- Developer commission: Developers earn a 30% commission on any VoguePay plug-in or extension they develop that isn’t available in VoguePay’s existing library.
Pricing: International merchants located outside Nigeria can expect the following fees:
- Merchant verification: Getting set up on VoguePay starts with a $19.99 merchant verification fee.
- Transaction fee: Card processing fees start at 3.8% + $0.50.
- VoguePay wallet payment: You can use the funds in your VoguePay account to make payments but a 1% fee applies to every transfer.
2. PayPal
Founded in 1999, both MasterCard and credit card payments can acknowledge it, and is free for buyers, while merchants need to pay transition fees while using PayPal for Visa payments. This e-commerce payment gateway does not require any setup expenses, gateway fees, or monthly charges.
The advantage is that merchants do not have to pay once the sale is done. While using PayPal Standard, customers may leave the site to check out and sign in to their PayPal account or they can pay via credit card or Visa without signing up. PayPal Pro enables merchants to have and modify their entire checkout process so that consumers do not have to leave the site. It also accepts credit cards via fax, mail, or phone.
PayPal Processing Fees: 2.9% per transaction, with no monthly fees
Top Brands Using PayPal Payment Gateway: Adidas, Disney, ASOS, and Etsy
3. Skrill
Skrill is a UK-based e-commerce payment gateway designed for both businesses as well as consumers. With the help of Skrill, you can make international transactions, and pay for products and services wherever you are with the help of a dedicated mobile app. Active users can submit a request for a prepaid Master card, and use it to pull back assets/buy products wherever they might be.
Skrill is simple to connect to any bank account globally and takes good care of the security of your payment data. There are no charges for creating an account on Skrill, but there is a fixed percentage of charges for what they are sending or receiving.
Features of Skrill Payment Gateway:
- Supports in-app payments
- Integrates with third-party shopping carts
- Hosted payment page
Skrill Processing Fees: 1.9% transaction fee.
Top brands using its payment gateway: Skrill’s payment gateway is being integrated by several global online brands, such as Facebook, Skype, and eBay.
4. PayStack
Paystack, a widely popular payment gateway for African businesses, facilitates the acceptance of secure online payments. The payment gateway allows businesses registered in Africa to accept payments from global customers.
The payment gateway is trusted by over 30,000 businesses. Paystack automatically routes payments through the most optimal channels, ensuring the highest transaction success rates in the market.
It allows merchants to accept debit and credit card payments online from their customers. It is an easy and reliable way to accept payments across multiple channels, use payment pages to run online campaigns for your products and services without writing code, with an option to run your subscription business with ease.
As a Paystack merchant, you can pay money directly from your Paystack dashboard to any bank account in Africa.
Paystack transaction fees: 1.5% of the transaction value for transactions within Africa and 3.9% for International transactions.
Top brands using its payment gateway: PayStack’s payment gateway is being used by brands like Domino’s, MTN, and Taxify in Africa
5. Flutterwave
Flutterwave makes it easier for banks and businesses to process payments across Africa. The service allows consumers to pay for things in their local currency; Flutterwave takes care of integrating banks and payment service providers into its platform so businesses don’t have to take on the expense and burden.
Rave is a product of Flutterwave that allows website owners to accept debit/credit payments from customers in 154+ countries. Visa, MasterCard, and Verve are supported. Your customers in the United States of America, South Africa, and Nigeria can pay you directly from their bank accounts.
Flutterwave Transaction fees: For Local Payments: Payment method: MasterCard, Visa, Bank Account, USSD- 1.4% Processing fee
For International Payments: MasterCard, Visa, American Express-3.5% Processing fee
Top brands using its payment gateway: Flutterwave’s payment gateway is being used by brands like Uber, Fruits2go, and hotels.ng, Barter, and Jumia in Africa
Final Words
A payment gateway is, undoubtedly, an essential part of any e-commerce business.
However, finding the right one is a problem.
So, test with different payment gateways and choose the one that works the best.
If you are just starting, go with popular e-commerce payment gateways such as PayPal or Skrill to decrease the risk of losing relevant customers to your e-commerce stores.
Payment Gateway + Billing Solution
What if the payment gateway is already integrated with your billing or invoicing software and you never have to worry about any setup hassles? This is what ProfitBooks billing software offers.
Just upload a few documents from the application and you are all set.
When you send invoices to your customers, they’ll see an option to pay using credit/debit cards, net banking, and wallets.
The transaction fee is super low Only 1.9% of transaction value!
Know more about ProfitBooks and test drive it for free.
Also read:
How to sell online in India
10 Ways to Fund Your Small Business
Learn about the new payment method UPI
Ho to create professional invoices
