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    Last Updated | September 10, 2021

    eCommerce stores are increasing in the count, but not all eCommerce businesses are able to make it successfully. The success of eCommerce stores is determined by the customer satisfaction level. When we talk about a seamless shopping experience for customers, two crucial aspects include; a smooth payment process and a streamlined checkout process. Some studies have even indicated the influence of payment gateways on the store’s overall conversion rate (isn’t that something intriguing?). But again, finding a suitable payment gateway for Magento 2 stores can be challenging.

    Well, here in this blog, we will be reviewing everything you need to know about Magento 2 Payment Gateway so you are able to maximize your revenues by offering a seamless user experience for your store. So, let’s get to business!

    What are Magento Payment Gateways?

    Magento payment gateway is designed as a merchant service that allows credit card payments within the current software of the online store. It is used to process transactions from the online store or eCommerce business to the payment processor (the payment processors will receive the money from customers). Banks generally provide payment gateways to the customers, but Magento web development services also offer these financial solutions as a separate entity.

    The customers will be able to submit the credit card data along with the security validation. In addition, customers’ financial information is transferred between the bank and the merchant’s payment system. It is basically a third-party service that can approve the store’s payments and creates a bridge between the bank and Magento 2 store. It wouldn’t be wrong to say that it’s a point-of-sale terminal that accepts the credit card data, validate it, and encrypt everything.

    That being said, the sensitive financial data is transmitted from the customer to the merchant, which is later shared with the bank. As far as Magento payment gateway is concerned, it uses Authorize.net, PayPal, and Braintree. However, other payment gateways can be used by the store owners through Magneto integration services (we will share the options below)!

    How Do Magento Payment Gateways work?

    It’s an established fact that payment gateways are responsible for preserving the customer’s security and privacy and reducing stores’ financial hassles. In the section below, we are sharing how Magento payment gateways work, such as;

    • The customers can select the products they want to buy and place an order by adding the credit card information (yes, on the checkout page). The transaction will be encrypted, and details are forwarded to the primary payment gateway
    • When the payment gateway receives the customer’s order, it will authenticate everything with the store and allocate a digital certificate. The customers will have access to the screen, so they can choose the most suitable payment method while the payment gateway will transmit everything to the merchant account or bank (the bank gets the details if Magento payment gateways are selected)
    • After this, the transactions are either declined or accepted (the approval or dismissal depends on the funds available on the customer’s bank account). This is because the available funds are authenticated by the credit card company or a bank
    • In case of approval, the bank will send the money to the merchant account with the help of a payment gateway. In addition, the payment gateway will pass on the processed payments to the owner’s account. Generally, this will take a few days or minutes, depending on which payment gateway you use.

    Truth be told, this process might seem complicated, but everything is done within two to three seconds. The Magento store owners need to select the right payment gateway to ensure they receive the payments within a few minutes or seconds.

    How to Evaluate A Payment Gateway?

    When it comes down to the payment gateway, choosing the right option is essential for eCommerce businesses since it plays a critical role in ensuring the success of the Magento stores by streamlining the checkout process. In essence, the payment gateway should be able to fulfill the basic business requirements, such as costs, convenience, and security. That being said, if you want to evaluate the payment gateway and its functionality, the following factors should be considered;

    •  Security –it is essential because it determines how well the customer’s data and transactions will be protected from security breaches. This is because payment frauds are increasing, and payment gateways need to be secure enough
    •  Ease –the payment gateway must be easy to use for customers. In addition, it must have high-end functionality, and integration should be convenient as well
    •  Costs –you need to consider which fees will be charged during the payment processing. Some payment gateways come with fixed monthly charges, so consider that
    • Alignment –the payment gateway should be in alignment and compliance with your business goals. When choosing a payment gateway for the Magento store, make sure it supports the commerce and open-source model
    • Capability –the payment gateway must offer various card processing options to the customers. For instance, it must accept debit cards, mobile payments, and credit cards
    • Size –the payment gateway should be selected according to your business scale. It’s better if you have the option to adjust the settings as your business grows

    Payment Gateways, Payment Processor And Merchant Account Analysis

    • Payment Gateways 

    The payment gateway is designed as a third-party service that approves the online payments within the eCommerce platform and creates a bridge for transaction processing. The payment gateways are provided and supported by third parties and can accept the customers’ credit card information. In addition, it encrypts the data after validation while financial data is transferred from customers to merchants and banks.

    • Payment Processors

    The payment processor is defined as a link that connects the customers’ bank and the online store’s bank. It is responsible for processing the queries from payment gateways and execute the transaction information after proper validation. It will also take funds from the customers and send them to the store owner’s account. After this, it will send the transaction success alert to the payment gateway. To illustrate, it’s a financial institution that works to provide payment processing systems to online stores. In addition, it plays an essential role in ensuring information security.

    • Merchant Account 

    The merchant account is defined as a bank account where money is deposited once the transaction is successful. This account enables the brand to accept debit card and credit card payments once the payment processor submits them.

    Top 10 Magento 2 Payment Gateways of 2020

    • Braintree

    Braintree was launched in 2007 in Chicago and is one of Magento stores’ most popular payment gateways. It is suitable for every business, irrespective of its size, and supports more than 130 currencies. In addition, it is available in over 45 countries. The best thing about Braintree is that there are fraud elimination tools available. As far as the transaction fee is concerned, it’s the same as PayPal.

    • PayPal

    PayPal is one of the best payment gateways available for Magento 2 stores. It actually has more than 392 million users as well as merchant accounts. According to stats, they manage at least 32 transactions within one minute. They are supporting twenty-five currencies and are available in over 200 countries. The users have the option to use a PayPal account to make a purchase. In addition, there are no shipping refunds, monthly fees, or set up a feed with PayPal.

    However, if you use this payment gateway, the customers will be asked to leave the Magento 2 store to complete the transaction (it’s inconvenient, but that’s the only way). In addition, there is a pro version available for businesses that support 26 currencies. It can support in-person payment, credit card payments, and phone-based credit card payments. PayPal works pretty fine with online invoicing, but the pro version has a fixed monthly fee along with a transaction fee.

    • Amazon Pay

    Amazon Pay has been working since 2007 and is popular for offering a seamless and secured checkout system. It has multi-lingual support and is working with all leading currencies. Amazon Pay has designed two different business services, such as Checkout by Amazon and Amazon Simple Pay, helping online merchants to accept on-site and online transactions. There is a transaction fee with Amazon Pay, but it’s different for international and domestic transactions.

    • Stripe

    Stripe was first launched back in 2011 and was established in Australia. It is supporting more than one hundred currencies and is available in over 100 countries. Stripe is known for customization and scalability, which makes it suitable for online store owners. In addition, it has a top-notch user experience, and customers won’t have to leave the store to complete the transaction. Moreover, it has a one-click checkout feature and supports mobile payments. There is no monthly fee, but there is a transaction fee.

    • Square

    If you are looking for a payment gateway for a small online store on Magento 2, you can opt for Square. It can support in-person transactions and credit card transactions. There are no monthly subscription charges with Square, but there is a standard processing rate for transactions. In addition, it can work with Shopify stores as well, which means Magento to Shopify migration won’t be any inconvenience.

    • 2Checkout

    2Checkout has more than fifty thousand merchants and works with 87 currencies. It can support fifteen languages and can be connected with all eCommerce stores, irrespective of which platform you are using (yes, you can opt for Magento Shopify migration without worrying about changing the payment gateway). In addition, it can accept over eight payment methods, such as PayPal, debit cards, and credit cards. On top of everything, it’s designed keeping in mind 300 different rules which promise utmost security for every transaction. However, there is no fixed transaction because it depends on where the store is being handled from.

    • WorldPay

    WorldPay is available to over four lac merchants, and their services are available in over forty countries. This payment gateway is suitable for businesses of every type and size. As far as currency support is concerned, it supports over 120 currencies, and the checkout process will be incredibly smooth. There is on-site payment processing available, and a management tool will help manage the reports, data, and other insights. In addition, there is a vault available for saving the order information and save cards.

    • SagePay

    SagePay is available for everyone and is being used by over forty thousand online stores. This Magento 2 payment gateway is known for fraud reduction and high-end security features. In addition, it will optimize the security of customer’s card information. What we like about SagePay is that there are various payment processes and interfaces to meet the unique demands of businesses. Last but not least, there are two packages available, such as corporate package and business package for huge enterprises and medium and small business, respectively.

    • CartaSi

    CartaSi has more than seventeen million customers and has become a famous payment gateway for Magento 2 stores. The online store owners can set up the payment methods on the back-end system, but the total order count will decide the ultimate payment method. Currently, there are two packages available, and both of them have special features available. There are transaction charges on every transaction, but you don’t need to pay any setup costs.

    • Authorize.net

    It has been operational since 1996 and is offering services to more than 430,000 store owners, which makes it a suitable payment gateway for Magento stores. It is available in over 33 countries and is more suitable for medium-scale and small-scale online stores. The user interface is highly convenient, and it can support debit cards and credit cards. What’s best about Authorize.net is that it works with Apple Pay, Google Pay, and eChecks. There are monthly charges and transaction fees, but there is no setup fee.

    Which Payment Gateways Is Best For Dropshipping?

    Dropshipping is no piece of cake, and it actually has all the business investments. For this reason, using the right payment gateway is important because it directly influences the quality of transactions and checkout. Some of the best payment gateways for dropshipping include PayPal, Stripe, 2Checkout, and Authorize.net.

    Final Words

    Choosing a suitable payment gateway for Magento 2 store reaffirms the positive customer experience of the store. That’s because the right payment gateway will deliver an exceptional customer journey on your Magento store while meeting the modern needs of the eCommerce arena. So, which payment gateway will you choose for your Magento 2 store? Also, if you are unable to integrate the payment gateways with your Magento 2 store, you can get help from Folio3 as they can offer seamless Magento B2B extension development for efficient payment systems!

    FAQs:

    What payment gateways does Magento use?

    Magento uses three payment gateways such as Authorize.net, PayPal, and Braintree.

    How does Magento 2 integrate payment methods?

    • Configure the general payment method and configure the payment methods
    • Implement the payment method and configure it
    • Now, implement the payment options and configure them

    Is Magento a payment gateway?

    No, Magento is an eCommerce platform and uses different payment gateways. So, it’s not a payment gateway, but it can be integrated with a different payment gateway to handle the transactions.

    Can I use multiple payment gateways?

    Yes, multiple payment gateways can be used, and it’s actually a good idea. This is because the availability of multiple payment gateways will ensure the handling of high-volume transactions without any downtime..


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    About

    Folio3, a Software Powerhouse established in 2005, is one of the leading eCommerce solution providers for SMBs and Fortune 500. The Company has expertise in diverse industries such as Animal Care, Retail, Automotive, Food and Agriculture, and Health care. From ecommerce store design and development to full-scale ERP deployment and integration, Folio3 has done it all.