This article will outline free payment gateway options and what to look out for when in the market for a cheap payment gateway provider.
Keeping Online Payment Costs to a Minimum
If you own or operate an online business, you will need to think about how you plan to process debit and credit card payments. Traditionally, you would commission a payment gateway, payment processor and merchant account, occasionally as one service but more often as separate services.
Thankfully, the growth of e-commerce has made payment processing simpler than ever before, but there are still costs (such as merchant account fees) associated with taking payments from your customers. It is natural to want to cut those costs as much as possible and many business owners look for free payment gateways to ease the burden.
What Is a Payment Gateway?Payment Gateways are the link between your merchant account and your customer's bank account. They are a virtual POS (Point of Sale) system that encrypts customer information as it is sent online, so that the details cannot be harvested for fraudulent purposes.
In essence, payment gateways scramble and then unscramble data so that payments can be taken from your customer's account and deposited into yours safely, via your payment processor.
Where Can I Find a Free Payment Gateway?
There are no genuinely free payment gateway services available because all card transactions attract a charge. Companies offering these services for free must be covering that charge elsewhere, otherwise they would be less of a business than a charity.
Some US-based companies do offer 'free' payment gateway options and some do offer those services to UK businesses, but in the UK, there are no options for a free payment gateway at present.
There are providers that offer different payment structures to make it appear that services are free. Most of these free payment gateways offer free sign up and no annual or monthly fees, but they do charge a transaction fee and for some free providers, this can be quite high compared to subscription based providers.
Other 'free' payment gateways are only free if you pay for other services, such as a merchant account, where the cost of your payment gateway is covered in the charge for other services (even if the provider claims to the contrary).
Should I Pay For A Payment Gateway?
If you process a very low volume of sales, these 'free' providers, like PayPal, probably work out better value for money, even if their transaction fees seem high. That is because you would have to process a set number of transactions to break even on a pay monthly service.
Ordinary businesses with an average or high level of transactions should consider using a standard, conventional service because it can often work out cheaper and safer than 'free' options. Providers like PayPal do offer this kind of service, but you have operators such as Worldpay, Sage Pay and Nochex that specialise in offering these services to businesses and are often competitive.
Avoid any service that offers completely free payment gateway software or services - they are likely to cost you more in the long run and be potentially unsafe for your customers. Complete trust is paramount in online payment processing and reputable providers offer a wealth of experience and procedures to ensure that neither your business nor your customers suffer financial loss.
If you are interested in hearing more about a Payment Gateway for your business, then fill out the form at the top of this page.