A payment gateway is an application that authorises and takes payment for websites. There are two main options when setting up a payment gateway for your site.
Option One Merchant Account With A Bank
This is not to be confused with a bank account. A merchant account is a separate account with a credit clearing bank. These accounts while cheaper on per-transaction fees do carry a monthly fee and can be expensive to set up. For more information, there is a great article on merchant accounts here on the UK business forums.
Option Two, A Third-Party Payment Processor.
This is the option we recommend for most of our clients. Companies like PayPal or Stripe will accept payments for you and charge a small commission per payment accepted. For example, PayPal will charge you 2.9% of the transaction total plus 30p per transaction. This can go right down to 1.9% and 20p for larger turnovers.
These third-party payment processors are the easiest way to integrate payments with WordPress or most major shopping carts. With PayPal, your clients can pay with a debit or credit card if they do not have a PayPal account. They also offer a very inexpensive card reader if you want to take payments on the move.
There are many third-party payment processors on this page, we just cover the ones we recommend.
Other Options
As well as companies that take payments instantly, you can also ask clients to set up standing orders for recurring fees or send bacs payments for one-off purchases. The challenge with that is it is more work for the customer and can result in an abandoned transaction.
Direct Debit
If you take monthly payments from your clients, or you offer some kind of service contract where you may want to bill them different amounts for the work you do, then you should consider Direct Debit. There is an excellent company called Go Cardless that offers this service. It is free to set up and costs only 1% of the total transaction + 20p as a fee, so it is much cheaper than other options.
Go Cardless is used by HM Government, Trip Advisor, The Guardian and some other very big names so you know this is a trustworthy company.
