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A one-time decision that can make (or cost) your e-commerce app big bucks!

November 9, 2016

If you have an e-commerce mobile app that accepts online payments (e.g. online banking or electronic transactions using debit or credit cards), the last thing you want is for the customer’s app journey to end just before a transaction occurs. According to a recent study, 50% of users are likely to cancel their purchase if their preferred payment option isn’t available. In order to increase your conversion rate, you need a payment gateway that will not cost you a sale.


Before you choose that gateway, there are a few things to consider. Start by asking yourself a few questions. Who are your customers and how are they using the app (or how do you anticipate them using the app upon release)? What kind of experience are your customers having now? Are many customer shopping carts filled with items in them that never get purchased? That might mean that your user experience is… shall we say… lacking? If the checkout experience within your app isn’t easy and convenient, people are going to give up and go somewhere else. We don’t live in a vacuum and they have other options, after all.

You need a payment gateway that can handle your current traffic and scale with you as you grow. If the system you’re using works for you today, great! But will it work for you tomorrow? How do you plan on expanding your business? What tools and which markets do you want to move into?

Make sure you keep in mind things like fees and charges per transaction for each tool. How long does it take to get your money? The best option depends on the circumstances of your company. It’s great to have a thousand dollars in sales pending for the next few weeks, unless you need the money today to pay the bills.

And don’t forget security. People aren’t going to buy from you if they can’t trust you. You must be able to protect their payment information. No ifs, ands, or buts. It’s not an option. Whatever solution you choose, it must instill trust in your customers. In reality, everything can be hacked. You need to know that the gateway you use is as safe as possible.

Let’s take a few minutes to look at some of the most popular options for payment gateways, and what to consider when determining the best fit for you.

  • PayPal

Everyone knows about PayPal at this point. In 2011, PayPal was the leader in the payment gateway field, processing more than $3 million in payments a day. As a leader, they have experience and history on their side. They offer many great features, they allow for customization, and they can even process payments in 26 currencies. PayPal also has an assortment of tools to help you track your sales and inventory. It supports simple invoicing as well as payments — a great option depending on your business needs.

With a merchant account, PayPal will charge 2.9% plus 30 cents per transaction (they offer volume discounts starting at $3,000). PayPal is also one of the only companies that supports recurring monthly payments, a huge benefit if your business offers subscriptions or standing orders for products. And many companies use PayPal as a backup gateway, offering it as an option for customers who don’t want to give over credit card information to every vendor they purchase from. Payments are usually available in one business day.

  • Stripe

Stripe takes a slightly different approach: they listen to developers first. What does that mean for you? It means that Stripe is on the frontline of innovation and payment solutions. If you’re looking for a gateway that is proactive and forward thinking, Stripe may be ideal for your needs. Like PayPal, it charges 2.9% plus 30 cents per transaction, but doesn’t offer volume discounts.

Stripe also has a subscription option that allows for recurring payments. Your payments are available after two days. A big plus with Stripe is that the customer’s information is never stored on your server. It all goes directly to Stripe, which leaves information security up to them.


Another senior member of the payment gateway community is which has been around since 1996. That history has its advantages;  just like PayPal, they’ve worked out the kinks in their daily operations and this experience has earned them their reputation as one of the industry’s best. They’re also considered one of the most reliable payment gateway options available today. has a base fee of 2.9% plus 30 cents for most transactions. They charge a $49 setup fee, and other fees may be applicable if you go through a reseller, making it one of the more expensive options. One big downside to is how difficult it is to transfer data if you decide to migrate to another gateway system, which means you’ll have to collect information from your customers all over again.

  • Dwolla

This U.S.-only payment gateway solution is another great option. With Dwolla, initially there was a 25 cent per transaction fee for products over $10, but even that has been waived off to gain ground in the market. This makes it a great option for businesses that sell low-cost products. It also offers a wide range of payment options, like the option to pay thousands of people at once (like a company’s payroll), or to send out up to 2,000 of invoices at the same time. Dwolla works on iOS, Android, or Windows, and uses an oAuth and RESTful API (which means it will probably work for the platform you’re using.)

Dwolla released a new white label API that provides the convenience of credit cards without their high costs by connecting directly to bank accounts. It charges for the API service though.

  • Worldpay

Another tried-and true-payment gateway is Worldpay, which started back in 1994. They have the experience and numbers to back up their longevity; they even have more than 150,000 clients in the U.S. alone. But many people feel that their size has led to problems with customer service.

Users can expect to sign a three-year contract. They offer lower processing rates, but there are cancellation fees if you want to terminate the contract early. You’ll also want to take a close look for additional fees, and make sure to note the varying processing rates for different types of transactions. Worldpay is a solid option, but you’ll want to read the fine print and scope out customer reviews to make sure it’s the right option for your particular business.

So many choices, so little time!

These aren’t the only options, of course. And ultimately, the decision on the right payment gateway for your app is up to you. There are many factors to consider: your target customers and how they use the app, the fees charged by the payment gateway, how easy it is to get your money, and how easy it’s going to be to integrate the gateway with your app.

We know it can be overwhelming. If you have more questions than answers, consult an expert. Your mobile app development company is familiar with a wide variety of options and will know what will work best with the functionality being built into the app. It may be complex, but once you make this critical decision, you can enjoy huge boosts to your bottom line.

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