Last editedJul 20236 min read
Payment processing systems enable the online transfer of funds between buyers and sellers, efficiently streamlining the transaction process and ensuring security while facilitating payment via bank payments, credit and debit cards, and other forms of electronic payments. The best payment gateway will depend on your business requirements, but it should incorporate technologies such as encryption and tokenisation. Furthermore, the role of payment gateways extends to compliance with financial regulations and standards, such as the Payment Card Industry Data Security Standard (PCI DSS), thereby offering a reliable and trustworthy framework for both businesses and consumers.
What is a payment processor?
A payment processor is a technology used by businesses to securely accept online payments by transmitting customer data between the front-end interface, typically a website or mobile app, and the payment network, such as a bank or credit card company. It serves as the middleman between the parties involved in that transaction – typically the merchant and customer, encrypting sensitive information like bank account and credit card numbers, ensuring they're safely transferred between customer and merchant.
When a customer wishes to make a card payment, their financial details usually follow this process:
Card details are submitted to the merchant
The merchant’s payment processor takes the details
Details are passed to the payment gateway (if not integrated with the processor)
Details are passed to the customer’s bank for authorisation
Payment is submitted to the merchant’s bank account
Although dominant for a long time, card payments are not the only way to accept customer payments. Bank payments offer an often cheaper, simpler, and more reliable way of collecting both one-off and recurring payments.
When a customer wishes to make a bank payment, their financial details usually follow this process:
The merchant’s payment processor takes the details
Details are passed to the customer’s bank for authorisation
Payment is submitted to the merchant’s bank account
As you can see, there are fewer steps in the bank payment process, making bank payment collection more efficient and cost-effective. The payment processing service you choose is essential to facilitate these transactions and as part of the broader customer experience.
How to collect Direct Debit payments with GoCardless
1.
Create your free GoCardless account, access your user-friendly payments dashboard & connect your accounting software (if you use one).
2.
Easily set up & schedule Direct Debit payments via payment pages on your website checkout or secure payment links.
3.
From now on you'll get paid on time, every time, as GoCardless automatically collects payment on the scheduled date. Simple.
Features of the best payment processing companies
As you start comparing various options, you may note that there are a few features that the best payment processing systems will have in common.
Multiple layers of security
User-friendly interface
Integration with payment gateway
The 8 best payment processing systems
Now that we’ve outlined a few of the features to look for, here’s our pick of the top payment processors out there.
1. GoCardless
We are a payments platform helping you collect payments directly from your customer's bank account, removing the stress, frustration, and costs of card payment collection. Through GoCardless, businesses can combine the power of bank payments with open banking technology to access an ultra-secure, easy, and reliable payment method, perfect for small businesses.
GoCardless makes it quick and easy to get started, and with no contracts or long-term commitment required, there’s no risk. You can set up instant, one-off, or recurring payments in the merchant dashboard in just a few clicks, and GoCardless automatically creates and sends all the necessary forms, doing all the heavy lifting for you. You can also connect to GoCardless via over 350 partner apps, such as Xero and Quickbooks.
Bank payment via GoCardless is more affordable, more secure and more reliable than accepting credit and debit cards.
"Customers don't need to worry about fraud like they do with credit cards and bank accounts don't expire, so they’ll never need to update their details." - Scott Westbrook, Director of Business Systems, Deputy
2. Stripe
Stripe offers a more general solution sure to suit any online retailer. It’s highly customisable, meaning you can choose from a variety of APIs to match its service to your own website best. You can accept credit and debit card payments in over 100 currencies and cryptocurrencies. To start using Stripe, you'd benefit from having some developer time at your disposal, as it's on the technical side.
3. PayPal
You’re probably already familiar with PayPal, but this popular service deserves to be on the list of the best payment processing companies for its ease of use and ubiquity. It’s a good choice for small businesses dealing with low transaction volumes, but you pay higher fees as a premium for the familiar name. That said, it’s also widely accepted abroad with easy website integration.
4. Square
If your business needs to process payments in person, Square has handy point-of-sale features like a contactless chip reader, magstripe reader, and convertible stand. All these components let you take payments directly from your smartphone. The system connects with your online business presence as well for seamless transactions. Card payments will always be more expensive, but going with the status quo may be a good option for in-person transactions.
5. Adyen
Based in Amsterdam, Adyen is an international payment processing company operating in multiple countries so that you can accept money anywhere. It’s a good option for any small business that needs to transfer money in real-time, with multiple payment methods available, from credit card payments to bank transfers.
6. Flagship Merchant Services
As your small business grows, you may need to consider scaling up to a processor that can handle higher volumes of credit card transactions. Flagship Merchant Services is an all-in-one processor charging businesses a flexible monthly rate. It enables both in-person and online credit card payments and mobile payments.
7. Apple Pay
If your client base includes a high percentage of Apple product fans, you’ll want to give them the choice of Apple Pay. They’ll be able to pay you directly from their iPhone or iPad with contactless technology. Apple Pay also enables credit and debit card payments, bank transfers, and cryptocurrency from its digital wallet.
8. Wise
Wise is a payments system specifically geared at cross-border payments. You can benefit from transparent pricing and its broad reach. It does focus on international payments, so if you're looking for recurring payments or integration capabilities, other options could be a good bet.
Key takeaways
The best payment processing system for your business will depend on your specific business requirements - a big decision is whether to go with bank payments, card payments, or both.
Despite their ubiquity, card payments often incur higher fees and more patent failures than direct bank payments, impacting merchants and customers.
Some popular card payment solutions like Stripe and PayPal require significant technical resources or charge premium fees, creating potential barriers for some businesses.
Card-based systems like Apple Pay and Flagship Merchant Services cater to specific demographics or larger transaction volumes, which may not offer all businesses the best value or versatility.
"For ongoing monthly payments GoCardless is perfect. You can easily adjust the subscription amounts and don’t suffer from the problem of expired cards." - Charles Cridland, Technical Director, YourParkingSpace
Case study
Gibraltar-based insurance intermediary, Taurus Insurance, attributes a significant increase in its collection success rate to GoCardless. Using GoCardless, Taurus handles around 48,000 monthly payments, with a staggering 99% collection success rate.
As Clare Caras-Altas, Finance Director at Taurus Insurance, says,
"The entire business takes in the region of 48,000 payments a month, with 99% of those collected by GoCardless, which runs like clockwork.”
GoCardless's reporting capabilities also receive high praise from Clare, who lauds the "excellent reporting facilities" and the "easy to access and understand" data.
A standout feature of GoCardless's service is the Success+ module, which uses machine learning to minimise failed payments and maximise collection rates. The module intelligently determines the best times to retry payments, resulting in improved collection rates for says Clare,
"We have historically had a very good collection rate, but it improved by more than 2% with Success+"
Moreover, the simple, efficient and cost-effective Success+ module reduced the time spent chasing failed payments by 64% and improved customer relationships for 70% of its users.
Lastly, Clare highlights the role of the GoCardless customer success team in fostering growth for Taurus Insurance.
"GoCardless gives me the peace of mind that the customer journey is simple, collections are extremely high, and the numbers in my reports are correct,"
With support from GoCardless, Taurus is poised to expand into Australia and the European Union by the end of the year.
We can help
Setting up payment processing is fast and efficient with GoCardless. By automating the payment collection process, GoCardless drastically cuts down the administrative responsibilities of payment collection for your team.
GoCardless makes it quick and easy to get started, and with no contracts or long-term commitment required, there’s no risk. You can set up instant, one-off, or recurring payments in the merchant dashboard in just a few clicks, and GoCardless automatically creates and sends all the necessary forms, doing all the heavy lifting for you. You can also connect to GoCardless via over 350 partner apps, such as Xero and Quickbooks.
Discover how GoCardless can automate payment collection, reducing late and failed payments and making it easier to concentrate on what matters most - your business growth.
Reduce transaction fees, late and failed payments and tiresome manual admin.
Frequently asked questions
Which payment gateway is best?
Many factors should be considered when seeking the best payment gateway, including transaction fees, customer service, compatibility with different currencies, and ease of integration. One standout option is GoCardless, globally recognized for its emphasis on direct debit payments, cost-effectiveness, and user-friendly interface. With over 55,000 businesses worldwide, GoCardless offers a transparent pricing model, comprehensive currency support, and superior API, making it ideal for small and large multinational corporations.
How payment gateways are working?
Payment gateways function as the digital equivalent of a physical point-of-sale terminal in a shop, enabling businesses to process online transactions securely. Customers' card or bank information is encrypted and sent to the payment gateway when they place an order.
This gateway then forwards the data to the merchant's bank, which sends it to the customer's bank for verification. The funds are transferred to the merchant's account if the transaction is approved. GoCardless, a leading global payment gateway, is among the best systems for this task, acclaimed for its efficient Direct Debit services. GoCardless is renowned for its seamless integrations, enhanced security measures, and its ability to handle recurring payments with ease, thereby offering businesses a robust, reliable, and streamlined solution for their online payment needs.
What is an API payment gateway?
An API payment gateway is a technological interface that allows a merchant's website or mobile app to seamlessly integrate with a payment processor to facilitate secure, efficient online transactions. Prominently, GoCardless offers a robust API payment gateway, allowing businesses to handle direct debit payments across Europe, the US, Canada, Australia, and New Zealand. With GoCardless's API, you can automate payment collections, ensuring that transactions are processed swiftly and securely. This service allows businesses to offer a smoother customer checkout experience, streamline payment management, reduce the risk of payment fraud, and promote operational efficiency by freeing up resources that would otherwise be committed to manual payment processes.
