Payment Gateway Battles: Klarna VS Afterpay VS PayPal

Thanks to payment gateways, shopping online has been made not only quicker but easier for us to purchase everything that we want… (even if we don’t have the immediate funds available!)

As they handle such sensitive information, it is important that you don’t rush into choosing a payment gateway, if it’s not right for your eCommerce business and its needs. 

Abandoned carts are something that every eCommerce retailer has to deal with, and though there are many reasons for this to happen, a study showed that https://baymard.com/blog/ecommerce-checkout-usability-report-and-benchmark. Even if 6% doesn’t strike you as a high percentage, it’s an amount that could be easily avoided. 

What is a Payment Gateway?

A payment gateway is a technology which processes payments within your store – no matter whether you’re a brick & mortar store or eCommerce. Think of it as the middleman that stands between your customer and your business’ bank account. 

The payment gateway encrypts the data that is passed between the user, merchant and bank.

How does a Payment Gateway work?

When your customer purchases an item on your online store, the payment gateway begins a series of tasks in order to finally process the payment.

The payment gateway can then process the payment by:

Redirected to the Payment Gateway’s site

Being redirected to a page to enter their credit card details. For example, when purchasing from eBay, you can opt to pay for the item via PayPal. This will then take you away from eBay and make you log into PayPal in order to pay for the item. 

This method of payment, though can be seen as more secure, can lead to a lack of control for retailers as customers’ payment details are kept within the payment gateway’s servers.

Payment is done directly on your site

When a retailer is large enough, they tend to have the capabilities to hold the payments on their own servers whilst ensuring security for their users.

You can be spoilt for choice when choosing between the different payment gateways as there are so many options out there… which is why we’re going to discuss the pros and cons of a few of our favourites including https://www.klarna.com/uk/, https://www.paypal.com/uk/home& https://www.clearpay.co.uk/en-GB.

What should you consider in a payment gateway?

When considering a payment gateway, there’s a lot to consider and sometimes it can be overwhelming. Here are our top questions to consider when looking to choose a payment gateway:

• How soon do you need it set up?

Klarna

Klarna is a Swedish payment gateway and is now one of Europe’s largest banks as they provide their payment services to over 60 million consumers across 130,000 merchants in 14 different countries.

It’s safe to say that Klarna has blown up in recent years, with more and more retailers offering their ‘buy now, pay later’ service.

Pros:

• Klarna can run on most platforms, including Remarkable Commerce, Magento and Salesforce Commerce Cloud and is easily integrated with them.

Limitations:

• As

PayPal

Most retailers will be familiar with PayPal, as they’ve been a big player in the payment gateway game for a number of years. 

Pros:

• Fees vary depending on your sales volume. Though the fees may seem expensive to a smaller retailer, especially if they’re low-priced items, for larger retailers, they definitely seem to be more reasonable, at anything below

Limitations:

• For payments processed through PayPal, it can take up to

Afterpay (aka ClearPay here in the UK)

Clearpay is the British sister of the popular payment gateway known as Afterpay. This ‘buy-now, pay-later' platform has really taken off.

Pros:

• There’s no lengthy process

Limitations:

• Possibly to compensate for the lack of interest in your customers, Afterpay has a

Choosing the best payment gateway for your business will hugely depend on your current position in the market and your business strategy for the foreseeable future. 

The best ‘all-around’ payment gateway is…

Despite a 3-day wait for processing payments, the low-interest rates for businesses and credit flexibility really make PayPal a winner for any type of business. No matter whether you’re a small retailer, B2B or the type of business that you do, PayPal has a solution for you. 

The best payment gateway for B2C retailers is…

Klarna is a ‘fashionable’ payment gateway at the moment, but due to the multiple ways of customer payment, it encourages customers to not only buy more but also to have control over their payments.

If you’re looking for an eCommerce platform that seamlessly integrates with your current third-party software, the https://remarkable.net/commerce-platform/ integrates with a wide variety of https://remarkable.net/integrations/payment-gateway-integrations/ including Klarna, PayPal and Afterpay. Give our experts a call for more information.