Top E-commerce Payment Gateways for Dropshipping Stores

Reading Time: 5 minutes
Reading Time: 5 minutes

An e-Commerce store without a payment gateway is unimaginable. e-Commerce payment gateways are software systems which enable online merchants to process digital transactions via credit cards and other forms of internet transactions.
If you want detailed information on what is payment gateway, here is all you need to know.

How Does Payment Gateways Work?

Payment gateways act as a virtual middleman or mediator between the eCommerce platform and acquiring bank. They are the digital equivalent of a point of sales found in brick and mortar stores.

Payment Gateways follow this Process

    • When customers place the orders through websites or web-enabled mobile devices, their browser encrypts sensitive information of payment instruments (for example, credit cards) and ensures that payment information shared by the customer with the merchant remains secure.
    • This information is transferred from the customer’s browser of merchant’s web-server via Secure Sockets Layer (SSL), the standard and most widely deployed security protocol technology.
    • The merchants forward this information to their payment gateway which is also SSL-enabled.
    • The payment gateway passes this information to the payment processor used by the acquiring bank of the merchants.
    • The payment processor forwards this information to the VISA/MasterCard/any other card issuing bank used by the merchants.
    • The credit card issuing bank processes this information and reverts with the response following the same route, but in the reverse order.
    • The merchant receives the payment within 1-2 working days after all the necessary authorizations.

Why Dropshippers Need e-Commerce Payment Gateways?

Dropshippers Need e-Commerce Payment Gateways


The first and foremost benefit of payment gateways for dropshippers is that it reduces the frequency and severity of fraud of financial transactions. Moreover, payment gateways enable merchants to accept digital payments and get the transactions authorized. A payment service provider is the only way to verify the credit card or other financial information entered by the customers on the e-Commerce store. In fact, payment gateways also store payment information in an encrypted manner so that customers don’t have to re-enter the details every time they make a purchase.

Criteria for Choosing a Payment Gateway

Before setting up a payment gateway, dropshippers need to fulfil some basic requirements:

    • Launch a working website
    • Buy a domain name
    • Open a bank account
    • Select third-party payment processors such as PayPal or Due.

After these step, dropshippers can take help of payment service provider to integrate a payment gateway full-fledged with the online store. However, it is important to consider the following factors for choosing the best payment gateways:

  • Hosted Vs Integrated

Hosted payment gateways redirect customers to payment service provider’s page where they will need to fill their credit card details. Once the customers have done the needful, customers would be redirected to the dropshipper’s website. The key advantage of the hosted option is that merchants don’t need to bother with security concerns and PCI compliance. However, this may reduce conversion rate if the payment fails to process due to some error which will reduce customer trust in the e-store.

Integrated payment gateways enable the merchants to accept the payments on their own website rather than redirecting them to an external page. This will keep the customer data secure and enhance the brand image of the store. However, the merchant will need to follow and maintain all security protocols which otherwise is the hassle of the payment gateway service provider.

  • Payment Gateway Plugin

The e-Commerce store should have off-the-shelf plugins or extensions to integrate payment gateways. So, whether dropshippers use Shopify, Magento or any other e-Commerce platform, they have to make sure it has integration features to build the payment gateway.

  • Reputation

Choose a payment gateway service provider who has long-standing experience and credibility. The fact that they have been operating for over a number of years is the testimonial to their work. They would know how to handle the setup and issues without glitches.

  • One-Stop Payment Service Provider Vs Payment Gateway + Merchant Account

Some payment service providers offer a combination of both payment gateways as well as merchant accounts. This means that the dropshippers don’t have to go through the trouble of opening a merchant account on own. However, if the dropshippers are not comfortable, then they can open their own merchant accounts separately and take only payment gateway feature from the service provider.

  • Preferred Payment Methods

While MasterCard and Visa are the most common payment methods across the world, e-stores prefer to follow niche payment methods used in their countries. So, the dropshippers should select the service provider who can support the requisite payment methods.

  • PayPal as an Alternative Payment Method

Many leading eCommerce stores such as eBay, Google Play and IKEA offer Pay Pal option to their customers. PayPal is a reliable online payment service through which customers can complete the transaction instead of using the merchant’s payment gateway method. There are many customers who trust PayPal account to make purchases, especially if the e-Commerce store is small or new in the market. PayPal keeps their credit cards secure without disclosing them to the merchant.

PayPal can be a profitable addition to the main payment gateway for two reasons. One, it will bring more customers to the site. Two, if the main payment gateway goes down due to some technical issues, PayPal can act as a backup.

  • Price and Agreement Duration

Every payment gateway service provider has their own rate card. The price of the service could be monthly, per transaction, on the slab-basis and even include other variable fees such as chargebacks or international payments. It is advisable to compare all payment service providers on these parameters and select the one which is most cost-effective.

Dropshippers should also avoid signing up for a long-term contract. A monthly rolling contract is the safest bet because it allows dropshippers to pull out of the contract if the services are not up to the mark.

Best Payment Gateways Options

best payment gateways

Here is the list of the best payment gateways:

  • Stripe

Stripe combines the functionality of a payment gateway and a merchant account in into an uncomplicated API, thereby making direct integration possible. Customers would not need to leave the merchant’s website to complete their purchase transactions. Stripe is quite popular among the American and Canadian dropshippers. It also offers some unique features – customers can buy directly from a tweet or opt for one-click checkouts. It is available across 25 countries. Even Shopify payments are now powered by Stripe.

  • net finds its popularity among e-Commerce merchants in Europe, United Kingdom, Canada, United States and Australia. It also enables merchants to allow their customers to store their credit card details for future purchases.

  • 2Checkout

2Checkout is a great option for dropshippers with multinational presence. This payment gateway accepts both credit cards and debit cards across 87 currencies across 15 languages.

  • Amazon Pay

One of the leading payment gateways in the United States, Amazon Pay is known for its A-Z guarantee of making transactions 100% secure. It ensures that customers get improved user experience and do not have to spend more time figuring out the check-out process.

  • PayPal

We have already talked about PayPal above. The prominent reason why dropshippers should incorporate PayPal as the second payment gateway if not the primary one is that it has worldwide acceptance in more than 200 countries.

A strong e-Commerce payment gateway partner can take your business to new heights of growth and success. Choose the one that fits into your business needs and budget, and at the same, can be scaled as your business grows.

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