Whether you’re a large or a small business, mobile shopping is increasingly relevant to your sales strategy. With mobile devices now glued to consumers’ hands nearly 24/7, they have become a crucial portal to connect people with family and friends—and with their favorite brands.
But to accept mobile payment seamlessly and securely, you need a mobile payment gateway. In this article, we’ll cover what you need to know to select the best mobile payment gateway for your needs.Learn More
What is a Mobile Payment Gateway Provider?
A mobile payment gateway is a functionality that allows customers to make digital payments for purchases made via mobile apps. In essence, a mobile payment gateway provider serves as the final touchpoint in the shopping journey between the customer and the online business.
Just like desktop eCommerce shopping, mobile payment gateways are responsible for ensuring that sellers can receive and process online payments securely across multiple payment methods.
Ensuring that mobile payment processing takes place quickly and seamlessly is crucial to avoiding shopping cart abandonment from your mobile application—and most importantly, ensuring that fraud protection is as strong as possible.
Why Should a Business Consider a Mobile Payment Gateway Provider?
Now you know what a mobile gateway is, let’s look at the reasons to consider implementing it in your business.
Consumers Prefer to Shop on Mobile
The consumer preference for mobile shopping has been growing steadily. In 2022, nearly three out of every four dollars in online sales are made through a mobile device. That’s a lot of eCommence revenue now tied to mobile commerce.
Despite its popularity, the quality of the user experience on mobile continues to lag. Although 57.5% of consumers in a Heady study said that mobile apps were more convenient than other channels, 23% said that “clunky user interfaces” were their biggest dislike, while 19% say that mobile apps are “slow to complete the task at hand.”
If you’re going to win over mobile shoppers, an easy-to-navigate mobile payment gateway is essential to keep customers coming back to discover more products and services.
Maintaining payment security
No matter how many selling channels you operate, your payment solutions should offer the same level of security for payment processing.
It’s worth considering that despite consumers being savvier about shopping online, concerns about fraud detection and safety remain. Research shows that 80% of consumers are worried that their personal data, such as card information, is being exposed when shopping online.
Choosing a payment gateway integration for your mobile app that is compliant with the PCI DSS (Payment Card Industry Data Security Standard) means that both you and your customers can rest easy when it comes to mobile and in-app payments.
Offer your customers more flexibility
Customers are demanding greater levels of flexibility and choice when they shop online. Rather than fitting in with what’s convenient for the merchant, they expect brands to cater to their needs and preferences.
From multiple payment options to recurring billing and invoicing, payment gateways make it possible for merchants to integrate value-added services into the payment experience. It’s an easy way to help your brand stand out from the crowd by providing a higher level of service.
How Do Mobile Payment Gateways Work?
Mobile payment gateways form a bridge between the customer and the business they’re purchasing from, similarly to a POS and a card reader in a physical storefront:
- The customer fills their shopping cart and heads to the checkout inside the mobile app.
- At the point of sale, the customer chooses their preferred payment option and is directed to enter their card details, or through an alternative gateway (such as PayPal payments or Apple Pay).
- The in-app payment gateway forwards this information to the issuing bank. This may include a tokenization process as an additional feature.
- The issuing bank verifies the transaction and ensures that the customer has a sufficient balance in their bank account or credit card to complete the purchase.
- If the payment is successful, confirmation is sent back to the app via the mobile payment gateway
- Once the payment has been settled, it will be transferred to the business’s merchant account.
Top 4 Features To Look For When Choosing a Mobile Payment Gateway Provider
There are dozens of providers offering mobile payment gateways, but not all services are alike. So, what features/tools should you be looking for in a payments platform?
Seamless checkout across devices
With a multitude of mobile devices and screen sizes now available, it’s important that you choose a payment gateway that’s compatible with multiple options. Unresponsive checkout designs lead customers to struggle with filling out payment details or, more likely, abandon their purchase altogether.
Make sure your mobile payment gateway is compatible with both Android and iOS screen formats so your shoppers have the best payment experience possible.
Security certified checkout
Choosing a payment gateway provider with PCI compliance is vital for fraud prevention and giving customers confidence in the checkout process. According to Baymard Institute, almost one-fifth of cart abandonment occurs because consumers are concerned about security on an app or website.
Recognizable trust badges at your payment gateway are a signal that you are a safe merchant to do business with. Moreover, staying PCI compliant is the best way to protect your business in the event that a data breach or fraud does affect your customers.
Multiple payment options
Shoppers expect to choose from various payment options when shopping on a mobile device. Tapping out credit card details is a time-consuming and stressful process for customers. For this reason, mobile and e-wallets like Google Pay have gained widespread popularity.
According to Juniper Research, 2.8 billion mobile wallets were in use globally at the end of 2020, with this number forecast to jump 74% within five years. In sum, it’s vital that your gateway accepts this payment system alongside more traditional options like ACH, Visa, and Mastercard.
Easy integration with your mobile app
A fully-integrated payment gateway within your mobile app is essential to give your customers a smooth, uninterrupted shopping experience. Ideally, your gateway should require minimal involvement from developers.
Be sure to choose a payment gateway service that offers an SDK or Software Development Kit. This is a set of app development tools supporting a payment service’s open API, allowing the mobile app to share information with its payment gateway. Make sure that the SDK package is small so as not to slow down your payment processor.
How To Find and Select a Mobile Payment Provider
Once you know what features are most important for your business, it’s time to start searching out service providers that fit these criteria. But to search and select the best payment gateway for your needs, there are a few other factors to bear in mind:
How much does it cost?
Every mobile payment gateway provider will have a slightly different pricing model, so it’s important to understand what’s included and what isn’t. Some service providers will charge monthly gateway fees in addition to chargeback and transaction fees. Accepting some credit card payments, such as American Express, may incur extra charges. There may also be an additional setup fee for some services, depending on how customizable their payment gateway is.
What does the transaction flow look like?
The payment process will differ between different gateway providers. This is because the transaction flow is determined by how the gateway is integrated with your mobile app.
For example, some payment gateways are embedded directly into the checkout via an iframe, while others will redirect customers to a secure hosted page. Which option is best for your business will depend on what your existing customers are used to using and whether they might get put off by a redirect to another page.
Is a merchant account included?
A merchant account is a business bank account that allows merchants to accept electronic transactions. Some mobile payment gateways will offer a merchant account as part of your subscription, while others will require you to bring your own. It’s worth noting while getting a merchant account from your provider might be convenient, you’ll likely face longer timeframes for money transfers.
Where does their service operate?
If your business is serving an international market, your chosen gateway must provide services to all the countries you operate in. Some gateway providers will charge extra fees to process payments outside of main markets such as the United States, Australia, or Canada, or may not accept them at all.
Top Mobile Payment Gateway Providers
Unsure where is the best place to start? Check out our list of the top fintech providers to consider for your mobile payment gateway:
Commonly rated as the #1 eCommerce payment processing provider, Stax provides transparent monthly pricing plans tailored to both emerging and established businesses. All plans offer next-day access to funds, full PCI compliance, and 24/7 customer support.
Price: Plans start at $99 per month, custom pricing is available for businesses processing more than $500,000 annually.
Payment methods accepted: ACH, all major credit/debit cards, invoicing, digital wallets, Text2Pay.
Available in: United States
Best for: Startups, small to medium-sized businesses, enterprises, and subscription-based businesses.
Stripe is a global payment gateway that supports over 135 currencies in addition to a wide range of payment options, including local payment options such as WePay and AliPay. Stripe also guarantees seven-day payouts nationwide, with two-day payouts for U.S.-based transactions.
Price: no monthly fee, 2.9% + 0.30c per card charge. Volume-based discounts are available.
Payment methods accepted: All major credit/debit cards, digital wallets, Afterpay, foreign currencies, local payment types.
Available in: 30+ countries/regions
Best for: Businesses who are selling cross-border or want more customization capabilities.
Braintree is a highly flexible payment solution that offers a full suite of features, from recurring billing to real-time analytics, as well as a standalone payment gateway option at $49 per month.
Price: No monthly fee, 2.59% + $0.49 per card charge (an additional 1% charge for cards issued outside of the U.S.
Payment methods accepted: ACH, All major credit/debit cards, recurring billing, mobile wallet, foreign currencies.
Available in: United States, Canada, Australia, Europe, Singapore, Hong Kong, Malaysia, New Zealand
Best for: Businesses who only require a gateway and may want the option to expand capabilities later.
One of the most well-known payment providers, PayPal’s pay-as-you-go pricing makes it easy to keep track of payment processing costs.
Price: No monthly fee, 2.59% plus $0.49 per card charge (an additional 1.50% charge for international payments)
Payment methods accepted: All major credit/debit cards, mobile wallets, cryptocurrency
Available in: 200+ countries/regions
Best for: Businesses who want a low-maintenance, quick-to-set-up payment gateway.
Adyen is a good choice for businesses who want more customization options for their payment gateway. With Adyen, you can build a branded payment gateway and tailor your transaction flow to what works best for your customers. Acceptance in multiple countries increases flexibility for merchants with a global customer base.
Price: No monthly fees, $0.12 processing fee, plus a fee of 3-4% for most payment types
Payment methods accepted: ACH, All major credit/debit cards, mobile wallets, Afterpay.
Available in: 60+ countries/regions
Best for: Merchants processing at least 1000 transactions per month.
Whether you’re a giant the size of Amazon or a small business processing a few hundred transactions a month, every business offering mobile shopping requires an appropriate payment solution to streamline the customer experience and keep track of every payment. Thanks to this guide, your business should have no problem selecting the best mobile payment gateway provider for your unique needs and keeping your mobile customers happy.
Check out Stax or get in touch today to find out how we can make mobile payment processing a breeze.