Accepting payments online is essential for most businesses, but the options can be confusing. Stripe, PayPal, Square—what's the difference? And what does integration actually involve? Here's what you need to know.
Understanding Payment Gateways
A payment gateway is the service that processes credit card transactions:
- Customer enters card details
- Gateway securely transmits to payment processor
- Transaction approved or declined
- Funds transferred to your account
You never handle raw card data—the gateway manages all the security compliance (PCI DSS).
This is crucial: handling payment data yourself requires extensive security measures. Always use a reputable gateway.
Popular Payment Gateway Options
Stripe:
- Developer-friendly
- Excellent documentation
- Supports subscriptions, one-time payments, invoicing
- 2.9% + 30¢ per transaction
- Best for: Custom implementations, subscriptions, marketplaces
PayPal:
- Widely recognized by consumers
- Offers buyer protection
- Can accept PayPal balance payments
- ~2.9% + 30¢ per transaction
- Best for: Consumer trust, international payments
Square:
- Integrated with point-of-sale
- Easy setup
- Good for retail + online
- 2.9% + 30¢ online
- Best for: Businesses with physical and online sales
Transaction Fees: What to Expect
Most gateways charge similar rates:
- 2.9% + 30¢ for standard transactions (US)
- Higher for international cards
- Subscription billing may have additional fees
- Some offer volume discounts
Fees are usually non-negotiable for small businesses. They cover fraud protection, payment processing, and maintaining PCI compliance.
Factor these costs into your pricing. A $10 product actually nets you about $9.40 after fees.
Integration Complexity
Integration ranges from simple to complex:
Simplest: Payment links
- Stripe, PayPal, Square all offer hosted payment pages
- You send customers to their checkout
- No custom development needed
- Works but less polished
Medium: Embedded checkout
- Checkout happens on your site via embedded iframe
- Better user experience
- Minimal custom code required
- Good balance for most businesses
Most complex: Custom API integration
- Full control over payment experience
- Requires significant development
- Best for unique workflows
- Necessary for marketplaces and complex needs
Security and Compliance
Payment gateways handle most security, but you're still responsible for:
- Using HTTPS everywhere
- Not storing card data
- Properly handling customer data
- Following the gateway's integration guidelines
Using hosted checkout (Stripe Checkout, PayPal Standard) reduces your compliance burden—the gateway handles the card data entirely.
For custom integrations, you'll need to complete PCI compliance questionnaires. Stripe and others provide guidance.
Testing and Going Live
Before accepting real payments:
1. Use test mode with fake card numbers
2. Test successful payments
3. Test declined cards
4. Test refunds and disputes
5. Verify webhooks work correctly
6. Test on mobile devices
Once testing is complete:
1. Switch to live API keys
2. Complete business verification
3. Set up bank account for payouts
4. Monitor first transactions closely
Start with small test transactions before announcing payment acceptance to your full audience.
Payment gateway integration doesn't have to be intimidating. For most businesses, Stripe or PayPal with an embedded checkout provides the right balance of security, ease of integration, and user experience. Start simple with hosted solutions if you're unsure, and customize later only if you need specific functionality that requires it.