Pick a Payment Gateway

Picking The Best Payment Gateway For Your SME

With Stripe’s recent announcement of lowered transactions fees, it’s becoming cheaper than ever to process payments. Here at ParcelHero, we love SMEs and getting the best bang for your buck, so we thought we’d help you out by having a look at whether Stripe really is the best way to take payments for your business. We’ve even broken it down into a table, so you can easily see the best Payment Gateway option for you.

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Company Transaction Fee Monthly fee £10 transaction 100 orders 500 orders
Stripe 1.40% £0.20 £0.00 £0.34 £34.00 £170.00
Paypal 3.40% £0.20 £0.00 £0.54 £54.00 £245.00
Amazon 3.40% £0.20 £0.00 £0.54 £54.00 £245.00
Sagepay n/a £0.12 £19.90 n/a £78.90 £190.00
Worldpay n/a £0.10 £19.95 n/a £19.95 £205.99

Now at first glance, that might not make much sense. When you break it down piece by piece, things start to get a bit clearer. First of all – and perhaps most relevant to SMEs – are the companies that charge a transaction fee instead of a monthly one. Paypal and Amazon charge a fee that changes depending on your company’s revenue, while Stripe sticks to the one flat fee until you’re considered a high volume trader – at which point they’re willing to chat about getting you a discount.

With these Payment Gateways, it really is very simple. They’ll take a small cut of whatever payment they process for you, along with another, separate fee for the processing. As you can see in the table, this works out to about 34 pence for a ten pound order with Stripe, or 54p through Amazon or Paypal. That number stays the same, and with no monthly fee to worry about, the only thing that might change it is international orders, which have different rates to worry about.

Who should be helping you collect payment?

Where things start to get a bit more complex is with Sagepay and Worldpay. They charge a monthly fee for their services, but that initially appealing prospect can get rather muddied when you really dive into actively using them.

With Sagepay, the basic account is the just the tip of the iceberg. For only £19.90 you get 350 transactions, which works out to a pretty appealing rate. To actually make use of those transactions though, you’ll need a Merchant Account because without one you cannot take card payments. Merchant Accounts aren’t free though. They run the full gamut between affordable and expensive, though a lot of them fall into the £40 a month range. Oh, and those card transactions aren’t free either, the Merchant Account will have a transaction fee attached to card payments – often different rates for credit and debit cards.

So suddenly you’re not looking at just £19.90 per month, you’re looking at more like £78.90 if you’re making only £1,000. For small businesses, this could be a cripplingly large cut of their earnings, but as the number of transactions gets larger, Sagepay gets more affordable. By the time you’re making around £5,000 in a month, our graph suggests you’re only paying around £190 for Sagepay’s services. That ratio only gets better as it trends upwards, so Sagepay could well be a great Payment Gateway option for larger SMEs, but not as affordable an option for the smaller.

Worldpay is a great option for businesses that service less than 350 orders in a month, as the monthly rate of £19.95 covers their transactions completely. Go over that number and you’ll be paying an extra 10 pence per transaction. Even then however, you’re getting a great rate, and as far as we could work out, there aren’t any hidden fees or extra things to pay for.

Once you’re passed 350 transactions in a month however, you graduate away from the Worldpay 350 account to a Worldpay Zinc account. Just that action is enough to set you back £79.99, but once your account is set up – which can take as long as a month – you’re only going to pay a £5.99 monthly fee. In exchange, you return to the transaction fee method we saw in Stripe or Paypal. The Worldpay rate is 1.95%, which is somewhere around the best that Paypal and Amazon will offer to their big customers. There’s no limit on the amount of transactions this entitles you to, so like Sagepay, this is the option that grows more and more affordable as a business grows.

Pick a Payment Gateway

Weirdly, Worldpay seems like the worst option for those caught between these stages. For small businesses, their monthly fee is a great deal, and as a business grows larger their Zinc account becomes a good, affordable option. There’s no middle ground however, so a mid-sized enterprise might want to steer clear of this until they grow.

So what’s the best option then? Like in so many things, it looks like the best option is to shop around. Flexibility, like in so many other aspects of business, is handy – the right option for you right now may not be the right option in six months.

And if one option isn’t exactly right for you? Don’t be afraid to mix and match – eCommerce software like Magento allows for using more than one payment option. That way you can take advantage of the brand recognition and reliability of Paypal or Amazon for certain transactions while getting the best deal out of Stripe for others.

And just like you should be looking to get the best deal out of your payment gateway, you should be looking to get the best possible deal when shipping your goods. ParcelHero is up to 62% cheaper than booking directly – and we’ve got another graph that shows just how good a deal you can get with us.

5kg Express

Express Signed for Delivery Post Office ParcelHero Saving Saving % PH Transit PO Transit
United Kingdom 24 – Parcelforce £17.48 £12.54 £4.94 28.26% 1 day 1 day
United Kingdom 24 – Royal Mail (1st class) £16.95 £12.54 £4.41 26.02% 1 day 1 day
USA £94.75 £35.61 £59.14 62.42% 2 days from 3 days
Australia £121.10 £50.27 £70.83 58.49% 4 days from 3 days
Germany £82.86 £39.02 £43.84 52.90% 1 day 1 day
France £82.86 £39.02 £43.84 52.90% 1 day 1 day
Italy £80.34 £46.19 £34.14 42.49% 1 day 1 day

5kg Economy

Economy Signed for Delivery Post Office ParcelHero Saving Saving % PH Transit PO Transit
United Kingdom 48 – Parcelforce £12.98 £12.54 £0.44 3.39% 1 day 2 day
United Kingdom 72 – Royal Mail (2nd class) £14.85 £12.54 £2.31 15.56% 1 day 3 day
USA £76.65 £35.61 £41.04 53.54% 2 days from 3 days
Australia £93.15 £50.27 £42.88 46.03% 4 days from 4 days
Germany £39.24 £18.94 £20.30 51.74% 4 days 3 days
France £39.24 £21.19 £18.05 45.99% 4 days 4 days
Italy £45.90 £24.55 £21.35 46.51% 5 days from 4 days

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