Stripe vs. Braintree: Best Payment Gateway For Your Business

Payment gateways are the merchant service provided by e-commerce application service providers to accept online payments via credit/debit cards. Customers make these payments against purchases from the eCommerce platform and the payment goes to the acquirer. Payment gateways like Stripe are useful in retail processing, e-commerce and online stores, point of sale solutions, mobile payments, cash advance/lending and advanced reporting.

Why is a payment gateway required?

Payment gateways reduce the severity of online fraud via credit card. In such a type of transaction, the customer is not swiping the card physically. They initiate transactions with their or someone’s card; which increases the chances of fraud. The fraudsters cannot easily access card holder’s data via a payment gateway. It nullifies the chances to initiate illegitimate transactions, thus saving your brand because the payment gateway relies on the information provided by the customer, the merchant, the issuing bank and the acquirer. All these details are encrypted to keep away from unwanted threats and other issues – expired cards, insufficient funds, closed accounts or exceeding credit limits.

What are the alternatives to Stripe vs. Braintree

Stripe and Braintree Alternatives include Square Payments, Venmo for Business, Amazon Pay, CardConnect, GoCardless, Braintree Direct, Heartland Payment, Shift4 Payments, PayU, Adyen, EBizCharge, Payeezy, BlueSnap, CyberSource Payment Management Platform, PayPal and Worldpay.

Payment gateway vocabulary

Primary players in online transactions are:

• Merchant Account – Payment gateways are required to accept cash card payments. A business (e-commerce) should have a merchant account to accept payments from customers.

• Multi-Currencies – Payment gateways must have support to accept various currencies and accept international payments.

• The merchants – They offer the service specific to the bank account required for card payments/online trading (e.g. Amazon shopping app are the merchants)

• The customer – They are the cardholders who make the online payment. (e.g. They make the purchase)

• The issuing bank – They issue the credit or debit card on behalf of the card schemes (e.g. Issuing bank can be ICICI, HDFC etc.)

• The acquirer – They are the acquiring bank that maintains the merchant account (e.g. all the payments that Amazon online shopping app receives goes to this bank)

All payment processors showcase some features:

How to choose a payment gateway provider?

We need to consider these points to estimate the best service provider:

• The estimated service cost
• Fraud security
• Virtual terminals
• Is it mandatory to have a merchant account for the chosen gateway?
• Is the payment gateway country/currency-specific or supports international payments

However, there are appended challenges:

Challenges with payment gateway

Online fraud poses some risk to the health of payment gateways. Many times, online transactions involve ‘card not present’ type transactions. Payment processors resolve chargebacks that are inversely proportional to the merchants.

Fraud and chargebacks

• Chargebacks and fraud chargebacks involve automatic debit of the amount, even if the goods/services are in place.
• Such a transaction is illegal/prohibited.

Cross-border transactions

• Such transnational transactions can be slow and expensive.
• Plus, the international governments involved regulates the fees and payments. Merchants should achieve economies of scale and consolidate risks.
• Transnational systems will cease to emerge if businesses rely on correspondent networks.
• The liquidity, costs, credit risks are managed effectively by payment systems. Outsourcing such services will increase the processing efficiency and reduce the cost.

Technical Integration

It involves linking the payment processors with other systems, failing that delays payment, transaction loss and expensive fees.

Card Data Security

• Merchants need to have payment-card industry data security standards (PCI DSS) certification.
• This certification ensures that the business meets security standards across: to protect cardholders’ data, build a secure network, have secure access control measures, have a vulnerability management program, maintain an information security policy and regularly monitor networks.

Multi-currency and regional challenges

• When merchants accept global currencies from mobile payments, e-wallets, and credit/debit cards, they need a new business entity o view every national market, a corresponding new bank account to handle new regulatory hurdles.

Increasing customer expectations

• If it raises customer expectations, you’re on the right track.
• It involves offering a wide variety of API hosted payment gateway integration options like debit cards, credit cards, PayPal, UPI, Cash cards, Net banking, useful for online purchases.
• Also, a mobile version of your business will encourage sales and increase customer retention.

Multiple payment gateways can lead to higher costs

• Contracting multiple payment gateways, setting up transaction procedures, channelling sales, processing fees, monthly pay memberships and transaction costs can be a task that comes with a decent price.
• A merchant account is a place where all the transaction money from customers consolidates.
• It comes up with a certain monthly fee and a higher per-transaction rate.

Besides these, payment processing platforms like Stripe can bring additional challenges – long payout times, account freezes or cancellations and unhelpful or unresponsive customer service.

Businesses need to turn these challenges into opportunities and select the online payment processing system with the best features.

Features to look for in best payment gateways

Best Payment Gateways come with these features:

• Modern or Classic – Payment gateways might apply directly to the merchant account or allow using services directly with higher fees and may send your customers offsite to make a payment without any setup. An example of a classic approach is Autorize.net while Paypal is a modern payment gateway.

• Security – The payment gateway should be PCI DSS Level 1 compliant.

• Easy Integration – Payment gateway should seamlessly integrate with your existing platform, so that every time a digital transaction takes place, it starts reflecting on the tool that is already in use.

• Detailed Reporting – Along with capturing the transactions, a payment gateway offers detailed reporting; and faster reconciliation; helpful in making informed business decisions.

• Invoicing options – Inbuilt invoicing attached to every digital payment
• Multiple payment options – Payment gateways support multiple currencies.

• Fast processing speed – It is required for a hassle-free user experience

• Encryption standards – Secure gateways lower risk and can achieve lower processing costs.

• Compatibility – Payment gateway should integrate with invoicing systems.

• Costs and fees – No additional fee for transactions, zero setup costs and zero monthly payments but a higher fee for chargebacks, flat monthly fee.

Stripe vs. Braintree: Which one to favour?

Both Stripe and Braintree are third-party, online-only online-only credit card payment processors. These process credit card transactions for different businesses into a single merchant account. Users get instant access to the payment processor without signing up for a dedicated merchant account upon sign up.

Conclusive: How to choose the best payment gateway for your business?

A payment service provider always needs to have a plan-b in case of frozen or cancelled transactions. The payment might take some time to credit back into the bank account or some transaction fee gets deducted. Processing payments and using such processors can be easier; there should be fraud screening services. The payment processor systems are not designed for businesses that accept physical credit cards. These are designed for tech businesses, for the ability to customize their payment solutions using API.

We design applications to simplify daily business operations catering to online, on-demand platforms featuring digital payment gateways. Our solutions are customizable, simple, streamlined, secure and technologically advanced. We offer post-sale support and maintenance at reasonable/transparent prices, flexible contract terms and expert development services. Reach out to us for the development and integration of payment processor services.