Everything you need to know about payment solutions for webshops

The difference between a payment gateway and an acquiring agreement

The first thing you should be aware of is that a payment solution includes both a payment gateway and an acquiring agreement.

What is a payment gateway?

The payment gateway is the payment window the end customer sees when entering card details. The payment gateway is provided by a payment provider that supplies the technical platform and ensures that payments are processed securely and that the end customer’s card information is handled responsibly. It is through the payment provider’s platform that payments are managed from start to finish.

There are generally two different types of payment gateways:

• The payment gateway is implemented directly in the webshop (e.g., your WooCommerce webshop), so the customer feels they stay on the website during payment
• The customer is redirected to an external payment window to complete the payment

Which of the two types above is chosen depends on the payment provider’s implementation options and the experience you want to give the customer. For webshops the customer does not know or has not shopped with before, an external payment window can provide extra reassurance that card details are handled responsibly, while an embedded payment gateway can provide a smoother checkout experience.

The payment gateway is implemented in the webshop via an API that exchanges data about the order and the customer.

In short, your payment gateway is the solution that enables customers to make payments in your webshop.

What is an acquirer?

An acquirer is the party that checks whether the customer’s account has sufficient funds and notifies the payment gateway that the payment is approved. The acquirer then withdraws the money from the end customer’s account and transfers the amount to the merchant’s account.

Which acquirer you choose depends on which card types you want to offer your customers.

It is important to know that you can only apply for an agreement with an acquirer once your webshop’s checkout/payment flow is fully developed.

NOTE: Please be aware that it can take up to a month for your acquiring agreement to be approved.

Payment solutions with combined gateway and acquirer

There are also payment solutions that combine the payment gateway and the acquirer. In that case, you do not need two agreements—only one. The agreement is either billed monthly or per transaction, depending on the combined provider you choose.

Payment solutions with special functionality

There are payment solutions that, in addition to standard card payments, also offer other features. These are listed below.

Subscription payments

Subscription payments mean that customers can sign up for a subscription where they pay a fixed amount regularly—typically monthly or annually. This could, for example, be a membership like champagneforalle.dk, a subscription to a software service like https://morningscore.io, or access to specific content in your webshop.

Subscription payments enable your webshop to create stable and predictable revenue. We also see that it typically helps your business increase customer loyalty, as you have regular interactions with your customers.

Fast checkout with saved card and customer details

NETS Easy stores customer and card details across webshops that use it. This makes it possible to implement fast checkout for the customer if they have shopped in another webshop using NETS Easy.

Mobile payments

Most payment gateways support mobile payments via, for example, MobilePay. Other mobile payment solutions may include Google Pay or Apple Pay.

We are seeing increased demand for these, so this is an important consideration when choosing a payment solution.

Installment payments

Klarna is an example of a payment solution where customers can choose to pay for their purchase in installments over a set period instead of paying the full amount at once. This allows customers to buy larger or more expensive items that they otherwise could not afford to pay for immediately, or where it does not make sense to pay the full amount upfront.

To use Klarna’s installment payments, customers must first approve a credit assessment and provide their personal information. The customer can then choose to pay for their purchase in installments in the webshop, where they will be shown the total price and the customer’s monthly installments.

Klarna then sends the customer an invoice with the installment terms, which the customer must pay.

Considerations when choosing a payment solution

Features

Some payment solutions handle subscription payments smoothly, while others are a bit meh.

Pricing

With some payment solutions you pay a fee per transaction; with others you pay a fixed price; and other solutions take XX% of sales.

Order volume and your average order value should be decisive in which solution you choose.

Integration with the webshop

Shopify, Magento, WooCommerce, Joomla, Dynamicweb, Ucommerce—there are countless webshop platforms, and payment solutions have often been very selective about which platforms they have prioritized developing extensions or plugins for, making it easy to integrate the payment solution.

Read our post “Shopify Pro vs. WooCommerce” and see our comparison of the two systems.

Options in the payment solution

It varies which cards you can pay with and/or other payment options (PayPal, Apple Pay, MobilePay, etc.).

You should also look at what the payment solution admin panel looks like—what options you have there for capturing and refunding money, and generally managing your account.

You should also consider how “developer-friendly” your payment solution is—for example, how well documented their API is, and whether they have a good “sandbox” environment where you can safely test things. This is almost the sole reason Stripe has become so popular.

Which WooCommerce payment solutions are available?

We often receive questions about WooCommerce compatibility, so I would like to address this area.

There are several Danish and international payment gateways that can be integrated with a WooCommerce webshop. Some of the most popular include:

QuickPay

A popular Danish payment gateway that enables you to accept credit and debit card payments as well as invoice and subscription payments.

Nets Easy

One of the most widely used payment methods in Denmark, enabling you to accept credit and debit card payments, MobilePay, and Betalingsservice.

Epay

A payment solution that enables you to accept credit and debit card payments as well as SMS payments.

PayPal

A global payment solution that is also available in Denmark, allowing customers to pay with their PayPal account or with a credit or debit card.

Stripe

A global payment solution that is also available in Denmark, enabling you to accept credit and debit card payments directly in the webshop.

Bambora

A payment solution that enables you to accept credit and debit card payments, invoice payments, subscription payments, and MobilePay.

Swiipe (Clearhaus)

A payment solution that enables you to accept credit and debit card payments as well as invoice and subscription payments.

Please note that this is only a small selection of the many payment solutions available in Denmark. There are many more options that may be relevant for your webshop. This will depend heavily on which countries you sell your products in, your industry, and your customers’ preferences. It is important that you explore the different options and choose the one that best fits your business. You are always welcome to contact us if you would like advice during this process.

If you would like to see a complete list of payment solutions and acquirers, take a look at kortgebyr.dk.

What should you pay attention to when choosing?

When choosing a payment solution for your webshop, there are several things you should pay attention to:

1 – Security

It is important to choose a payment solution that is secure and protects both customers’ and the company’s sensitive information.

2 – Compatibility

Make sure the payment solution is compatible with your webshop platform and any other systems, such as ERP or CRM. An advantage is that most providers have already developed modules or plugins that can integrate your webshop with the payment solution. Most Danish payment solutions state whether they have a plugin developed for WooCommerce.

3 – Fees

Find out which fees are associated with the payment solution, such as transaction fees, monthly subscription fees, or account setup fees. You can get a quick overview at kortgebyr.dk.

4 – Currency

Make sure the payment solution supports the currencies you want to accept payments in on your webshop.

5 – Customer experience

Consider how the payment solution affects the customer’s shopping experience in your webshop. Some solutions make the payment flow part of your webshop, while others redirect the customer to a different URL address. Choose a solution that is easy to use and gives customers confidence when paying. You can also run split testing to see whether it changes your conversion rate depending on which solution you use.

6 – Subscription payments

If your webshop offers subscription payments, make sure to choose a payment solution that supports this.

7 – Payment methods

Choose a payment solution that supports the most popular payment methods, such as Dankort, credit and debit cards, bank transfers, mobile payments, and installment payments.

8 – Support

Choose a payment solution that provides good support. If you choose a Danish payment solution, you can typically also get Danish-language support, which is a major advantage. They are usually good at helping if issues arise with payments.

9 – Dashboard features

Many new payment solutions come with a dashboard that gives you a quick overview of your receivables, refunds, and orders. This can provide an exceptionally good overview of your webshop’s finances.

Which solution(s) would we recommend?

As a development agency, it is important for us to advise our customers on the most suitable payment solutions for their specific business needs. Therefore, we recommend that you explore several different payment solutions and compare their prices, fees, and functionality against your business requirements.

We have good experience with payment solutions such as Bambora, Quickpay, Nets Easy, Stripe, Pensopay, and Reepay. When we integrate with these payment solutions, we are in close dialogue with the specific provider, which means we have the necessary knowledge and experience to advise our customers on their specific integrations. This applies to integrations with WooCommerce, Laravel solutions, and custom WordPress solutions.

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Niclas Johansen

Managing Director – Development, CTO & Partner

[email protected]

+45 42 90 84 28