Accepting online payments

Payment Gateways

A payment gateway is required in order to accept credit card payments on your online store. It connects all participants in a transaction together and facilitates the online payment.

Merchant Accounts

For some payments gateways you will be required to set up a merchant account for receiving money with your bank. A merchant account is a type of business bank account that allows a business to accept and process electronic payment card transactions.

Merchant accounts require a business to partner with a merchant acquiring bank who facilitates all communications in an electronic payment transaction. This process can take a while and will require you to show your website before finalising so that they can ensure you have met the legal criteria for the account.

There are some payment gateways such as Paypal and Stripe that include a merchant account and therefore do not require you setting one up with your bank. Keep in mind this can mean there is a delay of a few days or more before the funds reach your own bank account. You should also take the time to compare the fees when selecting these options.

Hosted Vs Integrated

A gateway can either be hosted by the provider (customer checks out their shopping cart, is redirected to another website, types in their credit card details) or integrated with the merchant (no redirect necessary). For most small businesses who are starting out I highly recommend you start with a hosted solution, this way you can take advantage of the security measures put in place by that gateway on their own platform. If you plan to use an integrated method you should choose reliable providers and ensure your security measures on your website meet high standards.

Are there fees involved?
Yes. There are a few fees that you should be aware of when considering offering credit card payments online. You will be charged a merchant service fee (MSF), which is typically a percentage of the transaction value (anywhere from 1-4%, but typically around the 2-3% mark for a startup business in a low-risk category). You may also be charged a set fee for each transaction often around 0.30c. There may also a setup fee when first starting with the service.

Choosing payment methods

The top online payment methods in New Zealand include credit card, bank transfer and payment gateways. It’s important to provide your (potential) customers with payment methods of their preference, not supporting common payment methods in a given market will immediately exclude a certain proportion of that market. In many cases, if online shoppers can’t find their preferred or trusted methods of payment during checkout, they will abandon the shopping cart entirely.

Many of the  main NZ banks often have a branded payment gateway offering of their own (e.g. BNZ Buy-line+ or ANZ eGate). However, this is usually the same system as one of the main payment gateway providers, but rebranded to look like the bank’s own service.

Ideally your chosen provider will support a variety of payment brands (Visa, Mastercard, Apple Pay, Q Card, Account2Account, to name a few) and integrate with you chosen website CMS (content management system)

Some Common Payment Gateways Include:

  1.  Woocommerce Payments
    Built by WooCommerce, for WooCommerce. Securely accept major credit and debit cards, and local payment methods on your site with no setup costs or monthly fees. Ideal if you have a physical presence as well as an eCommerce site due to their integrated EFTPOS solutions.
  2. Paystation
    A TradeMe company. Offers both hosted and integrated payment gateway options.
  3. Windcave (formerly Payment Express)
    A common choice throughout the New Zealand, supporting a variety of payment brands (Visa, Mastercard, Apple Pay, Q Card, Account2Account, to name a few) and integrating with all major e-commerce platforms. They also offer instore
  4. Stripe
    Millions of businesses of all sizes – from startups to large enterprises – use Stripe. Easy to set up it does not require a merchant account with your bank.
  5. PayPal
    Getting set up on PayPal is also relatively simple, hence its popularity.  PayPal has not always been well trusted within the New Zealand market but is gaining in popularity now. You do not need a merchant account with your bank to use Paypal.

Common Buy Now Pay Later Payment Options:

  1. AfterPay
    Allows you to ‘Buy what you want today, pay for it in four equal instalments, interest-free.’
  2. Humm
    Buy now pay later with two different packages one for little one for big both with their own criteria.
  1. Genoapay
    Pay 10% upfront and the rest in 9 weekly automatic payments.
  2. Ziip (previously PartPay)
    As with AfterPay, you make a purchase and then pay it off over 4 equal instalments without incurring interest.
  3. Laybuy
    Hassle Free, Interest-Free. Get What You Want Today And Pay It In 6 Weekly Instalments. Get What You Want Today With Laybuy. Pay It In 6 Interest-Free Instalments.