What payment gateway should I use?

A payment gateway, when attached to your online store, allows you to accept real time credit card payments and not have to worry about storing credit card details. They're great because you are also freed up from all the security baggage that comes with it. Use of a payment gateway enables you to qualify for adherence to the Payment Card Industry Data Security Standards (PCI DSS), because payment gateways get audited for the PCI DSS, taking the load (and expense) off you.

There are a number of Australian payment gateway solutions, each with their own way of getting to the end result of money in your bank account. There are 3 basic types of payment gateways to consider:

1. Third Party Payment companies (e.g. PayPal, Paymate)
2. Third Party Syndication (e.g. eWAY, SecurePay)
3. Direct to Bank (Westpac, ANZ, St George, NAB, Commonwealth Bank)

The main reason to consider Paypal or Paymate is avoidance of a merchant account. Generally this is good for small stores with low transaction volumes, and people who have a hard time getting approval from banks for their online store idea. They are a more expensive solution though, and take a percentage of the transaction amount. They also have the ability to freeze accounts or force charge backs, and while it is protecting consumers, it must be something to consider for store owners. Australians don't yet have the options of Google Checkout or Amazon payments at the time of writing.

Using a third party syndication company such as eWAY or SecurePay is a good solution and takes the effort away from having to build your own interface to the bank, because they've already done it. Their administration consoles give the full range of services including batch payments, refunds, recurring payments, and exports to accounting systems. They generally have a setup or annual fee, plus a fixed per transaction cost (15 to 50c), depending on the company and your transaction volume on top of merchant costs from the bank.

Direct to bank is the most cost effective solution however, and cuts out the middleman. To do this you must go with one of the big 5 banks in Australia who offer payment gateway products. Each offering generally has all the functions needed (once off, refund, batch, recurring, exports). Going direct to the bank means no unnecessary fee from a syndication company is slapped on top of your merchant fees, and could save you thousands of dollars.