Top 3 Payment Gateway Providers in the Philippines in 2024

The COVID-19 pandemic accelerated by five years the global shift to ecommerce and online payment transactions. To recoup, the two industries proved to be the most resilient among global industries, not only withstanding the pandemic but more than that, booming with it while everything else around it went tumbling down one way or another like the proverbial dominoes.

Unlike cash transactions, payment gateway software can facilitate transactions in the comfort and safety of homes, away from the fatal threat of the coronavirus outside.

Needless to say, getting the right payment gateway is crucial. In this guide, we narrow down the list to three providers based on the requirements of companies in the Philippines with a digital and global business outlook.

In 2020, the digital commerce and mobile POS payments adoption rates in the Philippines stood at 35.5% and 20.8% respectively. Total transaction values were at $8.671 billion for digital commerce (down from $10.795 billion in 2019) and $2.185 billion for mobile POS payments (up from $1.169 billion in 2019). Meanwhile, the average transaction value per user stood at $223.0 for digital commerce (down from $324.9 in 2019) and $95.7 for mobile POS payments (up from $73.6 in 2019).

In terms of users by age, the majority of digital payment transactions were from the 25-34 years age group (34%) followed by 18-24 years age group (25%) and the 35-44 years age group (24%).

In a Philippine survey by Rakuten Insight, 78% of the respondents say they used an e-payment method for online purchases while 73% used it to pay bills.

Payment gateways are different from payment processors though the two are often confused, as the latter only analyzes and transmits transaction data. Many leading global and regional online payment processors and merchant account services operate in this part of the world, but PayPal remains at the top when it comes to cross-border transactions, accounting for 77% of total transactions. In this article, we will also examine the two other names that make up the top 3 payment gateway providers in the Philippines. 

Top 3 Payment Gateway Providers in the Philippines

There are several local and international online payment services and payment gateway providers in the Philippines that merchants and online vendors can use for their ecommerce business. Three have emerged at the top of the pack for reasons that may be similar elsewhere – reliability, convenience, ease of use, features, customer support, and fees/cost. Everyone, especially online sellers, probably know that the checkout may make or break the crucial customer experience, which is why they would go for proven services. Hence, the following came out as the top 3 payment gateway providers in the Philippines:

1. PayPal

PayPal is an ecommerce service that allows individuals and companies to pay, send money, and accept payments without revealing tons of financial information. The platform uses secure payment technology that enables vendors to accept credit cards, debit cards, and PayPal payments for a percentage transaction fee. With multi-channel capability, merchants can accept payments on their website, on their mobile device, in-app, in-store, or send an invoice to customers via email.

Since its establishment in 1999, it has grown into a global online payment system that supports the convenient transfer of funds electronically between individuals and businesses. Because it’s a safe, fast, and reliable platform, Paypal is considered as one of the most popular electronic payment platforms for online sellers and customers alike. It functions both as payment gateway and merchant account, accepts 26 different currencies, and has a global presence in over 200 countries and markets. 

How It Works

The PayPal platform comes in three distinct account categories that do not require any fee when signing up. A personal account allows any online shopper to pay for items they bought online via credit card. A business account is designed for business owners, which would enable them to accept all types of payments. Among the reasons why PayPal is widely popular is that it allows users to send payments to overseas sellers with an email address in an instant. Moreover, it offers secure online shopping, even on mobile devices. It’s as simple as logging in with your PayPal credentials and executing the operation in a few seconds.

2. AsiaPay (PesoPay)

The Philippine office of AsiaPay was the first overseas branch opened after AsiaPay’s headquarters in Hong Kong was inaugurated in 2006. It has since become a leading provider of electronic payment services all over Asia, utilizing an extensive collection of reliable and secure payment processing technology for credit cards and various other payment methods. It caters to various types and sizes of businesses, from small enterprises to call center agencies and financial institutions.

In 2008, AsiaPay Philippines rebranded its payment gateway into PesoPay, named after the country’s currency. PesoPay aimed to provide a one-stop platform for merchants to have more ways of accepting payments online without manually integrating with each payment method. With this goal in mind, AsiaPay Philippines expanded its range of services by integrating with leading local payment services such as BancNet for ATM debit cards, GCash and Smart Money for e-wallet payments, and PayCash, a cash-based payment processing service that allows those without bank accounts to pay online.

How It Works

PesoPay is similar to other payment gateways as its payment system can easily be integrated with your ecommerce website or shopping platforms such as Magento, Opencart, Commerce Kickstart, LiteCommerce, Virtue Mart, WooCommerce, PrestaShop, Zen Cart, and osCommerce. It accepts payments via credit cards like Visa, Mastercard and JCB. It likewise facilitates online bank transfer payments, over-the-counter payments through local banks, payment through non-bank partners, such as pawnshops, as well as PayPal. Included among its fees are an annual setup charge, a transaction commission based on payments received, and a chargeback handling fee. It does not require a deposit when you apply for the service and provides 24/7 technical support.

3. Dragonpay

Dragonpay was launched in 2010 as an alternative online payment solution for businesses of all sizes. Through its gateway, customers can purchase goods or services online and pay for them using cash or check at physical payment counters, ATMs, mobile wallets, or online bank debit. Since developing countries like the Philippines have very low credit card penetration, Dragonpay’s offerings provide a viable payment option for ecommerce sites in the Philippines. At present, hundreds of online merchants use the Dragonpay platform for such businesses as retail, travel, daily deals, and online stores.

Dragonpay enables online shoppers to buy from ecommerce sites using online banking systems. It also serves as a substitute payment system for those who are not credit card holders or don’t have PayPal accounts. Customers are given the option to use online banking facilities or over-the-counter payment at physical retail channels. The platform automatically monitors both online and offline payment transactions and notifies merchants if a payment has been made.

How It Works

Once customers choose and checkout items online, they will receive a reference number so they can pay through their preferred bank. Once bills are paid, Dragonpay will send an email notification to the merchant to let them know of the transaction details and other information. Dragonpay acts as a third-party facilitator for smooth payment transactions. Dragonpay can be integrated into an ecommerce site and provides customers the option to pay online via banks or PayPal or over the counter through 10 partner banks and payment centers. Fees include a one-time setup fee of Php 28,000 ($633); and per payment fee of Php 10 ($0.23) for online banking payments; Php 15 ($0.34) for over-the-counter payments; and Php 20 ($0.45) for payments done at non-bank partners. Merchants selling items for Php 200 ($4.52) and below can opt to avail of the micro-payment plan, where the charge is 5% of the total transaction.

What are the fees associated with payment gateways?

Understanding the fees associated with payment gateways is crucial for any business owner. These fees can significantly impact your bottom line, so knowing what to expect is essential. Here are the common types of fees you might encounter:

• Transaction Fees: Most payment gateways charge a fee for each transaction processed. This fee typically ranges from 1.5% to 3.5% of the transaction amount. Some providers may also have a flat fee per transaction, such as $0.30.
• Monthly Fees: Some payment gateways charge a monthly service fee, depending on the provider and the features offered. This fee can be a flat rate or based on transaction volume.
• Setup Fees: While many gateways have eliminated setup fees, some may still charge an initial fee to set up your account. This can include costs for custom integrations or advanced features.
• Refund Fees: If a customer requests a refund, you might incur a fee for processing that refund, depending on the gateway’s policies. This fee may vary from one provider to another.
• Chargeback Fees: In the event of a chargeback, when a customer disputes a transaction, payment gateways often charge a fee. This can be significant, so managing your transactions carefully is vital.
• International Transaction Fees: Some gateways charge additional fees for currency conversion or international transactions if you process payments in multiple currencies or from international customers.
• Payment Method Fees: Different payment methods may have varying fees. For instance, credit card transactions might incur charges different from those of digital wallets.

Which Payment Gateway Provider Should You Use in the Philippines?

Although several of the current crops of payment gateway providers offer a range of services that cater to all types and sizes of businesses, there are other factors that you have to look into. These include the type of setup (going for one that also handles merchant accounts), speed in completing transactions, encryption standards, and security features, UI and easy navigation, reporting functionality, customer support, and cost and fees. No two services are made alike, and there will always be differences. It is critical for you to go through their features and offerings to see if they closely match your business requirements. 

Currently, though, PayPal remains supreme not just in the Philippines but also worldwide. Its popularity does have something to do with name recognition, but that is not all. The solution has tight security features, which ensure that every transaction is safe. PayPal also safeguards stringently the financial data of users as well as their login credentials. What is more, PayPal has numerous partners worldwide, making it easier for businesses and consumers to make transactions in international markets.

Meanwhile, if you are interested in adding a payment gateway to your ecommerce site, you can do payment gateway integration in PHP, Java, and C#. You can also get yourself acquainted with the payment gateway implementation process for you to make sure that everything goes smoothly.

Key Insights

• Growth of Digital Commerce in the Philippines: The COVID-19 pandemic accelerated the shift to ecommerce and online payments globally, including the Philippines. In 2020, the digital commerce transaction value in the Philippines was $8.671 billion, and mobile POS payments were $2.185 billion.
• Age Group Usage: The majority of digital payment transactions in the Philippines were from the 25-34 age group (34%), followed by the 18-24 age group (25%), and the 35-44 age group (24%).
• Top Payment Gateway Providers:
  • PayPal: Known for its global presence, reliability, and strong security features. It supports 26 different currencies and operates in over 200 countries.
  • AsiaPay (PesoPay): A leading provider in Asia, offering multiple payment methods including credit cards, online bank transfers, and e-wallets.
  • Dragonpay: An alternative payment solution facilitating transactions through cash, checks, ATMs, mobile wallets, and online banking, making it ideal for areas with low credit card penetration.
• Key Criteria for Choosing a Payment Gateway: Considerations include transaction speed, security features, ease of integration, user interface, reporting functionality, customer support, and cost.

FAQ

1. What is a payment gateway? A payment gateway is a technology that facilitates online transactions by transmitting payment information from the customer to the acquiring bank.
2. How does PayPal work for businesses in the Philippines? PayPal allows businesses to accept payments via credit cards, debit cards, and PayPal accounts. It supports cross-border transactions and provides a secure and reliable platform for online payments.
3. What makes AsiaPay (PesoPay) a top choice in the Philippines? AsiaPay (PesoPay) offers a wide range of payment options, including credit cards, online bank transfers, and e-wallets, making it versatile and convenient for various types of businesses.
4. How does Dragonpay cater to areas with low credit card penetration? Dragonpay provides alternative payment methods such as cash, checks, ATMs, and mobile wallets. It supports over-the-counter payments and online banking, making it accessible for those without credit cards.
5. What are the main benefits of using a payment gateway? Payment gateways offer secure transactions, ease of integration with ecommerce platforms, multiple payment options, real-time transaction processing, and detailed reporting.
6. Are there any setup fees for using these payment gateways? Yes, some payment gateways like Dragonpay have a one-time setup fee. PayPal and AsiaPay may have different fee structures based on the services provided.
7. Which age group is the largest user of digital payments in the Philippines? The 25-34 age group is the largest user of digital payments in the Philippines, accounting for 34% of transactions.
8. What factors should I consider when choosing a payment gateway? Important factors include transaction speed, security features, ease of integration, user interface, reporting capabilities, customer support, and associated costs and fees.
9. Is PayPal popular for cross-border transactions? Yes, PayPal is highly popular for cross-border transactions due to its global presence, multi-currency support, and robust security features.
10. How does the COVID-19 pandemic impact the use of payment gateways? The pandemic accelerated the adoption of ecommerce and online payments, making payment gateways crucial for facilitating safe and convenient transactions from home

By Shaun Baker

With 5 years of experience in digital marketing and retail strategy under his belt, Shaun Baker is the resident eCommerce expert at FinancesOnline. A contributor to Entrepreneur, The Atlantic, and other business portals, he has spoken and written about various eCommerce subjects, from AI and headless commerce to the economics of Black Mirror’s “Fifteen Million Credits”. His (highly) opinionated pieces on the ebbs and flows of eCommerce as an industry remain both a dynamic resource of talking points and entertainment in itself.