Top 3 Payment Gateway Providers in the Philippines

payment gateway providers are eCommerce services or applications that processes credit card payments for online as well as traditional brick and mortar stores. It is the virtual equivalent of the physical POS terminal that you see in most retail stores when you buy and checkout an item. Payment gateway can facilitate transactions by encrypting sensitive information like credit card numbers, and ensuring that information passes securely between buyer and the seller. Essentially, the main function of a payment gateway is to validate customer’s credit card details, ensure funds are available, authorize payment for online (or offline) business, and get you paid.

Differences: Payment Gateway, Payment Processor & Merchant Account

Payment processors differ from payment gateways as the former analyze and transmit transaction data while the latter authorize the transfer of funds from customer to merchant. Payment gateway is also often mistaken for a merchant account. Although you need both to take online payments, a merchant account is where funds are held before being transferred to your bank while payment gateway is there to approve or decline a transaction. Some examples of payment gateways are Authorize.net, Payment Express and TrustCommerce while more notable full service payment providers that act as both payment gateway and merchant account include Paypal, Braintree and Stripe.

Convenience & Security

If you operate an ecommerce site, a payment gateway is a foremost requirement. It performs a vital function in the ecommerce transaction process. It is one of the most viable, convenient and secured means to pay (for the buyer) and get paid (for the seller). Since it involves payment, providers of this type of service of put in extra security features and protocols to detect fraud and ensure integrity of their systems. Having a reliable payment gateway allows you to provide your customers a dependable service and satisfying customer experience. Easily facilitating payment for your customers will keep them coming back to do business with you. Your business exudes trustworthiness and professionalism. Suffice to say that getting paid properly, accurately and on time will drive the growth and success of your online business. A payment gateway helps you realize that.

In this article we will look into the top 3 payment gateway providers in the Philippines. This country has a robust ecommerce market that is expected to reach $1.2 billion in 2017 with an annual growth rate forecast of 17.3% from 2017 to 2021. Many leading global and regional online payment processors and merchant account services operate in this part of the world and we will explore the top 3 payment gateway providers in the Philippines in the succeeding sections.

Ecommerce & Online Payments: Facts & Figures

For the past two years, global ecommerce has grown big. In fact, it has boomed to the point that Forbes predicts the ecommerce industry will exceed $2 trillion in revenues this 2017. A separate eMarketer report makes an even bolder prediction – that total ecommerce sales will top $4 trillion by 2020, accounting for 14.6% of all consumer retail spending worldwide. A major factor for this industry growth is technology, making it easy to make non-cash transactions, shop online using mobile devices, and to make mobile and online payments.

Credits: Business Insider, U.S. Census Bureau

Here are other interesting facts:

  1. Global non-cash transactions in 2014-2015 grew by 11% reaching more than $433 billion. (World Payments Report)
  2. Card payments increased from 65% in 2014 to 66.2% in 2015. (World Payments Report)
  3. The growing popularity of electronic payments contributed to the decline of check use in 2015, which fell by 13.4%. (World Payments Report)
  4. 47% say they’ve increased the frequency of their online purchases over the last year. (2017 American Express Digital Payments Survey)
  5. 71% of merchants say the proportion of their annual sales generated through online and mobile channels increased over the previous year. (2017 American Express Digital Payments Survey)
  6. 20% of those surveyed are no longer carrying cash and 46% say that they rarely or never use cash. (2017 American Express Digital Payments Survey)
  7. Most preferred payment method: credit card – 40%, debit card – 35%, and cash – 11%. (TSYS 2016 U.S. Consumer Payment Study)

TSYS 2016 U.S. Consumer Payment Study

How Does Payment Gateway Work?

The entire payment gateway process may involve over a dozen steps but for the purpose of getting a clearer understanding, we’ll simplify the procedure into four.

  1. Collection. Your customer places an order from your online store and enters his credit card details into your payment page. The information is then sent to your payment gateway.
  2. Authentication. Your payment gateway receives and takes the information, and sends it via a secured link to your bank account.
  3. Authorization. You will then know if the sale has been approved so you can deliver the ordered products or services.
  4. Settlement. The transaction data is verified by your bank and the money from the sale is deposited into your account.

Note that the time it takes for the actual payment to arrive in your bank account will depend on your payment gateway. It may just be a matter of seconds or real-time, or take as long as 21 working days.

Also, payment gateways perform other functions such as calculating tax amounts as well as screening orders to filter out possible fraud in the transaction. A number of payment gateway fraud detection tools are employed such as address verification checks, computer finger printing technology, velocity pattern analysis, identity morphing detection, and geolocation.

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 knows 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 e-commerce 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 worldwide online payment system that supports convenient transfer of funds electronically between individuals and businesses. Because it’s safe, fast and reliable platform, Paypal is considered one of the most popular e-payment provider 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. According to the latest report, PayPal is currently ranked #1 out of 10 payment technologies in the Philippines and holds an overwhelming 80.7 percent market share in the country.

How It Works

The PayPal platform comes in three distinct account categories that do not require any fee when signing up. Personal account allows for any online shopper to pay for items they bought online via credit card. Premier account caters to people who sell online and would need funds deposited into their account. Business account is designed for business owners which allow 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, users can buy and sell using their mobile device on any merchant site or mobile app. It’s as simple as logging in with your PayPal credentials and executing the operation in a few seconds.

2. AsiaPay

AsiaPay Philippines was the first was the first overseas office 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 size of businesses, from small enterprises to call center agencies and financial institutions.

In 2008, AsiaPay Philippines rebranded their payment gateway into PesoPay, named after the country’s currency. PesoPay aimed to provide a one-stop platform in order 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 to your ecommerce website or shopping platform 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 set-up 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, ATM’s, mobile wallets or through 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 like retail, travel, daily deals, and online stores.

Dragonpay enables online shoppers to buy from e-commerce sites using online banking systems It also serves as 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 at a bank of his choosing. Once bills are paid, Dragonpay will send an email notification to the merchant to let him know of the transaction details and other information. Dragonpay acts as third party facilitator for smooth payment transaction. Dragonpay can be integrated in 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. Fess include the following: one-time setup fee of Php 28,000 (US$633); and per payment fee of Php 10 (US$0.23) for online banking payments; Php 15 (US$0.34) for over-the-counter payments; and Php 20 (US$0.45) for payments done at non-bank partners. Merchants selling items for Php 200 (US$4.52) and below can opt to avail of the micro-payment plan, where the charge is 5 percent of the total transaction.

Which One is For You?

Although several of the current crop of payment gateway providers offer a range of services that cater to all types and size 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 account), 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 incumbent on your part to go through their features and offerings to see if they closely match your business requirements. Payment gateways play a very important role in your ecommerce business. It is crucial that you make the right decision at the very start.

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