Guide to Zero Fee Transaction and Payment Platforms

In an era where every percentage point affects the bottom line, choosing the right payment gateway is crucial for businesses.

While numerous platforms offer varied features and pricing structures, the quest for zero fee transaction and payment gateways has intensified, with businesses seeking solutions that do not eat into their hard-won margins.

With so many payment platforms to choose from - Mural, Wise, Payoneer, Stripe, PayPal, and Stax, among others, deciding which platform is right for you can become overwhelming very quickly.

What is a payment gateway

A payment gateway is a technology that enables online transactions by securely transferring funds from a customer's bank account or credit card to the merchant's account. It acts as a bridge between the customer, the merchant, and the financial institutions involved in the transaction.

Payment gateways encrypt sensitive data, such as credit card details, to ensure that it is transmitted securely over the internet. They play a vital role in protecting the privacy and security of both buyers and sellers during online transactions.

The process of using a payment gateway begins when a customer initiates a purchase on an e-commerce website. The gateway securely collects the customer's payment information and sends it to the acquiring bank, which then communicates with the issuing bank to authorize the transaction. Once approved, the funds are transferred from the customer's account to the merchant's account, completing the transaction.

Payment gateways provide a seamless and convenient way for businesses to accept online payments, enabling them to reach a wider customer base and increase their revenue. They are an essential component of any e-commerce operation and have revolutionized the way we conduct online transactions.

How does a payment gateway work

To understand how a payment gateway works, let's break down the process into simple steps:

1. Customer initiates a purchase: When a customer decides to make a purchase on an e-commerce website, they add the desired items to their cart and proceed to the checkout page.

2. Customer provides payment information: At the checkout page, the customer is prompted to enter their payment information, including credit card details or other preferred payment methods.

3. Encryption and tokenization: The payment gateway encrypts the customer's payment information to ensure its security during transmission. In some cases, tokenization may be used, where the sensitive data is replaced with a unique identifier known as a token.

4. Data transmission: The encrypted payment information is sent from the customer's device to the payment gateway securely over the internet.

5. Authorization request: The payment gateway receives the encrypted payment information and sends it to the acquiring bank, which acts as an intermediary between the merchant and the customer's bank.

6. Bank authentication: The acquiring bank communicates with the customer's bank, also known as the issuing bank, to authenticate the transaction and check if the customer has sufficient funds or available credit.

7. Transaction approval: If the transaction is approved, the acquiring bank sends an authorization code to the payment gateway, indicating that the customer's payment has been accepted.

8. Funds transfer: The payment gateway transfers the funds from the customer's bank account or credit card to the merchant's account, completing the transaction.

9. Confirmation and receipt: The payment gateway sends a confirmation message to the customer and the merchant, providing them with a receipt or proof of payment.

By following these steps, payment gateways ensure the secure transfer of funds and facilitate smooth online transactions for both buyers and sellers.

Different types of payment gateways

Payment gateways come in various types, each with its own features and functionality. Let's explore some of the common types of payment gateways:

1. Hosted payment gateways: In a hosted payment gateway, the customer is redirected to a secure payment page hosted by the gateway provider. Here, the customer enters their payment information, and the gateway handles the entire transaction process. This type of gateway is easy to set up and maintain, making it a popular choice for small businesses.

2. Self-hosted payment gateways: With a self-hosted payment gateway, the customer stays on the merchant's website throughout the entire transaction process. The merchant is responsible for the security and maintenance of the payment page, making it a more flexible option for businesses with technical expertise.

3. API payment gateways: API (Application Programming Interface) payment gateways allow for seamless integration into the merchant's website or mobile app. They provide developers with the necessary tools and resources to customize the payment experience and have full control over the user interface. API gateways are ideal for businesses that require a high level of customization and control.

4. Mobile payment gateways: As the name suggests, mobile payment gateways are specifically designed for transactions conducted on mobile devices. They offer a simplified and streamlined payment process optimized for smaller screens, providing a seamless mobile shopping experience.

5. Virtual terminal gateways: Virtual terminal gateways enable businesses to accept payments over the phone or by mail order. Merchants can manually enter the customer's payment information into a secure online portal, which then processes the transaction. This type of gateway is commonly used by businesses that operate in industries where face-to-face transactions are not feasible.

Each type of payment gateway has its own advantages and considerations. It's important to evaluate your business needs and choose the one that best aligns with your requirements and goals.

Factors to consider when choosing a payment gateway

When selecting a payment gateway for your business, there are several key factors to consider.

Let's explore these factors in more detail:

1. Security measures: The security of your customers' payment information should be a top priority. Look for payment gateways that offer robust security features, such as encryption, tokenization, and fraud detection mechanisms. Additionally, ensure that the gateway is compliant with industry standards, such as the Payment Card Industry Data Security Standard (PCI DSS).

2. Supported currencies and payment methods: Consider the currencies and payment methods that your target audience uses. Ensure that the payment gateway supports the currencies and payment methods relevant to your customer base to avoid any inconvenience or limitations.

3. Integration options: Check if the payment gateway integrates seamlessly with your e-commerce platform or website. Look for plugins, APIs, or developer resources that make the integration process smooth and hassle-free.

4. Transaction fees: Compare the transaction fees charged by different payment gateways. Take into account factors such as setup fees, monthly fees, per-transaction fees, and any additional charges for international transactions. Consider your expected transaction volume and the impact of fees on your profitability.

5. Customer support: Look for payment gateways that offer reliable and responsive customer support. In case of any technical issues or questions, it's crucial to have access to timely assistance to ensure minimal disruption to your business operations.

By considering these factors, you can narrow down your options and choose a payment gateway that best suits your business requirements.

The High Cost of Transaction Fees

Most payment gateways impose fees that can significantly impact the profit margins of businesses, especially those with thin margins or high transaction volumes.

These costs can come in various forms:

• Percentage-based fees: Typically ranging from 1.9% to 2.9% per transaction.

• Fixed transaction fees: Often an additional 30 cents on top of the percentage fee.

• Monthly subscription fees: Depending on the provider, this can vary significantly.

These fees can quickly accumulate, particularly for businesses that handle a large number of transactions, thereby reducing the overall profitability.

For example, a 2.9% fee on a $50,000 transaction is $1,450 - enough to buy a return flight from Sydney to London and back. These are not insignificant sums.

The Appeal of Zero Fee Transaction Gateways

Zero fee transaction gateways are incredibly appealing for obvious reasons:

• Cost savings: They eliminate the direct costs associated with each sale.

• Simplified accounting: Less complexity in tracking and reporting financials.

• Improved profitability: More of the revenue generated from sales goes directly to the bottom line.

Common Challenges with Zero Fee Gateways

While the idea of zero transaction fees is appealing, it often comes with caveats:

• Limited features: Some gateways might cut back on features like customer support or customization options.

• Higher monthly subscriptions: Some providers compensate for the lack of transaction fees with higher monthly costs. For example, Stax operates with a subscription model and while they don’t impose transaction fees, they charge a flat monthly fee starting at $99 per month.

• Restrictions on transaction volume or type: There may be limits to the number or type of transactions you can process without fees.

Mural: A Superior Solution in Zero Fee Payment Processing

Amidst the crowded field of payment gateways, Mural stands tall.

Designed with the specific needs of freelancers and small businesses in mind, Mural offers a compelling mix of features with an economically advantageous approach:

• Truly Zero Transaction Fees: Unlike many competitors, Mural does not impose transaction fees on in-platform transfers, helping businesses retain more of their revenue.

• Comprehensive Feature Set: Despite its cost-efficiency, Mural does not skimp on functionalities, offering everything from invoicing and automated reminders to extensive reporting tools.

• Robust Security: Mural employs state-of-the-art security measures to ensure that all transactions are processed securely, giving both businesses and their customers peace of mind.

• Seamless Integration: Mural integrates effortlessly with existing business software, enhancing rather than disrupting established workflows.

• Support for Multiple Currencies and Payment Methods: This makes Mural an excellent choice for businesses looking to expand globally without incurring additional fees. Mural supports numerous global and digital currencies such as USDC.

Conclusion

In the competitive marketplace, finding a payment gateway that aligns with financial goals without compromising on service quality is crucial.

Mural not only meets these criteria but does so in a way that prioritizes the financial health of businesses. For companies tired of sacrificing a slice of their earnings to transaction fees, Mural offers a refreshing, zero-fee alternative that supports sustainable business growth.

Choosing Mural as your payment gateway translates into tangible savings and operational benefits, making it a standout choice in the realm of zero fee transaction payment gateways.