Payment gateway selection gets treated as a minor setup decision. It isn’t. Gateway fees compound on every transaction, and the wrong gateway for your customer base can quietly cost thousands per month in lost sales from shoppers whose preferred payment method you don’t support.
What a Payment Gateway Actually Does
A payment gateway is the service that authorizes and processes credit card and alternative payment transactions on your store. WooCommerce doesn’t process payments — it’s an ecommerce platform that connects to payment gateways to handle money movement.
WooCommerce’s gateway ecosystem is its biggest structural advantage over closed platforms. Any gateway that offers a WooCommerce integration can be connected to your store. That’s over 100 officially listed gateways, plus dozens of regional processors not in the marketplace.
Compare this to Shopify, which uses Shopify Payments as the default (with a fee penalty for using alternatives), or Square, which only integrates with its own gateway. On WooCommerce, no gateway vendor holds pricing leverage over you.
The Major Gateways and What They Actually Cost
Stripe
Standard rate: 2.9% + $0.30 per transaction (US cards) International cards: 2.9% + $0.30 + 1.5% international fee Chargebacks: $15 fee (refunded if you win) Monthly fee: None WooCommerce integration: Native via WooCommerce Stripe Payment Gateway (free)
Stripe is the default recommendation for most WooCommerce stores because the developer experience is best-in-class, the fraud detection (Stripe Radar) is included, Apple Pay and Google Pay support are built in, and the plugin is maintained by WooCommerce itself.
Stripe’s downside is per-transaction cost at high volume. A store processing $500,000/month at 2.9% + $0.30 pays $14,500 in processing fees. At that volume, it’s worth negotiating custom pricing directly with Stripe — they offer it above $500,000/year in processing.
PayPal
PayPal Checkout rate: 3.49% + $0.49 per transaction PayPal Standard/Advanced: 2.99% + $0.49 per transaction Monthly fee: None WooCommerce integration: Official PayPal plugin (free)
PayPal’s rates are higher than Stripe’s. The reason to offer it anyway: 35–40% of US online shoppers prefer to pay with PayPal, particularly for first purchases with unfamiliar brands. Offering PayPal as a secondary gateway alongside Stripe captures sales you’d otherwise lose.
PayPal-only is not a recommended configuration because PayPal’s dispute resolution is worse than Stripe’s, the checkout experience creates more friction (redirect to PayPal.com), and rates are higher.
Dana runs a candle brand on WooCommerce. She originally set up Stripe only. Her checkout completion rate was 2.2%. She added PayPal as a secondary gateway. Checkout completion moved to 2.9%. The 0.7% rate difference between Stripe and PayPal costs her $35/month at her volume — the additional completed orders add approximately $800/month in revenue.
Square
Rate: 2.6% + $0.10 (card-present) / 2.9% + $0.30 (online) WooCommerce integration: Official Square plugin (free, via WooCommerce)
Square’s WooCommerce integration syncs inventory between your online store and any Square POS terminal you use in person. For stores with both physical and online presence, this is a meaningful operational advantage — a sale in-store automatically reduces online inventory.
The integration has a history of sync reliability issues reported by merchants, particularly for variable products. Test thoroughly before relying on it for inventory management.
Authorize.net
Rate: 2.9% + $0.30 per transaction OR $25/month + $0.10/transaction + 2.9% (with subscription plan) Monthly fee: $25 (on subscription plan) WooCommerce integration: Via official plugin
Authorize.net is a legacy processor more common in enterprise and B2B contexts. Its feature set is mature but its UX is dated. The subscription plan with $25/month makes sense only at high volume where the lower per-transaction fee ($0.10 instead of $0.30) more than covers the monthly cost. Break-even: approximately 125 transactions/month.
WooPayments
Rate: 2.9% + $0.30 per transaction (US); additional international fees apply Monthly fee: None WooCommerce integration: Native (built by WooCommerce/Automattic)
WooPayments is WooCommerce’s own gateway, built on Stripe infrastructure. The rates are equivalent to Stripe. The advantage: it integrates most deeply with WooCommerce’s admin interface, showing revenue analytics inside WooCommerce itself. The disadvantage: it’s a newer product with less historical reliability data than Stripe.
For stores that want everything in one place and are comfortable with a newer service, WooPayments is viable. For stores that prioritize gateway reliability and developer support, Stripe directly is the more proven option.
Alternative Payment Methods: What You’re Losing by Not Offering Them
Credit cards and PayPal cover most US shoppers. But alternative payment methods matter more than most store owners realize:
Buy Now Pay Later (BNPL): Klarna, Afterpay, and Affirm have grown from niche to mainstream since 2020. 43% of US shoppers have used a BNPL service (LendingTree, 2023). For higher-ticket items ($100+), offering BNPL typically increases average order value 20–30% because shoppers who can’t afford a single payment can afford installments.
Apple Pay / Google Pay: Now available on 70%+ of mobile devices in the US. One-tap checkout — no card number entry, no billing address form — eliminates the single biggest mobile checkout friction point. Stripe and WooPayments both support these natively at no additional cost.
ACH/Bank Transfer: For B2B or large-ticket purchases, ACH transfers are cheaper than card processing (typically 0.5–0.8% capped at $5) and preferred by buyers who don’t want to run large amounts through corporate credit cards.
Our custom WooCommerce builds include payment gateway setup and testing as part of the project scope — not an afterthought.
International Selling: Where Gateway Selection Becomes Critical
If your store serves international customers, gateway selection becomes a market-by-market question. European shoppers have strong preferences for regional methods that US-centric gateways don’t support:
- Germany: SOFORT, SEPA Direct Debit, Giropay
- Netherlands: iDEAL (used in 60%+ of Dutch online transactions)
- Poland: BLIK, Przelewy24
- Brazil: Boleto Bancário, PIX
Stripe supports many European payment methods natively. For complex international requirements, Adyen or Mollie (popular in Europe) may be better suited.
If you’re selling primarily in one country outside the US, research the dominant payment methods in that market before selecting a gateway.
Ryan expanded his WooCommerce outdoor gear store to Germany. He was running Stripe-only. German conversion rates were 0.8% against his US rate of 2.4%. After adding SOFORT and SEPA payment options through Stripe’s European payment methods, German conversion moved to 1.9% within 60 days.
How to Configure Multiple Gateways on WooCommerce
WooCommerce supports multiple active payment gateways simultaneously. Shoppers see a payment method selector at checkout. The recommended configuration for a US store:
- Primary: Stripe (credit/debit cards, Apple Pay, Google Pay)
- Secondary: PayPal (for shoppers who prefer it)
- Optional: Klarna or Afterpay (for stores with average order values above $80)
The order in which gateways appear at checkout can be configured in WooCommerce → Settings → Payments. Put the gateway used by the majority of your shoppers first — typically Stripe or WooPayments.
If you want to audit your current payment setup before making changes, Honest includes an ecommerce audit that covers payment configuration.
Check our fixed-price WooCommerce packages to see what’s included in our standard store setups, including payment gateway integration.
FAQ
Which payment gateway should I use for a new WooCommerce store? For most US stores: Stripe as primary, PayPal as secondary. Stripe has the best developer integration, competitive rates, and built-in Apple Pay/Google Pay support. PayPal as secondary captures shoppers who prefer it, which is 35–40% of US online buyers.
Does WooCommerce have its own payment processing? WooPayments, built by Automattic (WooCommerce’s parent company), is WooCommerce’s native payment solution. It runs on Stripe’s infrastructure. Rates match Stripe’s standard rates. It’s a legitimate option, particularly for merchants who want payment analytics inside the WooCommerce dashboard.
What is the cheapest payment gateway for WooCommerce? On a per-transaction basis, ACH/bank transfer gateways (0.5–0.8% capped at $5) are cheapest for large transactions. For standard card processing, rates are competitive across Stripe, Square, and WooPayments at 2.9% + $0.30 for card-not-present transactions. Authorize.net’s subscription plan is cheaper per transaction at high volume ($0.10 vs $0.30) but adds a $25/month fee.
Can I use multiple payment gateways at the same time on WooCommerce? Yes. WooCommerce supports multiple simultaneously active gateways. Customers choose their preferred method at checkout. This is one of WooCommerce’s structural advantages — closed platforms like Shopify charge extra fees for using non-preferred gateways.
How do WooCommerce payment gateway fees compare to Shopify’s? On WooCommerce, you pay only your gateway’s processing rates. On Shopify, you pay your gateway’s rates plus Shopify’s transaction fee (0.5%–2% depending on plan) unless you use Shopify Payments. At $100,000/month revenue on Shopify Standard, the 1% Shopify fee adds $1,000/month — $12,000/year — that WooCommerce merchants don’t pay.