With so many payment gateways to choose from, how do you know you’re picking the right one for your business? It’s an especially important decision considering it’s going to impact so many aspects of your business.

If you’re not too familiar with how online payments work, here’s a quick summary to get you up to speed. This will help you make the most informed decision when selecting your payment gateway.

For this example, we’re going to take a look at how Sally books a kayaking tour with Bob’s Kayaking Tours.

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Processing online payments is a two-stage process

1. Authorization

  • Sally books a $50 tour with Bob’s Kayaking Tours using her credit card.
  • Sally’s credit card information goes through Bob’s payment gateway. The payment gateway encrypts the information before sending it through the payment processor eg. Visa, Mastercard, ensuring her credit card information is safe and secure.
  • The payment processor sends a request to Sally’s bank for the $50 for Bob’s Kayaking Tour.
  • Her bank approves the request. (Note, the bank can deny the request for various reasons eg, a frozen bank account or incorrect credit card details.
  • Once approved, the payment processor tells Sally and Bob the payment is approved and the amount is credited from Sally’s account.

This process takes 1-2 seconds.

2. Settlement

  • Sally’s $50 is sent to Bob’s merchant bank, which deposits the money into Bob’s account.
  • The $50 then becomes available in Bob’s account. Although sometimes a portion can’t be touched, just in case Sally cancels the booking.

This process takes a few days.

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Why is choosing a payment gateway so important?

Contrary to popular belief, not all payment gateways are created equal. They all come with different features that’ll greatly affect your business.

For example, some payment gateways come with Mobile wallets like Apple Pay and Google Pay. Mobile wallets offer faster processing, better security, and a better user experience. They are expected to become the preferred method of payment in the world by 2025. In fact, companies have seen mobile conversion rates increase by as much as 20% just from implementing Apple Pay. Meaning you’ll definitely want to choose a payment gateway that supports mobile wallets.

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10 questions to ask when deciding which payment gateway to use

Wondering how to choose the right payment gateway for your travel and activity business? To help you make the best decision, here are 10 key areas you need to consider when choosing a payment gateway.

1. How much does the payment gateway cost?

It’s no surprise that this is one of the largest factors when choosing a payment gateway.  A typical payment gateway fee for example would be 2.9% of your transaction + 30 cents.

A big factor that affects the pricing and fees of each payment gateway:
Where you’re based and where your customers are based.

For example, with RezdyPay, Bob pays 1.45% + 30 cents when someone makes a domestic transaction. However, if someone makes a transaction from the US, Bob will need to pay 2.9% + 30 cents. Here’s what Bob would pay depending on where Sally is from when she booked the $50 tour:

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Total Transaction ($)Region of bookingRateCost to Bob ($)
50Domestic1.45% + 30 cents1.025
50International2.9% + 30 cents1.75
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At first glance, they may not seem too expensive, but as your business grows, they add up. For example, if an international visitor booked a $500 tour with Bob, Bob would need to pay $14.80 for that single transaction. What this means is every single percentage counts. 

Our Advice:

Do your research and find out which payment gateways offer the best rates for your country, and for your main customer segment.  Your payment gateway choice could differ greatly depending on where your customers are from. Here’s an example:

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Payment Gateway XRate
Payment Gateway YRate

Imagine Bob made $10,000 in revenue every month. Here’s how much he would pay to each payment gateway depending on whether his customers are domestic or international.

Payment GatewayDomestic Bookings ($)International Bookings ($)Total Fee
Payment Gateway X80002000$178
Payment Gateway Y80002000$210
Payment GatewayDomestic Bookings ($)International Bookings ($)Total Fee
Payment Gateway X20008000$262
Payment Gateway Y20008000$240

Notice how Payment Gateway X is the better deal when Bob has mostly domestic customers and Payment Gateway Y is better, vice-versa.

Need some help? Our team is happy to take you through the different rates available with our payment gateway providers.

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2. How secure is the payment gateway?

The next thing you need to consider is the security of your payment gateway. Has the payment gateway had any security breaches in its history? The last thing you’d want is a breach of your customers’ data. Ensure that your payment gateway is:

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PCI Compliant

In addition to a payment gateway’s clean history, you should also ensure that it’s PCI Compliant. This is the Payment Card Industry Security Standards. It’s pretty much a set of best practices developed by a forum of global brands like Mastercard, Visa and American express. In short, it effectively keeps your customer data safe.


SCA Compliant

If you’re in Europe, there are a new set of requirements known as Strong Customer Authentication that will impact on online payments when banks of both the operator and card holder are European. These requirements are expected to be enforced over the course of 2020 and 2021. The main takeaway here is that you select a payment gateway that is SCA compliant.

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3. Does the gateway offer a white-label experience?

Are you able to customize the payment gateway page to match your own website? Imagine that Sally was booking a tour on Bob’s Kayaking Tours and is redirected to a page called ipayments.net which looks nothing like the website she was on. If you were Sally, how would you feel? You’d think it was unsafe, sketchy, etc. And you’d likely close the webpage.

Our Advice

The best way to increase conversions is to ensure the entire booking journey has a smooth flow from start to finish. So choose a payment gateway which allows for a white-label experience. Customize the payment gateway page to resemble your website as closely as possible.

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4. Is the payment gateway easy to use?

When we say ease of use, we mean for both you and the customer.  Here are some features that make it easier for the customer to check out:


Guest Checkout

Some payment gateways require your customers to create an account to finalize their payment. This can be a huge hassle and is where plenty of customers drop-off. Guest checkout allows your customers to check out without needing to sign-up, making the process as fast and frictionless as possible for your customer.


Device Compatibility

Plenty of customers now make payments on mobile and tablet. In fact, in the US, 51% of customers online make payments through mobile vs desktop. So you want to ensure that your payment gateway will work across a range of devices.


Customizable Forms

Your payment gateway should also allow you to remove unwanted or irrelevant form fields. For example, since you provide tours, shipping information is completely unnecessary. Removing these irrelevant fields makes the process quicker and easier for the customer.

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Here are some features that would make it easier for you:


Ease of setting up or migrating

Does it integrate easily with your booking software solution? How easy is it to set-up and get approved? How easy is it to migrate from your current payment gateway? This may be a one-time thing, but it can still be a huge hassle. Especially if you’ve peak season coming up soon!


Dashboards And Reporting

How easy is it for you to navigate through the system and find what you’re looking for? How effective are the reports? You’re going to want something that’ll show you everything you need to know at a glance, as well as filters that’ll let you easily dig deeper into the data.

Our Advice:

Make a list of the things that are important to you and your customer. Check off each item to find the payment gateway that suits your needs best.

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5. Does the payment gateway support mobile devices?

Plenty of customers now make payments on mobile and tablets – especially in the travel and tourism industries, where people are always on the go. In fact, in the US, 51% of customers online make payments through mobile vs desktop. So you want to ensure that your payment gateway will work across a range of mobile devices including phones, tablets, and laptops.

A mobile booking app can further support your business when managing those last minute bookings that are a by-product of more customers booking on mobile devices.

6. Does the payment gateway support multiple currencies?

If your business’s customer base is international, you’ll want to find a payment gateway that supports multiple currencies. Your customers will most likely want to pay in their own currency so it is extremely important that you utilize a payment and booking software that allows them to pay with ease.

Our advice

In addition to checking whether the payment gateway supports multiple currencies, you’ll also need to confirm the fees associated with foreign currency transactions.

7. What kinds of cards/payment methods does the gateway accept?

The most popular cards used for online transactions are MasterCard, Visa, and American Express. Almost all payment gateways accept these three credit cards, but you should also confirm what other cards or payment methods that the gateway accepts. If your customers commonly use a specific card to complete their bookings, you’ll need to ensure that the gateway you choose streamlines their payment process by accepting their chosen payment method.

Our advice

Some countries use different payment methods or credit cards. If your customer base is primarily made up of people from a specific country, ensure that your booking payment system accepts the most common credit cards used in that country.

8. Does the payment gateway allow recurring billing?

For businesses that offer subscription-based services, you will require a payment gateway that can handle recurring billing in order to manage the constant movements of your business. Gateways that accept recurring billings will need to save and store customer payment details to enable future transactions, while also holding the capacity to charge the credit card’s specific amounts on a predetermined subscription schedule. Without a payment gateway that allows for recurring billing, you will be required to manage the transactions manually – an especially time-consuming process that is best to avoid.

9. Are there transaction limits?

Some payment gateways have transaction limits that set a maximum amount of money that can be accepted per month. While transaction limits won’t be a problem for most businesses in the tour and activity industry, it’s still recommended that you double-check the transaction limit of your chosen payment gateway to ensure that it provides the flexibility your customers require.

10. How long is the holding time?

Even though payments will most likely be approved immediately, there will still be a holding time before the money appears in your account. Holding periods allow for a set time period in which refunds and charge-backs can be handled more efficiently. Typically, holding times range from 1-7 business days, however, this varies depending on the payment gateway

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Integrate your bookings and payments. Try Rezdy for free.

Without sufficient integration, managing your business’s bookings and payments can be a complex and timely process. Streamline your current booking and payment system into one online reservation and payment system with Rezdy. Try Rezdy for free today and transform your internal processes with an all-in-one booking software.

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