WooCommerce Payment Gateways: How to Choose and Set Up the Right Option

Choosing and configuring payment gateways is one of the most consequential decisions you will make for your WooCommerce store. The payment options you offer directly affect conversion rates, customer trust, and your operational costs. Research from the Baymard Institute shows that 13% of online shoppers abandon their cart because the store does not offer enough payment methods, while 17% leave due to concerns about payment security.

This guide covers the major payment gateways available for WooCommerce, how to set each one up, and the factors you should consider when building your payment stack. If you are building a new store, you may want to start with our WooCommerce setup guide for the initial configuration steps. For more detailed information, check the WooCommerce Documentation.

How WooCommerce Payment Gateways Work

A payment gateway acts as the intermediary between your store and the financial networks that process credit cards, debit cards, and digital wallets. When a customer clicks "Place Order," the gateway securely transmits payment data to the payment processor, which communicates with the customer's bank and your merchant account. WooCommerce supports two types of gateway integration:

Stripe: Full-Featured Card Processing

Stripe is the most widely used payment gateway for WooCommerce stores. It supports credit and debit cards, Apple Pay, Google Pay, and dozens of regional payment methods. Stripe processes payments directly on your checkout page, providing a seamless experience.

Setting Up Stripe

Step 1: Create a Stripe account at stripe.com. You will need your business details, bank account information, and identification for verification.

Step 2: Install and activate the WooCommerce Stripe Payment Gateway plugin from the WordPress plugin repository or WooCommerce Marketplace.

Step 3: Navigate to WooCommerce > Settings > Payments > Stripe. Click "Connect with Stripe" to link your account via OAuth, or manually enter your API keys (found in your Stripe Dashboard under Developers > API Keys).

Step 4: Enable the payment methods you want to offer. Stripe supports credit/debit cards, Apple Pay, Google Pay, iDEAL, Bancontact, SEPA Direct Debit, and others depending on your region.

Stripe Pricing and Fees

PayPal: Trusted Global Payment Option

PayPal is recognized by shoppers worldwide and offers buyer protection that many customers value. WooCommerce includes basic PayPal Standard integration, but the PayPal Payments plugin provides a more comprehensive integration with PayPal Commerce Platform.

Setting Up PayPal Payments

Step 1: Install the WooCommerce PayPal Payments plugin.

Step 2: Go to WooCommerce > Settings > Payments > PayPal and connect your PayPal Business account. If you do not have one, you can create it during the connection process.

Step 3: Configure display options. PayPal Payments supports PayPal buttons, Venmo (US only), Pay Later messaging, and credit/debit card fields powered by PayPal's card processing.

Step 4: Enable or disable Smart Payment Buttons, which dynamically show the payment methods relevant to the customer's location and device.

PayPal vs. Stripe: A Practical Comparison

Square: For Online and In-Store Sales

Square is a strong choice for businesses that sell both online and in physical locations. The WooCommerce Square integration syncs your inventory, products, and orders between your online store and Square POS system.

Setting Up Square

Install the WooCommerce Square plugin, then connect your Square account. Configure whether Square or WooCommerce is the "system of record" for inventory and product data. Square charges 2.9% + $0.30 per online transaction in the US, similar to Stripe.

Direct Bank Transfer (BACS)

Bank transfer is a zero-fee payment method built into WooCommerce. Customers receive your bank details after placing an order, then manually transfer the funds. The order remains in "On Hold" status until you confirm receipt and manually change it to "Processing."

This method works well for B2B transactions, high-value orders where credit card fees would be significant, and markets where bank transfers are the preferred payment method (common in Germany and the Netherlands). The downside is the manual verification step and slower order fulfillment.

Cash on Delivery (COD)

Cash on delivery allows customers to pay when they receive their order. Enable it under WooCommerce > Settings > Payments > Cash on delivery. You can restrict COD to specific shipping methods (e.g., only local delivery) and set a minimum or maximum order amount.

COD is popular in markets like India, the Middle East, and Southeast Asia where credit card penetration is lower. However, it increases the risk of order refusal and returns, so consider requiring a small deposit or limiting COD to verified customers.

Cryptocurrency Payments with NOWPayments

Accepting cryptocurrency opens your store to a global audience without the limitations of traditional banking. NOWPayments supports over 300 cryptocurrencies including Bitcoin, Ethereum, Litecoin, and stablecoins like USDT and USDC.

Setting Up NOWPayments

Step 1: Create a NOWPayments account and complete verification.

Step 2: Install the NOWPayments WooCommerce plugin.

Step 3: Enter your NOWPayments API key in WooCommerce > Settings > Payments > NOWPayments.

Step 4: Configure your payout wallet address and select which cryptocurrencies to accept.

NOWPayments charges a 0.5% processing fee, which is significantly lower than credit card processing. The customer selects their preferred cryptocurrency at checkout, sends the payment, and NOWPayments converts it to your preferred currency (crypto or fiat) automatically.

Regional Payment Gateways

Depending on your target market, you may need region-specific gateways. Here are some commonly used options:

PCI Compliance Essentials

PCI DSS (Payment Card Industry Data Security Standard) is a set of security requirements for handling credit card data. Your compliance responsibilities depend on how your gateway processes payments:

Hosted gateways (redirect-based) handle all card data on their servers, so your PCI responsibilities are minimal. You still need an SSL certificate and secure hosting, but you do not handle card numbers directly.

Direct gateways (on-site forms) use tokenization: the customer's browser sends card data directly to the gateway (e.g., Stripe Elements), which returns a token. Your server only handles the token, not the card number. This qualifies you for the simplest PCI self-assessment (SAQ A or SAQ A-EP).

Regardless of integration type, always use HTTPS, keep WordPress and plugins updated, use strong passwords, and restrict admin access. For a broader security overview, read our checkout optimization guide. For more technical details, visit WooCommerce Developer Resources.

Multi-Currency Payment Setup

If you sell internationally, offering prices in local currencies reduces friction and improves conversion. There are two approaches:

Gateway-level multi-currency: Stripe and PayPal both support charging in multiple currencies. The gateway handles currency conversion, and you receive payouts in your base currency (with a conversion fee, typically 1-2%).

Plugin-level multi-currency: Plugins like WooCommerce Multi-Currency or Currency Switcher display prices in the customer's local currency on your store. The actual charge can be processed in either the displayed currency or your base currency, depending on configuration.

Testing Your Payment Setup

Never launch a store without testing every payment method. Both Stripe and PayPal offer sandbox/test modes:

Stripe Test Mode

Toggle "Test mode" in the Stripe settings. Use Stripe's test card numbers to simulate different scenarios:

PayPal Sandbox

Create sandbox accounts at developer.paypal.com. PayPal provides both buyer and seller sandbox accounts so you can test the complete payment flow without real money.

Frequently Asked Questions

How many payment gateways should I offer on my WooCommerce store?

Offer 2-4 gateways that cover the major payment preferences of your target market. Typically, a card processor (Stripe or Square) plus PayPal covers most customers. Add regional methods or cryptocurrency if relevant to your audience. Offering too many options can create decision paralysis.

Can I use Stripe and PayPal at the same time?

Yes, this is a common and recommended configuration. Both gateways can be active simultaneously. Customers choose their preferred method at checkout. There is no conflict between them.

What happens if a payment gateway goes down?

If a gateway experiences an outage, customers using that method will see an error. Having multiple gateways active ensures customers can still complete their purchase through an alternative method. Monitor your gateway dashboards for status alerts.

How do I handle chargebacks and disputes?

When a customer disputes a charge, the gateway notifies you and places a hold on the disputed amount. You need to respond with evidence (order details, shipping tracking, customer communication) within the deadline (typically 7-21 days). Maintain detailed records of all transactions to strengthen your dispute responses.

Do I need an SSL certificate for payment processing?

Yes, an SSL certificate is mandatory for any store accepting payments. It encrypts data transmitted between the customer's browser and your server. Most hosting providers include free SSL certificates via Let's Encrypt. WooCommerce will warn you if SSL is not enabled.

Can I charge different payment processing fees to customers?

Some store owners add a surcharge for certain payment methods (e.g., credit card surcharge). Whether this is legal depends on your jurisdiction and the gateway's terms of service. Stripe and Visa/Mastercard have specific rules about surcharging. Check local regulations before implementing payment surcharges.

How do I set up recurring payments for subscriptions?

Use the WooCommerce Subscriptions plugin with a compatible gateway. Stripe has native subscription support through its API. PayPal supports recurring payments via Reference Transactions (requires approval from PayPal). The gateway stores the customer's payment method securely and charges it automatically on each billing cycle.