With the rapid pace of digitalisation, it is now easier than ever to connect with your customers. However, this also means that your customers are increasingly smarter and expect a seamless online transaction through the customer journey from prospect to purchase, which will eventually impact your online sales. A lack of payment methods can be costly, as your digitally savvy customers may cancel their purchases in the event their preferred mode of payment is not available.
Therefore, if you are keen on starting an e-commerce business in Hong Kong, one of the most crucial considerations in choosing the best payment gateways from among the variety of local and international ones.
If you’re here, you’re probably thinking about how to improve your business operations to keep growing faster. Well, one way is to outsource routine and administrative tasks like accounting for e-commerce companies in Hong Kong. We also specialise in automating your accounting with a human touch. Otherwise, read on to evaluate and identify the payment modes that are most ideal for your business model.
What Is A Payment Gateway?
A payment gateway is a mode of collecting payment from your shoppers with the help of an application service provider, where transactions between your consumers and your online store are being authenticated and authorised. This allows your consumers to pay via credit cards, debit cards or other payment forms in a safe and fast manner.
Your payment gateway can be either through creating your merchant account or utilising a Payment Service Provider.
What Is A Merchant Account?
A merchant account is a bank account that allows your company to accept payments in a variety of ways online and is deposited after your customer has completed an online transaction.
Some of the available merchant accounts in Hong Kong include:
- Global Merchant Advisors (GMA)
- InChek, LLC
- BankCard USA
- ExpiTrans, Inc
- Credipayments, LTD
- InterBill Inc.
What Is A Payment Service Provider?
A Payment Service Provider is also known as PSP. It is a third party that facilitates merchants in accepting payments, whether through credit cards, real-time bank transfers via online banking, debit deposits, or other modes of payment. In short, they provide a seamless payment process for the customer and link this payment to your bank account in a stress-free manner. A PSP can tap on multiple payments and card networks, as well as acquiring banks, to help merchants reduce their dependence on financial institutions when it comes to managing transactions.
Merchant Account Vs Payment Service Provider
In a nutshell, a merchant account provides every merchant with an individual account, but these accounts are subjected to a more thorough vetting process. Merchant accounts are solely focused on payment processing.
On the other hand, a PSP has several users in a group or collection of merchants, offering a more complete payment solution for businesses with access to hardware and checkout tools.
|Merchant Account||Payment Service Provider|
|Pros||Transactions are made easy||Eliminates the need for merchant’s approval|
|Merchant remains in control||Most Payment Service Providers are reputable (i.e. PayPal)|
|Merchant’s name is reflected on transaction||Payment Service Provider’s name is reflected on transaction|
|Fraud protection||Disputes are handled by both third-party and merchant|
|Cons||Many criteria required to set up||Easier for beginners to set up, but would incur higher transaction fees|
|Sometimes comes with hidden charges||Run the risk of having accounts cancelled or frozen|
Top 10 Payment Methods to Consider
Popular among sellers in the United States, United Kingdom, as well as other Western countries, Stripe is a payment gateway known for its simplicity and a user-friendly dashboard. A relatively new player in Hong Kong’s e-commerce landscape, Stripe was launched in 2016.
Ideal for startups and small businesses, Stripe charges a reasonable transaction fee of 3.4% on each card charge, plus a HK$2.35 transaction fee. Stripe’s fees for merchants based in Hong Kong are in line with its fees in Singapore and other Asian markets.
Stripe provides both one-time payment and recurring payment options, and can even support more complex billing models depending on your business needs.
As a subsidiary of PayPal, you can leverage the PayPal network and next-generation technology to reach more buyers. Braintree is effortless to use, providing everything with a small and medium-sized enterprise would need at affordable pricing with no monthly fees or minimum ongoing fees.
Braintree offers a modernised and optimised payment experience to drive higher conversion. Like Stripe, Braintree provides both one-time and recurring payment options, at no additional cost on top of its standard pricing. Transaction fees are 3.4% on each card charge, plus a HK$2.35 transaction fee and an extra 1% charge for transactions paid via foreign currency. Companies that receive HK$650,000 in a month are entitled to discounted rates. However, do take note that Braintree charges a chargeback fee of HK$160, even if your company successfully lodges a dispute and reverses the chargeback.
As a reputable global payment gateway, PayPal is a good option if you want to get your business up and running in no time. With approximately 400 million worldwide active accounts, this global leader accepts a wide range of credit cards and debit cards and even offers seller protection, two-factor authentication, and 24/7 fraud protection. PayPal offers two common checkout options of PayPal Standard and PayPal Express.
PayPal Standard is similar to your usual checkout process, which means that your shoppers will have to input their information on your site before they get redirected to PayPal for their credit card payment. PayPal Express expedites the checkout process by allowing shoppers to simply log in with their existing PayPal account, eliminating the need for shoppers to key in their shipping or billing information.
PayPal Website Payments Pro is also available for companies in Hong Kong, with a fixed HK$200 monthly fee. This allows you to accept payments with a completely customisable solution, leveraging the PayPal Payflow Gateway to transfer payments to your PayPal Internet Merchant Account. Additionally, it also provides you with the versatility to change payment gateways without having to rebuild your technical integration.
If you are looking to expand your brand internationally, PayPal could be a feasible way since it supports 25 currencies and is available in over 200 countries. However, take note that PayPal charges high transaction fees, starting from 2.9% of the total value of transactions, plus an extra HK$2.35 fee per payment. Foreign payments will incur an even higher 4.4% fee, with additional currency conversion fees. For merchants with high sales volumes, PayPal offers discounts to the same rates as Stripe and Braintree.
With over 26,000 businesses onboard,eWay prides itself in providing businesses with a frictionless solution to accept payments. This payment gateway allows for easy site integration and even offers a dedicated account manager to help with the setup. New e-commerce business owners may feel assured that eWay provides 24/7 technical support, which is especially helpful. Additionally, it accepts a range of credit cards and debit cards at a transaction fee of 3.4% on each card charge, plus a HK$2.35 fee per payment. For foreign card charges, there will be a 1% cross-border fee applied per transaction.
Hong Kong-based payment gateway AsiaPay is one of the leading digital payment solutions in the Asia Pacific. If the regional market is your target audience, AsiaPay could be a good fit for your company. AsiaPay even supports up to 126 currencies and Chinese payment solutions from your usual credit and debit cards to China-specific payment options including China UnionPay, TenPay, and AliPay.
If you are targeting a global audience, 2Checkout could be an ideal option for your business.
Global payment processor 2Checkout can be integrated with over 100 shopping carts and supports recurring billing for businesses with subscription models. Moreover, it accepts payments in 87 currencies and offers a range of payment gateway languages.
However, this comes at 3.9% on each card charge, plus HK$0.45 fee per payment. Foreign payments also incur a 1.5% fee, plus an extra 2-5% currency conversion fee to HKD.
If your target audience is from mainland China, offering them the preferred payment options like WeChat Pay can be a great way to boost your business.
This China-based market leader in online payments is one of the biggest players in its field, used by Chinese consumers around the world with more than 800 million monthly active users. Additionally, the integration process is quite simple -- you simply have to integrate with it via a single API, and then start accepting payments.
WeChat Pay’s transaction fee is dependent on the sales volume, which ranges from 1.1% to 1.5% per transaction. If you are looking to enjoy some cost savings, WeChat Pay’s pricing plan may be worth your consideration. A year of “WeChat Official Account – Hong Kong” and WeChat Pay business will set you back by HK$4,988 and HK$650 respectively. However, if you sign up for 2 years of the “WeChat Official Account – Hong Kong” plan, you can enjoy a HK$500 discount, resulting in a total of HK$4,488. Moreover, if you sign up for both the “WeChat Official Account – Hong Kong” and WeChat Pay Business account for 2 years, all fees will be waived.
Alipay is a subsidiary of the Alibaba group and is currently the most used payment gateway in China. It is also one of the most popular third-party online payment service providers in China, boasting more than 520 million active users and 100 million daily transactions. According to the State of Mobile 2020 Report, AliPay is the most-used app in the world after social media apps. This also means that AliPay would be a well-received mode of payment by your customers.
AliPay Hong Kong charges a transaction fee of 2.5%. It accepts a variety of credit and debit cards from MasterCard, Visa, Mastercard and about another 180 financial institutions, making it an ideal payment solution for online stores. If customer service is something you prioritise, AliPay offers an escrow service to allow your shoppers to verify their products before they release their payment to you, giving your customers peace of mind.
A leading payment gateway in Hong Kong, Payment Asia offers multiple currencies with flexible settlement periods and accepts over 130 transaction currencies through a range of credit cards and debit cards.
A user-friendly online management system and dedicated customer service, which is beneficial for start-ups and small businesses. Known for its innovative technologies, Payment Asia also offers a crypto-gateway for your customers to pay in crypto-currency. With crypto-currency on the rise, businesses that hop on this bandwagon and offer this as a mode of payment can have a fast-mover advantage, as well as a lower flat fees to reduce transaction costs compared to normal card payments.
Adyen offers 24/7 in-house support with no setup fee and could be a good choice for new business owners.
Adyen prides itself as the payment platform of choice for many of the world’s top companies, with its modern end-to-end infrastructure that accepts MasterCard, Visa, and shoppers' globally preferred payment methods directly.
The Adyen payments platform supports all major payment methods globally, with many modes of payment that can be used outside of Hong Kong. Transactions are charged at 3% on each card charge, plus HK$0.12 fee per payment.
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