Discuss 2 popular ways of payments in the UK: online payment gateway & money transfer services

Every day in the UK, millions of pounds are transferred between bank accounts. This is due to the digital payment revolutions in Britain. There are 2 options for managing finances online: online payment gateways and money transfer services.

For UK ecommerce growth or foreign trade, reliable payment gateways designed for UK transactions are essential. These gateways ensure secure online transactions, enhancing business efficiency and success.

This article aims to explain the distinctions between them. It also aims to assist you in deciding which option better fits your financial demands.

Transfer service providers and online payment gateways

Although online payment gateways and money transfer services facilitate financial transactions digitally, they serve distinct purposes.

Their purposes

The primary distinction between an online payment gateway and a money transfer service provider lies in their purposes. An online payment gateway is primarily utilized for accepting payments from customers. A money transfer service provider is used for sending or receiving payments from other parties.

Think of an online payment gateway like a digital bridge. It links your website or app to a bank or credit card company, simplifying online payments for customers. It’s available on your website or app to select, such as: debit cards, credit cards or digital wallets.

According to Statrys, in 2021, ecommerce accounted for 30% of the UK’s total retail market. The projected revenue is expected to reach $194.1 billion by 2027. This highlights the big need for payment and transfer services in ecommerce.

In contrast, a money transfer service provider facilitates electronic funds transfers for individuals or businesses. These transfers often occur across different accounts or borders. They extend beyond online shopping. Also, they provide a secure and convenient means to send and receive money for diverse purposes. These purposes include remittances, bill payments, and splitting expenses.

Users can transfer money online via websites, apps, or physical agent locations. The service also manages currency conversion, exchange rates, and compliance with regulations.

The UK makes up a big part in the worldwide money transfer industry estimated to reach $1.5 trillion in 2027. (Source: ResearchAndMarkets)

Fee structures

Another disparity lies in their fee structures: an online payment gateway typically imposes a percentage fee per transaction, whereas a money transfer service provider typically levies a flat fee per transfer.

Online payment gateways typically impose transaction fees, which are often calculated as a percentage of the purchase amount. Additionally, they may levy extra charges for particular payment methods or monthly service fees. Transaction expenses typically range from 1.2% to 3.4% per transaction, along with fixed fees (usually around 20 pence per transaction in the UK). (Source: Merchant Savvy)

Money transfer services have varying fee structures. They might charge transaction expenses, fixed fees, or a combination of both, depending on the transfer amount, transfer speed (instant vs. slower options), and recipient location. Varies depending on service, transfer amount, and destination, they generally fall between 0.5% and 6% of the transfer value. [Source: Finder.com]

Technologies applied

Online payment gateways use strong security measures to keep your information safe. They include PCI DSS (Payment Card Industry Data Security Standard) to safeguard sensitive customer information during online transactions.They use strong encryption algorithms like AES (Advanced Encryption Standard) to jumble important information so no one else can understand and decode it.

Money transfer service providers use different technologies to make sure sending money is safe and easy. They use HTTPS (Hypertext Transfer Protocol Secure) to keep your financial information secure and networks like Visa and Mastercard to authorize transactions. Some are even trying out new things like blockchain for international transfers.

Advanced tech like AI helps spot fraud and make things better for users, while APIs let them work smoothly with websites and apps. Cloud computing helps them grow, big data helps understand customers, and biometric authentication adds extra security.

In short, all of these technologies work together to make sure money transfers are reliable and easy for people everywhere.

Which one should you choose for your international money transfer?

Suppose you run an online store and need to handle payments from your customers. In such a scenario, an online payment gateway becomes essential.

If you are paying your suppliers or business partners in another country, you would need a money transfer service provider to send them the money.

Here are some breakdowns:

The type and volume of payments you need to handle

If you need to accept payments from customers using diverse methods and currencies, an online payment gateway could be the better choice.

Conversely, if you need to send or receive payments from other parties across different countries and currencies, a money transfer service provider might be more suitable.

The cost and speed of the payments

To cut fees down and make more profits, compare various online payment gateways and money transfer service providers. Select the option with the most favorable rates and terms for your transactions.

If you want to ensure the fast delivery and receipt of the payments, you should also check the processing time and availability of the different options.

The security and reliability of the payments

To safeguard your payment data and prevent fraud and chargebacks, opt for an online payment gateway or money transfer service provider known for its robust security measures, encryption, and reputable track record in the industry.

DNBC: online payment services for international money transfer

DNBC is an online payment service provider with clear fees, so you always know what you’re paying for. No surprises or hidden costs, just confidence in managing your money without any unexpected charges.

This transparency builds trust, making DNBC a favorite choice for reliable financial transactions.

In addition, DNBC offers customer service with 1-on-1 support. Their dedicated advisors are there to help with international money transfers, giving you tailored assistance every step of the way around the world, especially in the UK.

With this support, you can make informed decisions and reach your financial goals easily.