How to Choose a Payment Gateway for Selling Across Borders
What a payment gateway does for international sales
A payment gateway is the system that moves money from a customer's card or bank account to your merchant account when they buy from you online. For international transactions, the gateway also converts currency, handles different card types that work in different regions, and manages the rules that vary by country—like whether a customer needs to enter a PIN or pass a security check.
The difference between a domestic and international gateway is not always obvious from the outside. A gateway that works fine for US customers may reject cards from Europe because it does not handle the security standards those cards require. It may not convert currency at a rate that makes sense for your margins. It may not work in the countries where your customers actually live. Choosing the right one means understanding what your customers need to pay you, where they are, and what the gateway actually supports.
Key Takeaways
- Different payment gateways support different countries and card types, so you need to match the gateway to where your customers are located.
- Currency conversion happens at the gateway level, and the exchange rate and fees vary widely between providers—this directly affects your profit on each sale.
- Security standards like 3D Secure (also called Strong Customer Authentication in Europe) are required in some regions and optional in others; the wrong gateway can block legitimate sales.
- Pricing for international transactions usually includes a base percentage fee, a per-transaction fee, and a currency conversion markup—all three add up and vary by provider.
- Testing with a small number of real transactions in your target countries before committing to a provider helps you avoid switching costs later.
How currency conversion and fees work at the gateway level
When a customer in Japan pays you in yen, the gateway converts that to your home currency (usually US dollars if you are based in the US) before depositing it into your merchant account. The gateway does not use the mid-market exchange rate you see on Google—it uses its own rate, which includes a markup. That markup is how the gateway makes money on currency conversion, separate from the transaction fee you already pay.
A gateway might charge you 2.9% + $0.30 per transaction, plus a currency conversion markup of 2% to 3%. If a customer in the UK pays £100, the gateway converts it at a rate that is 2% to 3% worse than the real market rate, then charges you the percentage and per-transaction fee on top. Over hundreds of transactions, this compounds. Some gateways publish their conversion markup; others bury it in fine print or do not disclose it at all. Before you sign up, ask the provider directly what their currency conversion markup is, and test it with a real transaction if they will let you.
Regional differences in card types and security requirements
Not every card works everywhere, and not every gateway supports every card. Visa and Mastercard are nearly universal, but American Express is less common outside North America and Australia. In Asia, local card networks like UnionPay (China) and JCB (Japan) handle a large share of transactions. A gateway that only supports Visa and Mastercard will turn away customers who have no other way to pay.
Security requirements also differ by region. The European Union requires Strong Customer Authentication (SCA), which usually means the customer must verify the payment with a second factor—a code sent to their phone, a fingerprint, or a PIN. If your gateway does not support SCA, European customers will see their transactions rejected even if the card is valid. The UK, Australia, and Canada have similar rules. A gateway that works for US customers may fail for European ones if it does not handle these security standards.
Before choosing a gateway, list the countries where you expect the most sales and check the provider's documentation for which card types and security standards they support in each one. If the documentation is vague, contact their support team and ask for a specific list.
Comparing pricing structures across providers
Payment gateway pricing has three moving parts: the transaction fee (usually a percentage plus a fixed amount per transaction), the currency conversion markup, and sometimes a monthly account fee. A gateway that looks cheap on the percentage might have a high conversion markup. One with no monthly fee might charge more per transaction.
| Pricing Component | What It Covers | Typical Range |
|---|---|---|
| Transaction fee | Processing the payment and moving money to your account | 2.2% to 3.5% + $0.20 to $0.50 per transaction |
| Currency conversion markup | Converting foreign currency to your home currency | 1% to 3% above the real exchange rate |
| Monthly account fee | Access to the gateway and support | $0 to $50, or higher for enterprise plans |
| Chargeback fee | Charged when a customer disputes a transaction | $15 to $100 per chargeback |
To compare fairly, calculate the total cost of a real transaction in each of your target currencies. If you sell to customers in Canada, the UK, and Australia, process a test transaction in each currency with two or three different gateways. Write down the amount the customer paid, the amount that landed in your account, and the fees charged. The difference tells you the true cost, not the advertised rate.
Which gateways work best in specific regions
Stripe operates in over 40 countries and supports most major card types and regional payment methods (like iDEAL in the Netherlands and Alipay in China). It handles Strong Customer Authentication automatically. Stripe's fees are consistent across regions, though the currency conversion markup is not published and varies.
PayPal and Braintree (owned by PayPal) work in most countries but have higher per-transaction fees and less transparent conversion rates. They are useful if your customers already have PayPal accounts and prefer to pay that way, but they are usually not the cheapest option for card-only transactions.
Square and Toast are primarily US-focused; they support some international cards but do not handle currency conversion well and do not work in many countries outside North America.
Wise (formerly TransferWise) is designed for moving money between countries and has very low conversion markups, but it is not a full payment gateway—it works best as a tool to move money out of your merchant account after you have already been paid, not as the initial payment processor.
For specific regions: Southeast Asia often requires local gateways like 2Checkout or Adyen. India has strong local options like Razorpay. Latin America uses providers like Mercado Pago. If you are selling primarily in one region, research the local standard before defaulting to a US-based provider.
Testing before you commit to a provider
Most payment gateways let you set up a test account and process fake transactions for free. Use this to check whether the gateway accepts cards from your target countries and whether the security flow works the way you expect. But a test transaction does not tell you the real conversion rate or the exact fees you will pay—those only show up on real transactions.
Before you fully migrate your store, process a small number of real transactions (five to ten) with your top choice of gateway in each of your target currencies. Ask a friend or colleague in another country to make a purchase, or buy something from yourself. Check the exact amount that lands in your account and the fees charged. If the conversion rate or fees are worse than you expected, you still have time to switch before you have thousands of transactions locked into one provider.
Keep records of these test transactions. If you switch gateways later and a customer disputes a charge, you may need to prove which gateway processed the original payment.
What happens when a customer's payment is declined
A payment can be declined for many reasons: the card is expired, the customer entered the wrong ZIP code, the card issuer flagged it as suspicious, or the gateway does not support that card type or region. When this happens, the customer sees an error message, but you often do not see the reason unless you log into your gateway dashboard.
Some gateways show you detailed decline codes (like "card expired" or "insufficient funds") so you can help the customer fix the problem. Others show only a generic "payment declined" message. If you plan to sell to customers who may not speak English or may not understand payment systems, choose a gateway that gives you detailed decline information so you can help them troubleshoot.
A high decline rate in a particular country can signal that the gateway does not support that region well, or that your customers prefer a different payment method. If you see this pattern, it is worth switching gateways or adding a local payment option (like Alipay for China or iDEAL for the Netherlands).
Frequently Asked Questions
Do I need a different gateway for each country I sell to?
No. A single gateway like Stripe can process payments from customers in many countries at once. However, you do need to verify that the gateway supports the card types and security standards in each country where you have customers. Some gateways work better in certain regions than others, so if most of your sales are in one country, a local provider may offer better rates or support.
What is the difference between a payment gateway and a payment processor?
A payment gateway is the software that collects payment information and routes it to the processor. The processor is the company that actually moves the money from the customer's bank to yours. Many providers (like Stripe) act as both, so you do not have to deal with two separate companies. Others (like PayPal) are primarily processors that also provide gateway software.
Can I use the same gateway for both my website and my mobile app?
Most gateways support both, but the setup is different. Website payments usually use a form on your checkout page; app payments use an SDK (a code library) that you build into your app. Check the gateway's documentation to make sure they support both before you commit.
What happens if a customer disputes a charge after I have already shipped the product?
This is called a chargeback. The customer's bank reverses the charge, and the gateway charges you a chargeback fee (usually $15 to $100). You can dispute the chargeback by providing proof of delivery or a signed receipt, but the process takes time and you may not win. To reduce chargebacks, keep detailed records of what you shipped, when it arrived, and any customer communication about the order.
Is it cheaper to convert currency myself instead of letting the gateway do it?
No. If you ask a customer to pay in your home currency instead of theirs, they see a worse exchange rate on their end (their bank converts it), and they may abandon the purchase because the final price is unclear. It is better to let the gateway handle currency conversion and show the customer the price in their own currency upfront. The gateway's markup is usually smaller than what a customer's bank would charge.