Online payment gateways: a guide for accountants and bookkeepers

Published Thursday 9 July 2026

Table of contents

• Why online payment gateways improve client cash flow
• How online payment gateways work
• Payment gateway options available in Singapore
• Set up a payment gateway for your clients
• Manage transaction fees and costs
• Advise clients on adopting payment gateways
• Simplify client payments with Xero
• FAQs on online payment gateways

Key takeaways

• Online payment gateways let your clients accept card and digital payments directly from invoices, cutting payment times significantly. Xero customers who use online invoice payments get paid up to twice as fast, according to Xero.
• Setting up a payment gateway through Xero takes minutes and requires no upfront costs, making it a low-risk recommendation for any practice.
• Singapore-specific options such as PayNow and GrabPay, alongside credit card gateways like Stripe, give your clients flexible ways to collect payments.
• Recommending payment gateways positions you as a proactive adviser focused on improving client cash flow, not just recording transactions.

Why online payment gateways improve client cash flow

Late payments remain one of the most persistent challenges your clients face. According to Xero Small Business Insights, nearly half of all invoices are paid late, creating cash flow pressure that limits growth, delays hiring, and forces owners to dip into personal savings.

Online payment gateways address this by removing friction from the payment process. When a customer receives an invoice with a "pay now" button, they can settle it in seconds rather than queuing a bank transfer or writing a cheque. Xero customers who use online invoice payments get paid up to twice as fast.

Singapore's shift toward digital payments has accelerated in recent years. More businesses expect the convenience of instant online transactions, and your clients risk falling behind if they still rely on manual bank transfers or cheques alone. Adding a payment gateway to their invoicing workflow is one of the simplest ways to shorten the payment cycle.

How online payment gateways work

A payment gateway connects your client's invoicing software to the financial networks that process payments. Here's how the typical flow works.

1. Your client sends an online invoice with a "pay now" option enabled
2. The customer clicks the payment link and selects their preferred payment method
3. The gateway securely transmits the payment details to the customer's bank or card network
4. The bank verifies the customer's identity and available funds, then authorises the transaction
5. Funds are settled into your client's account, typically within 1 to 3 business days

The main types of online payment gateways available in Singapore include:

• Credit and debit card gateways: process Visa, Mastercard, and other card payments. Settlement usually takes 2 to 3 business days.
• Digital wallets: services like PayNow and GrabPay that let customers pay from their mobile devices. PayNow payments can settle within minutes.
• Direct debit: providers like GoCardless pull payments directly from a customer's bank account. Settlement typically takes 3 to 5 business days.

Settlement times vary by provider and payment method, so it's worth factoring these into your cash flow advice to clients.

Payment gateway options available in Singapore

Several payment gateways integrate directly with Xero, each with different strengths for Singapore-based clients. Choosing the right one depends on your client's transaction volumes, customer base, and preferred payment methods.

Stripe is one of the most widely used gateways, supporting credit card, debit card, Apple Pay, and Google Pay. It charges a percentage-based fee per transaction and settles payments within 2 to 3 business days. It's a strong default choice for clients who deal with international customers.

PayPal is a digital wallet and payment processor that many customers already have accounts with. It's particularly useful for clients whose customers prefer paying through an existing PayPal balance rather than entering card details each time.

GoCardless specialises in direct debit payments, pulling funds directly from a customer's bank account. It's well suited to clients with recurring invoices, such as subscription-based services or retainer arrangements. Its fees tend to be lower than card-based gateways.

For Singapore-specific options, PayNow lets customers pay instantly using a QR code or mobile number linked to their bank account. It's widely adopted and integrates with the SGQR standard. HitPay offers a Xero integration that enables automated PayNow QR payments on online invoices, with built-in reconciliation.

InvoiceNow, built on the Peppol e-invoicing network, is gaining traction in Singapore. While it focuses on electronic invoice exchange rather than payment processing, it complements payment gateways by streamlining the invoice delivery process. Businesses registered on the InvoiceNow network can send and receive invoices electronically, reducing delays before payment even begins.

Key factors to compare when recommending a gateway include:

• Transaction fees: typically 1.5% to 3.5% for credit card payments, with lower rates for direct debit
• Supported currencies: critical for clients with international customers
• Settlement speed: ranges from minutes (PayNow) to 5 business days (some direct debit providers)
• Integration depth: how seamlessly the gateway connects with Xero for automatic reconciliation

Set up a payment gateway for your clients

Connecting a payment gateway to Xero is straightforward and typically takes less than 10 minutes. Follow these steps to get your clients up and running.

1. Assess your client's payment needs

Start by reviewing your client's current payment patterns. Look at their average invoice value, how many invoices they send each month, and how long it typically takes to receive payment. Clients with high invoice volumes or persistent late-payment issues will benefit most from a gateway.

Also consider their customer base. If most customers are local, PayNow or a card gateway may be sufficient. If they deal with international clients, Stripe or PayPal provides broader coverage.

2. Choose a compatible payment gateway

Select a gateway based on the factors covered in the section above: transaction fees, supported payment methods, settlement speed, and Xero compatibility. You can view the full list of payment services that integrate with Xero to compare options.

For most Singapore-based clients, starting with Stripe or PayNow covers the majority of payment scenarios.

3. Connect the gateway to Xero

In your client's Xero organisation, navigate to the payment services settings. Select the chosen gateway and follow the setup wizard to link the accounts. Most gateways require your client to create an account with the provider first, then authorise the connection within Xero.

The setup wizard handles the technical configuration, so you don't need any development expertise.

4. Configure payment options on invoices

Once the gateway is connected, choose which payment methods appear on your client's invoices. You can enable card payments, direct debit, or both. It's worth creating invoice templates with different payment options; for instance, a template with "pay now" for standard invoices and one without for larger projects where payment terms differ.

5. Test and go live

Send a test invoice to confirm the payment link works correctly and the transaction flows through to Xero. Check that the payment appears in the bank feed and reconciles properly. Once verified, apply the payment-enabled template to your client's regular invoicing workflow.

Manage transaction fees and costs

Transaction fees are the main ongoing cost of using payment gateways. Understanding how they work helps you advise clients on managing expenses while still benefiting from faster payments.

Typical fee ranges in Singapore include:

• Credit and debit card gateways (Stripe, PayPal): 1.5% to 3.5% per transaction
• Direct debit (GoCardless): lower percentage fees, often below 1%
• PayNow: typically free or very low cost for merchants

There are several strategies to help clients keep costs manageable:

• Set invoice thresholds: only enable "pay now" on invoices below a certain value, such as S$5,000, where the convenience benefit outweighs the fee
• Pass fees to customers: some gateways, including Stripe through Xero, allow surcharging so the transaction fee is added to the customer's payment
• Use lower-cost methods for recurring payments: direct debit through GoCardless or PayNow can reduce per-transaction costs compared to card payments

Xero automatically matches gateway fees to the corresponding payments during reconciliation, so your client's books stay accurate without manual adjustments. This saves time during month-end close and reduces the risk of misallocated expenses.

Advise clients on adopting payment gateways

Recommending payment gateways is a practical advisory conversation that delivers measurable results for your clients. Position it as a cash flow improvement, not a technology change.

Start with the clients who stand to benefit most. Those with high invoice volumes, recurring late payers, or customers who frequently request flexible payment options are strong candidates. Show them the data: compare their current average payment time against what's achievable with online payments.

When discussing payment gateways with clients, frame the conversation around outcomes:

• faster payments mean less time chasing overdue invoices
• digital payment options meet customer expectations for convenience
• automated reconciliation in Xero reduces bookkeeping time
• better cash flow visibility supports more confident business decisions

At a practice level, consider standardising gateway setup across your client base. If you recommend the same gateway to most clients, you'll build expertise in configuration, troubleshooting, and fee management. This consistency makes the service scalable without adding significant hours to your workload.

Use Xero's reporting tools to monitor payment performance over time. Track metrics such as average days to payment, percentage of invoices paid online, and total gateway fees. Share these insights with clients in your regular review meetings to demonstrate the value of the change. You can find more detail on helping clients with outstanding payments in Xero's guide to accounts receivable financing.

Simplify client payments with Xero

Payment gateways are one of the simplest ways to deliver measurable results for your clients. By connecting a gateway to Xero, you help your clients reduce payment times, cut manual follow-up, and gain clearer visibility into their cash flow.

As a Xero partner, you get access to tools, training, and support that make it easier to set up and manage payment services across your client base. Join the partner program to start building a more efficient practice.

FAQs on online payment gateways

Here are some frequently asked questions about online payment gateways that come up when advising clients.

What is an online payment gateway?

An online payment gateway is a service that processes digital payments between a buyer and a seller. It securely transmits payment information from the customer to the merchant's bank, enabling card payments, digital wallet transfers, and direct debits through online invoices.

How much do payment gateways cost in Singapore?

Most payment gateways charge no setup fees. Transaction fees typically range from 1.5% to 3.5% for credit card payments and are lower for direct debit or PayNow transactions. The exact rate depends on the provider and payment method.

Can you set up multiple payment gateways in Xero?

Yes, you can connect more than one payment gateway to a single Xero organisation. This lets your clients offer different payment options on their invoices, such as card payments through Stripe and direct debit through GoCardless.

Are online payment gateways secure?

Reputable payment gateways use encryption and comply with Payment Card Industry Data Security Standard (PCI DSS) requirements. Xero partners with established providers like Stripe, PayPal, and GoCardless, all of which maintain robust security protocols to protect transaction data.

What is InvoiceNow and how does it relate to payment gateways?

InvoiceNow is Singapore's national e-invoicing network, built on the Peppol framework. It handles the electronic exchange of invoices between businesses rather than processing payments directly. However, it complements payment gateways by speeding up invoice delivery, which in turn shortens the overall time from invoice to payment.