May 7, 2018
With so many choices and different processing rates structures, it’s hard to tell which payment processing solution is right for your website’s checkout. As web developers having lots of eCommerce sites under our belts, we’re here to break this down for you in a simple way.
PayPal is 2.9% + $0.30 per transaction.
The thing about PayPal is that in order to have a seamless transaction where users check out on your site (without being routed to PayPal.com and then back to a thank-you page on your site) is that you have to upgrade to PayPal Payments Pro version which costs $30/mo. This is never worth it, because other services are available at the same processing rate and $0/mo. The only time “PayPal – anything” should be attractive is if you’re not willing to have an SSL certificate (https://) on your site and you’re okay with routing users off your site to PayPal to checkout and then back to a thank-you page. This is outdated and less professional process that opens your potential customers up to confusion in our opinion. The free version of PayPal where users have to go to PayPal.com to check out does not make it very obvious that you can use a credit or debit card. They want people to use PayPal instead. And a lot of people get confused and miss that. I know from my own personal experience in the early 2000’s.
In short, don’t use PayPal on your site for checkout unless you only have a “Donate” button you want to add temporarily or something.
Stripe or Square:
Stripe or Square (Stripe.com or SquareUp.com) are better alternatives at the 2.9% + $0.30 processing rate because they’re otherwise free with no monthly or annual rates.
I group them together because they’re basically the same. By using an SSL certificate on your site’s hosting, you can integrate Square or Stripe’s free plugins for WordPress on your site and offer a seamless checkout experience on your site where users easily navigate their cart, add their credit/debit card (Visa, Mastercard, Discover, Amex are all excepted) and the payment processes at 2.9% + $0.30 on the transaction. Funds are directly accepted into your Stripe (or Square) account and you can set your account to automatically deposit your daily balance funds into your bank account the next day M-F. You get you money pretty quick and without hassle or any setup, monthly or annual funds.
Authorize.net or FirstData:
I group these two together because they work quite similarly. The advantage for people to use Authorize.net or FirstData with your bank is that you can pay down your rate to as low as 2.2% but you have to pay a monthly fee. This only becomes worth doing if you’re doing enough volume to substantiate the monthly fee.
I tell people to start out with Stripe or Square, and then upgrade to authorize.net or FirstData once they’re doing over 10-15K per month in online sales.