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Which Payment System Is Right for
Navigating the Mass of Payment Merchant
Options. Payment processors vary in the fees they charge, their terms of service, the products they’re happy for merchants to sell, and which countries they are happy to accept merchants from, so making a decision isn’t always as easy as you might at first think. PayPal is the most widely-known payment processor on the Internet. They’ve been around for many years, and have been used by millions of people to process payments for all types of online transactions. They have a built-in recurring transaction model, which is great for subscription sites. They offer a MasterCard debit card that can be used to withdraw money directly from your PayPal account via an ATM, or to spend money at any place that accepts MasterCard. They have a good reputation amongst buyers and the service is relatively easy to use for both customers and the merchant themselves. There are a few major drawbacks to PayPal. For one thing, they don’t accept merchants from certain countries so if you are in one of those countries then you can cross PayPal of your list. They also require a credit card and a bank account to be linked to them, so if you don’t have those, you can’t get a PayPal account. They’re also relatively strict about what you’re allowed to sell. For example, they don’t allow any kind of MLM schemes or multi-tiered payment schemes, so if you want to have a two-tier affiliate program then PayPal will not be the solution for you. Google Checkout is a relative newcomer to the payment processing arena. They’ve set themselves up to compete head-on with PayPal. eBay, who owns PayPal, has gone so far as to prohibit eBay sellers from accepting Google Checkout as a form of payment for auctions on their site. Maybe this is one sign that eBay and PayPal believe Google Checkout could pose a real threat to them in the future. Google Checkout certainly has some competitive benefits that will give PayPal a run for its money and I am sure conventional credit card payment processors must be watching what happens with a high level of concern. One of the big benefits of Checkout is that it offers free processing for AdWords advertisers based on their ad spend. For every dollar you spend on AdWords you qualify for free processing on sales up to ten times that amount. This means if you spend $1,000 per month on AdWords, you can process $10,000 in sales without any processing fees. If you go above ten times your AdWords expenditure, the fees are only 2 % + $0.20 per transaction, which compares very favorably with PayPal’s fees, which are 1.9% to 2.9% + $0.30 per transaction. If you’d prefer to go down route of having your own merchant account rather than using a service such as PayPal or Google Checkout then a lot of options are open to you. Having your own merchant account can be a major benefit if your level of sales justify it, but getting a full-blown merchant account is usually considerably more difficult that opening an account with PayPal or Google. In addition to making you jump through a lot of hoops in terms of paperwork, conventional merchant accounts will often have a considerable number of rules that you must abide by, and will often ask you a lot of in-depth questions about the products you are going to be selling, what kind of guarantees you offer, what your refund policy is, etc. One of the major benefits of having your own merchant account is that it is often far easier to integrate them directly into your sales process than either PayPal or Google. Most top-end merchant accounts come with powerful APIs that allow your programmers to tightly integrate all aspects of the payment process into the sales process so that it appears completely seamless to the end user. A major downside to some of the merchant account providers is that they can behave in an incredibly arrogant way on some occasions. It’s far from unknown for people to have their credit card processing facility cut off with no prior notice for minor issues, or simply because they think you have turned over too much in a short period of time, which is obviously a problem for Internet marketers who are in the process of a major launch. PayPal have historically tended to be far more accommodating with this kind of thing, although they’ve been known to do exactly the same thing from time to time, just not quite as frequently. No matter which route you choose to go down you need to be very clear of what you require from your payment processor. You also need to make sure you do your due diligence as far as issues such as exceeding turnover levels are concerned. Time spent finding the right payment provider is time well spent, as moving from one payment system to another, once your business is up and running, is often a complex process, particularly if you have an affiliate scheme tied in to it.
On the plus side, it’s far easier to get
payment processing facilities now than it has ever been, and
with the likes of Google joining the fray the extra competition
should help to see a continuing downward trend in the rates
being charged and an upward trend in the level of service being
offered. About Paul Smithson - Paul Smithson is the founder of Intellimon and the driving force behind the best-selling XSitePro web site development tool. Since graduating in Business Strategy and Direct Marketing from two of Europe’s leading business schools, Paul has set up five multi-million dollar companies, one of which is now owned by the BBC. His areas of expertise include business strategy, e-commerce, on-line and off-line marketing, software development, and maximizing the potential of on-line businesses.
Source: http://www.xsitepro.com/which-payment-system-is-right-for-my-website.html | ||
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