If you run an eCommerce business, you need a safe, reliable way for customers to pay you. But setting up a payment gateway isn’t always as easy as it sounds…
First, you need to make sure the tool you use integrates with your current tech stack without having to set up a complex series of Zaps that threaten to collapse at any moment. And without paying your margin-worth in fees. Plus, your payment option has to work in the countries your customers live and shop.
Finding the right option isn’t always easy. That’s why we put together a list of the top payment tools for accepting eCommerce payments.
A word of warning before you scroll to the end. This list isn’t a worst to best countdown.
The options here don’t range from slightly better than snail-mailing checks to a super-cheap, super-secure time-traveling payment gateway that is also user-friendly and 100% secure.
Instead, we look at 5 robust tools – each with their fair share of strengths, weaknesses, and peculiarities.
5 Tools eCommerce sellers can use to accept payments
1. PayPal: The OG of the eCom world
PayPal was one of the first eCommerce tools to gain widespread acceptance – an impressive feat, especially since it wasn’t initially backed by one of the major credit card companies. As such, it’s a great example of what a mature eCommerce platform looks like.
PayPal works best if you’re looking to mainly accept domestic and international payments in Europe or North America. They have an easy-to-use interface, and you can install it as a plug-in to virtually any website.
Outside of credit card behemoths like Visa and Mastercard, PayPal has one of the most secure anti-fraud systems available. If you’re very concerned about consumer fraud, PayPal has a serious advantage.
But that advantage comes at a price. PayPal’s fees are among the highest of any eCommerce payment tool ranging from 1.55 to 4.4% on top of a flat fee which, if you’re running a business on thin margins, can be a pretty hefty blow to your bottom line.
2. Stripe: The developer’s favorite
Stripe is the (relatively) new kid on the block looking to eat PayPal’s lunch. The brainchild of two Irish entrepreneurs tired of the excessive fees that came with making an overseas purchase, Stripe made it easier for ambitious entrepreneurs to set up online businesses and collect payments.
Stripe focuses on making accepting payments easy. But, while their fees are typically lower than PayPal, for some transactions, they’re still a little on the pricey side, ranging from 2.9-3.9%. Like other payment tools on this list you can also negotiate a rate based on volume.
Stripe is an excellent choice if you’re looking to take some of the hassles out of setting up your payment option. They have an awesome interface and excellent customer support. Stripe has also partnered with several domestic payment processors in China to make it easier for Chinese consumers to buy your goods.
3. Square: Great for eCom businesses with a brick-and-mortar component
Square has been a staple of companies when a hardline point of sale was just not practical. They dominated the food truck and pop-up payment scene and now they’ve set their sights on eCommerce next.
Square might be perfect for your business if you have a brick-and-mortar component and don’t plan on doing regular business with international clients. They pride themselves on transparency with pricing at 2.9% across all major credit cards with a flat fee of .30c on every transaction – like Stripe.
Like PayPal and Stripe, Square also has a negotiated rate. With the simplicity of knowing what you’re paying in fees without checking card issuers, Square might be an attractive choice.
4. Transferwise: Useful for international eCommerce businesses
Don’t worry. We haven’t lost the plot. Transferwise might not be an eCommerce payment tool in the traditional sense, but they’re a great choice when it comes to making regular or one-time international payments.
Transferwise uses a blend of local banking and favorable currency exchange to make international payments fast and easy. They’re also one of the more economical choices for exchanging foreign currency for local money.
How does this help you accept payments? Well, it doesn’t really. But their growing eCom arm does help you cut the costs of paying overseas suppliers and vendors. This can be particularly useful for large orders as the processing fees are considerably lower than any of the eCommerce gateways mentioned above.
Transferwise has also partnered with Stripe and Amazon to offer business customers free payouts in local currency from those providers.
5. Apple Pay
What started as an easier way to collect payments from Apple’s native app store has turned into a full-service mobile payment solution intended to replace in-person credit card swipes.
Apple Pay is a great alternative to Square if your business uses other hardware tools from Apple. The tech giant has also launched a payment gateway for online transactions, though the consumer base is limited to people that already own Apple’s proprietary hardware.
However, Tim Cook is focused on expanding merchant services for Apple and Apple Pay. He recently introduced a credit card in partnership with Goldman Sachs and plans to expand their eCommerce offerings.
For now, this option might be better suited to online stores with a connection to the hardware brand but time will tell if Apple pay turns into a competitor to PayPal, Stripe, and Square.
You don’t have to commit to a single tool
A single payment gateway might not be enough to reach all the customers you want to while keeping domestic payment costs down.
In which case, it might be worth considering using more than one of the tools we’ve talked about.
A word of caution – having more than one payment gateway means you have to deal with more than one provider, which can lead to additional complications.