Selecting the Right Payment Processor for Your Web-based Business

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With all the important decisions that go into building an E-commerce page for your business, including the style and content, the products you offer, your price points, and profit margins, an easily overlooked decision is the payment processor you choose to take online credit card transactions. This article will examine the options available to help you select what is right for your individual business.

PayPal

One of the most popular online payment processors, PayPal has a large user base and is widely trusted by savvy purchasers. PayPal charges a processing fee of 2.9% for transactions and accepts all major credit cards plus bank transfers. Criticisms of PayPal revolve around issues with frozen accounts and confiscated funds at the discretion of their security team, with no legal basis for recouping seized funds.

Google Checkout

Google’s payment solution is quickly becoming a viable alternative to PayPal. With fees of 2.9%, little to no history of seizing funds, and the trusted Google name reassuring your customers, this is a preferred processor for many retailers.

Amazon Payments

A relative newcomer to the payment processor scene, but an Internet retailing giant, Amazon’s payment processing system offers a discount on fees for products over $10, charging 2.9% for credit cards but only 2% for bank transfers. Most Internet shoppers already have an Amazon account with stored payment information that they can use to  complete your transaction without creating a new account. Choose Amazon if you retail most or all of your products for $10 or more.

ClickBank

ClickBank is a unique retailer in that most products sold here are informational, like eBooks, site memberships, or subscriptions. Other payment processors frown on vendors of this nature. Since ClickBank includes a marketplace of it’s own where your product will be listed and provides easily integrated affiliate marketing, this is truly the only choice for products that will be delivered electronically. ClickBank charges 7.5% + $1, plus affiliates receive a commission for every sale they generate.

Authorize.net

Authorize.net processes both online payments and brick and mortar payments, meaning retailers can add credit card processing locations street locations and Web stores with just one payment processor. Transaction fees for this service are lower than other payment processors at 2.19%, but this is the only payment processor that requires both a $99 setup fee and $9.95 monthly fees, making this a reasonable choice only for retailers who do thousands in credit card transactions every month.

Of the available credit card processors, based on reliability, trust, and easy integration and use for both retailers and customers, Amazon Payments comes out on top for medium-volume retailers. Authorize.net’s fee schedule, however, is more competitive for high-volume retailers.