All online businesses, be they e-commerce marketplaces, merchants or subscription services, have one thing in common – processing payments. It is true that today basically anyone can run their own online business – all you need is just a website. Nevertheless, before you delve into that world, there are some considerations to bear in mind. In order for your business to survive, it needs to generate money, which does not happen by magic. Therefore, to collect customer payments directly through your website, you need to choose and install a payment gateway.
Today, the online payment market is getting more and more crowded and while having a greater competition is good for businesses, the number of payment providers can be overwhelming. For that reason, we'll take a closer look at the three of the most popular payment gateways today, helping you calculate the most cost-effective service. Let's find out who the winner is between Stripe, PayPal and Braintree.
Probably the dark horse in the running to become the number one in the world of online payments, Stripe is a five year old online payment startup which was valued at $3.5 billion after its latest funding round. Plus, it recently became an Apple Pay preferred vendor. Wondering why is Stripe so popular? Well, it offers you the opportunity to take on-site payments without the monthly fee. Stripe is a bit trickier proposition to configure as it is targeted at developers. Nevertheless, if you know what you're doing or are willing to hire someone, then Stripe is the best payment processor for the job. Furthermore, Stripe has an anti-fraud team that takes care of any dubious transactions. It supports recurring payments out-the-box and is among the best solutions for international businesses as you can accept over 100 currencies, which are all automatically converted to your default currency. Here are some of the most important key points:
- 2.9% + 0.30 transaction fee;
- no monthly fees or set up costs;
- you can pay using any major credit card;
- the money received is transferred into your bank on a 2-day rolling basis – there are no manual withdrawals required;
- currently Stripe is available in 21 countries and that number is expected to increase.
For developers, Stripe offers a few official API Libraries for different languages, including Ruby, Python, PHP, Java, Node.js, Go, iOS, Android. There are also a few other libraries contributed by the community for these and some other languages. Some of the languages that have a community developed libraries are C#, Perl and ColdFusion. Personally I’ve developed with the Stripe.NET library by Jayme Davis and I would recommend it to others who need to integrate Stripe into a .NET system. Here is a link to the Stripe documentation page where you can find more info about integrating Stripe into your site: https://stripe.com/docs
Their documentation is clean, well-written which makes the API extremely easy to use.
Also I love the support Stripe offers to developers. Besides the standard email and phone support, they have an IRC channel where some of their support team hangs out together with other developers and answers questions fast. I wish more platforms offered this kind of support. Here is a link to that channel: http://irc.lc/freenode/stripe
There is a big reason why PayPal is one of the most popular payment processors – it is probably the easiest payment getaway to configure. Customers are redirected to the PayPal website to make their payment, thus, there is no authorization, processing and security issues that you will need to worry about – just add the “Pay with PayPal” button on your website and leave the rest to PayPal. However, this checkout procedure may be a downside as many store owners do not like redirecting their customers away to the external PayPal website. Handling all the payments on-site is a far more streamlined checkout procedure, which is not supported by PayPal Standard unfortunately. Nevertheless, with no monthly fees or set up costs whatsoever, plus a free, smooth integration with WooCommerce, PayPal is ideal for small businesses that are just starting out. Here are some key points to bear in mind:
- US fees are 2.9% + $0.30 per transaction;
- no monthly fees or startup costs;
- checkout process is handled externally;
- customers can pay with their PayPal account or with any major credit card;
- transactions under $10 (micropayments) are charged at 5% + $0.05 per transaction;
- funds transferred to your bank account in three-four days;
- PayPal Standard is available in 203 countries.
PayPal too provides multiple different API libraries for different programming languages including C#, Ruby, Node.js, Python and PHP.
Over the years PayPal’s API has gone from being very simple to one of the most complex. It includes so many things that it’d be easy to feel overwhelmed.
One of the most popular options is Website Payments Pro which provides credit card processing. It allows you to place a few fields on your website which will collect the credit card data and billing address. After the form is submit your website will forward the data to the PayPal servers where they will charge the customer upon verification of the data sent to them.
Another option is the Paypal Payments Standard which takes the customer to the PayPal page to complete the checkout process and brings them back to your site when it’s done.
Here’s a link to PayPal’s developer documentation: https://developer.paypal.com/docs/
Braintree is a simple way to accept payments as well as to enable buying from almost anywhere – online or in your mobile application. It has easy integration that enables you access to a variety of payment methods, simple pricing, world class support and top-notch protection. If you're a more global player, you'd be better off using Braintree taking in consideration its more robust international availability as well as currency settlement options that it provides. Braintree allows you to receive payments from more than 130 different currencies but only allows you to settle in 13 currencies. It does not handle currency conversion, instead, the customers are charged in your account's currency and it is the customer's bank that further handles the conversion and the rest of the associated fees. Some things to bear in mind:
- Braintree has a sophisticated fraud protection at no additional cost;
- it offers data portability, thus, if you ever need to leave their services, you can easily take all of your customer data with you;
- all types of organizations can use Braintree to accept payments in websites and mobile apps. However, due to some legal and regulatory compliance reasons, they are unable to work with some spceific types of businesses. For more info, read their acceptable use policy.