Payment processing options for an online store

Payment processing options for an online store

Recently, I spent some time exploring the ways how to receive payment within the online store with the global scope. The assignment was to find the best possible, widely acceptable payment solution (PS) for a website with a simple shopping cart. Company ships no physical goods, it sells a virtual commodity (games).

Factors which were considered:

  • Costs
    Yeah, probably the most important question: What part of the pie will the payment processing company take?

  • Speed of the transfer
    How fast is the transaction from the view of the customer? How long funds travel to the company's bank account (company may dispose with them)?

  • Privacy and security
    When a customer purchases items from company's shopping cart, he need to feel safety. Nobody wants to see his financial information stolen.

  • Jurisdiction of the payment processing company
    Where's the payment processing company “officially from”?

  • Integration costs
    How hard is to integrate (to code) selected solution with website's shopping cart.

Most interesting results

These are the most interesting results I was able to find.

Credit cards

I think that credit cards still (May, 2015) remains number one method how to receive payments in website shopping cart. Almost every internet user has a credit or debit card. It's really simple to use it.

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Transaction fees range anywhere between 2.7 – 3% + fix (around $0.30). From the customer's view, payment is instant. Within few seconds shopping cart can issued email with the download link details. I'm not going to write about technical details, but company's bank account is funded with the collected money within 3 business days.

62% of all downloads comes from the US so this is the best choice for a jurisdiction. Link above points to the 1shoppingcart.com. It's a company with strong reputation (security) – brand belongs to the Web.com group (founded in 1997). PS has a standard integration.

Online (Paypal-like) wallets

Another option is to use an online wallet. Probably the most known is Paypal. There's many people with a Paypal account out there but still not so many as card holders. Paypal also accepts cards but when I see all the fields I need to fill out after “buy it now button” redirect... OMG.

There are to main integration methods: standard through API and simple like “buy it now button”. PP is owned by eBay. Transactions are fast, funds are credited immediately.

There are many similar wallets around the world: Brazil popular service is Pagseguro, Webmoney has strong position in Russia... Too many APIs. One way how to solve this issue is to find online wallet large enough (something witch integrates as many payment services as possible).

Bitcoin (Cryptocurrencies)

This is what I see as “sleeping potential”. Cryptocurrencies (Bitcoin, Litecoin, Dogecoin) will slowly overwhelm all other PS. This is what's really new. It's a revolution – money for the internet age.

I'm mentioning this options because it represents future. But right now, in my opinion, it's not really suitable as a main method for the payments (mostly because general public needs time for an adoption like in the case of the email).

The transfer is relatively instant - within 10 minutes are money in the account. But there is no “account” in traditional way. Funds are sent to the address stored in company's computer (there is no financial middleman). Fees are very low (below 1%). Jurisdiction is jurisdiction of the company. It's secure, irreversible and there is a certain level of the “real privacy”. Standard integration costs.

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Post is listed in the Webdev category.