Choosing an Online Payment Platform for your eCommerce
Hi there ! This article will try to answer all your questions about the different online payment platforms available today and which one to choose for your eCommerce website.
If you’re already in the process of starting your ecommerce website, you probably realized that there are a lot of different options available. First of, I must say that I’m a big fan of “open” payment platforms. By “open”, I mean a platform which is not attached to a bank and with which one can do business without having a contract. I think you probably already know PayPal. So we are talking about platforms which are really similar to PayPal in the sense that they don’t warrant any commitment and they are easy to integrate
When we talk about payment platforms that are attached to banks and financial institutions, there’s Desjardins with Monéris, as well as Global Payments and several others. Those platforms are a bit hungry for your money… I’m going to draw a parallel with the POS you can find in most stores. If you already have a physical store, chances are you have been approached more than once by a reseller or a bank to have a POS. Often, when you have a shop you get approached even if you already have a contract with a POS platform. In concrete terms, these resellers or these banks will sell a POS platform with a contract ; a commitment of 12 or 24 months, which you will not be able to break in the middle of this period. You are committed (with a certain percentage of fees to pay) and you are caught up with until the end of your term.
Honestly, it’s always like that with the POS and the problem is that if you start your business today, in a year you will probably have reached a certain level of sales and then you may not think to re-negotiate your fee rate. Then it will stay at 2.5% or 3%. It’s going to take a few years before you realize you can negotiate that rate. And during all those years, the bank and the POS platform will have pocketed a lot of money from you. If, in the meantime, someone arrives and offers you a better rate, you will not be able to leave because you are committed by law due to the contract. That’s why I’m not a fan of this business model when it comes time to choose an online payment platform. The banks and gateways of this world are too greedy and will always think about themselves before thinking about you.
Chances are that if you are reading this article, you were possibly looking at these solutions for your ecommerce project. I strongly suggest that you stop and instead start looking at the open payment platforms such as PayPal, Stripe and Square.
Technically, when comes the time to integrate a payment platform, most programmers are very cautious and anxious. Why? Because a lot of programmers are allergic to security certificates. And because most traditional payment platforms (such as Monéris and Global Payments) are extremely difficult to integrate if you don’t already have a plug-in on your ecommerce platform that helps the set-up tremendously. We’re talking about OPIs that are very complicated, long telephone calls, error messages that are not always clear, long documents to read…. So for a developer, it’s still quite difficult to navigate throughout all those constraints and understand all the aspects to do a quick and effective job.
On the flipside, let’s look at Stripe (for example). Stripe is an Irish-American company that was founded in 2011. It a really easy to use platform. I wouldn’t necessarily say that absolutely everyone would be able to integrate it on his website themselves as it still takes a bit of technical knowledge. But you’ll only need to hire a senior programmer and he’ll be able to do it rather quickly. Also, the fees are rather affordable. You can open an account on their website in a matter of minutes. You only give your social insurance number (to prevent fraud), a few banking informations here and there (where the money will be deposited, etc…) and that’s it ! You’ll automatically receive a code + an account and you’ll be able to integrate the payment platform on your website. Whether it’s a WordPress site, a homemade website or an eCommerce website, all serious eCommerce platforms offer at least one plug-in to connect your site to Stripe. I must also tell you that Shopify have Stripe as a default payment platform setup. If Shopify chose them, that’s a guarantee of quality in my mind.
There’s also the well known PayPal that could be a good alternative payment method. I wouldn’t put it as the first payment option because it’s costly and sometimes, PayPal will freeze your payments if you exceed a certain limit. But having PayPal on your site is definitively a plus for some because it reassures certain people who are more used to PayPal to make their payments. The bad part is that you’ll often be angry at PayPal because of the aforementioned aspects 🙂
There’s also Square who has at payment platform which is similar to Stripe’s. Again, it’s worth trying because it’s low cost and there’s no contract.
With all those open payment options, the money is deposited in your account a few days after the transaction is completed on your website. Sometimes, it’s quite fast (24H) and other times, it can take up to 7 days. But all in all, it’s quite quick. They charge their fees and simply deposit the rest in your account.
*If you’re in Quebec, Snipcart is a really interesting option as well.
Ultimately, to summarize, I recommended Stripe, Square (created by the founder of Twitter ; little known fact), PayPal, Snipcart… and please avoid the solutions presented by your bank.