In this article, I’ll share my thoughts on the best way to start taking credit and debit card payments online for a product or service you plan to sell. If you’re starting up or running a small business on a tight budget, particularly if you’re trying to build your site yourself, this may help you. It is based on my personal experience building a handful of small-scale commercial sites.
For larger eCommerce operations, the typical arrangement for card payments is to use a merchant account with an online payment gateway such as Authorize.net. This allows for the most control over the user experience, the best data collecting capabilities, and with a large volume of transactions it is the most cost effective solutions. To take payments this way, you need two services – a “merchant account” with a bank and also a payment gateway service, which is the online equivalent of the card-swipe terminal you see in stores. Both of those services usually have a monthly fee as well as minimum transaction fees. And, the setup is usually beyond the amateur web developer – most business hacks would need to hire help for the installation. That is why it takes a significant amount of charge activity to make that typical setup worthwhile. The exact activity level depends a bit on the specific situation, but generally it would be in the high-thousands of dollars in revenue per month and up.
If you’re just starting out, or if you’re planning a niche business that will never have a high level of sales, you will probably want to consider an all-in-one online payment service like PayPal, Google Checkout, or Checkout by Amazon . These services have a simpler setup and fee structure in exchange for higher per-transaction fees. Unlike “regular” merchant accounts, you don’t necessarily need to have a legal business entity to set up an account – you can set them up as an individual. Also, you will only need to set up one account. These payment services not only provide a complete ability to take credit cards via your site, they also include features like shopping carts, shipping and tax calculations, and incoming order management tools. If you have a limited number of items to sell, pairing one of these accounts with a site based on WordPress or some other basic site management tool may be all you need.
Comparing the “Big 3″ Payment Services
The rest of this article will mostly focus on a comparison of the big three services currently in this space. I have built multiple websites that use PayPal and Google Checkout to sell both physical and digital goods. I have not yet built a site based on Checkout by Amazon, so my information there is based on their online material and a bit of light experimentation. But, they are an option worth considering so I wanted to make sure they were represented.
