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Payment Gateways 2013: What Options Does a Business Have?

[heading]Payment Gateways 2013: What Options Does a Business Have?[/heading]

Although Bitcoin has stolen headlines in 2013 as far as online payments is concerned, it is hardly the only option. Instead, consumers are the winners in the highly competitive market of online payments. Especially since the emergence of decentralized currencies, online payment processing – once thought to be the domain of PayPal – is a colorful world.  Here is a basic primer of online payments.

  • ACH payments are highly convenient electronic credit and debit transfers, which allow customers to make payments from their bank accounts, mortgage loans and other types of bills. ACH payment is shorthand for Automated Clearing House and is a popular payment option, especially for monthly and subscription-based transactions.  Most payment solutions use ACH to send money (minus fees) to their customers.
  • merchant account allows customers (merchants) to receive payments through credit or debit cards. One inconvenience of this is that merchant providers are required to obey strict regulations established by card associations, and oftentimes (especially in the US) these fees runs high.
  • payment gateway enables merchants to securely pass credit card info between the customer and merchant and between merchant and payment processor. Think of the payment gateway as the middleman between the merchant and their banks
  • payment processor represents the company a merchant uses for credit card transactions. The processors implement anti-fraud measures to ensure that both the front-facing customer and the merchant are protected.
  • PCI compliance is the merchant or payment gateway setting their payment environment up in a way that meets the Payment Card Industry Data Security Standard (PCI DSS). The PCI DSS standard was designed by the Payment Card Industry Security Standards Council to increase cardholder data security and to reduce fraud.
  • Decentralized Digital Currency: Numerous such currencies have popped online. The one that would work best for your business is most likely Bitcoin.

Online Payment Options:

1. Authorize.Net


As the world’s most widely used payment gateway, enjoys a user base of more than 300,000 merchants. E-commerce platforms such as Magento,Volusion and X-Cart are designed to accept payments using

Pricing:  There is a $99 setup fee for, and it costs $20 per month and takes $.10 per transaction.

See:  Authorize.Net pricing

2. PayPal


As the world’s most used payment acquirer, PayPal processed more than $4 billion in payments in 2011. PayPal payments require using a user’s account with money in it or a credit card. Money can be sent directly to an email address. PayPal also enables its users to send money through the service.

Pricing: PayPal’s cut is 2.9% + $0.30 per transaction and operates sans setup or monthly fees. Source: PayPal merchant fees

3. Google Checkout

Google Checkout

Google naturally wished to get into the space of payment processing, as its business plan has seemed to move into numerous aspects. With Google Checkout, users can pay for goods and services through an account connected to their Google profile. A major plus of Google Checkout is the millions of users who have signed up for Google’s other services, from G-Mail to YouTube.

Pricing: Google Checkout takes 2.9% + $0.30 per transaction for sales under $3,000. Their take decreases depending on monthly sales volume. Source: Google Checkout fees

4. Amazon Payments

Amazon Payments

With Amazon Payments, users can receive money using its API (and to send money out via ACH).  Kickstarter uses Amazon Payments.

Pricing: Amazon Payments takes 2.9% + $0.30 per transaction for payments more than $10 (the percentage they get is less for larger transactions). For payments under $10, the fee is 5.0% + $0.05 per transaction. Source: Amazon Payments fees

5. Dwolla


Dwolla competes directly with PayPal. Dwolla is a n00b to third-party payments, and is processing currently $1 million per day. Dwolla is similar to PayPal, however it doesn’t have PayPal’s name recognition. Dwolla did gain much press by accepting Bitcoin for a time, but ran into problems with AML and KYC guidance alongside Mt. Gox. Source: Dwolla fees

6. Stripe


Stripe receives great reviews for its payment solution, which allows web developers to integrate a payment system into their projects using Stripe’s API. Stripe bypasses the traditional sign up process and acts as a merchant account for providers, including PCI compliance and merchant approvals.

Pricing: Stripe takes 2.9% + $0.30 per transaction and operates sans setup or monthly fees. Source: Stripe: pricing

7. Braintree


Braintree is an online payment gateway and merchant account solution which works with popular tech startups such as Airbnb and LivingSocial.

Pricing: No setup fees nor monthly, with transaction fees of 2.9% + $0.30 per transaction for qualified cards. Learn More: Pricing – Braintree

8. Samurai by FeeFighters

Samurai by FeeFighters

As a payment gateway and merchant account solution all in one, Samurai has found success, in particular with their main product,  FeeFighters, designed to help merchants compare rates for merchant accounts. Samurai was developed as a direct competitor to Braintree and other gateway/merchant solutions and offers customers a payment gateway or a gateway/merchant account package.

Pricing: For their gateway/merchant solution, Samurai receives 2.3% of all sales volume, costs $25 per month and charges a $0.30 fee per transaction. Learn More from:Samurai by FeeFighters pricing

9. WePay


A payment process allowing internet merchants to accept credit cards and bank account payments online, WePay is focused on the individual user and has recently added e-store pages to their service to help customers conveniently receive payments, including event tickets, products, donations and so forth) through the service.

Pricing: WePay takes a 3.5% transaction fee (with a $0.50 minimum) for credit card transactions and $0.50 for bank payments, with no setup or monthly costs. Learn more from: WePay fees

10. 2Checkout


Another payment processor combining merchant account and payment gateways into one, 2Checkout allows customers to receive credit card payments and PayPal payments, offering international payments, shopping cart stores as well as recurring billing.

Pricing: 2.9% transaction rate and a 30 cent transaction fee. Pricing and fees – 2Checkout

11. Bitcoin


Then there is Bitcoin, namely through Bitpay. First things first, Bitcoin is its own payment unit and processor. This means that one receives payment in a digital unit with a finite supply. Now, many merchants worry they cannot use Bitcoin to pay their distributors. But, that’s where Bitpay comes in. This website allows a merchant to receive Bitcoin, then have Bitpay exchange it for USD or another currency

Another payment processor combining merchant account and payment gateways into one, 2Checkout allows customers to receive credit card payments and PayPal payments, offering international payments, shopping cart stores as well as recurring billing.

A great misconception about Bitcoin has arisen in the past months. Namely, that it is a place to launder money. Many bitcoiners claim this is impractical. Bitcoin, they claim, is not “anonymous,” not like cash is.

Pricing: .99% ACH to personal bank account to 17 countries. See: Bitcoin DIrect Deposit.

What about Payments through Mobile Devices?

The following two payment services make it so that merchants may accept credit card payments directly through mobile devices. This means devices such as the iPhone, the iPad and Android smartphones to act as a mobile point of sale (POS) checkout system.

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