Choosing a Payment Gateway

Choosing a payment gateway for your business can be a little overwhelming.  There are simple options like Paypal and Google Checkout that take just a couple minutes to setup and then there are more robust solutions from service providers like authorize.net and stripe.com.

The rates fall into two categories.  Providers like Paypal and stripe.com charge approximately 2.9% per transaction + 30 cents.  The motivating factor in these solutions is that there are no monthly fees which make it an economical choice for startups, season events or lower revenue stream clients.

Solutions like authorize.net charge between $25-$45 a month plus your per transaction fees ranging from 1.8%-2.8% percent.  The rates actually depend on what card the customer is paying you with.  Debit cards run at the lower end of the spectrum whereas a Capital One Mileage card would run closer to the 2.8% side of things.  authorize.net is provided as a direct service from, or it can be purchased through your existing bank with their merchant services account.  The biggest aspect of authorize.net is that it integrates with just about every ecommerce platform or payment solution out of the box (or at a very low cost).  Some of the proprietary solutions from banks require extensive custom coding to integrate and that usually outweighs any fee savings between the two providers.

Our suggestion?  stripe.com is our preferred payment provider.  They provide single and recurring payments at a very low cost and integrates with most platforms.  Their platform is very easy to work with and is generally easier for customers to sign up. It takes about 3 minutes to setup your account versus 1-2 meetings with your local bank’s representative.  There is a point at which the .5%-1% per transaction savings will make a difference by using a solution like authorize.net though and that is generally around $35,000 in annual online sales where it starts to break even.  

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