Paypal, Google Checkout, Amazon…Which Payment Service Should You Use?

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Recently diving into e-commerce, I needed to find the best service with the lowest transaction costs for my clients and for my own company. Instead of becoming overwhelmed with all of the choices, you should look into these great services from more the more popular companies out there.

  • Paypal has a $10/month fee to use their basic service, where they would handle all transactions, including yearly billing. They also charge approximately 2% + $0.30 per transaction. This option is $20 less per month than the Paypal integrated service, but users would be directed off your website during their initial sign up.
  • The integrated Paypal service is $30/month + the above transaction fees (approx. 2% of sale + $0.30/transaction) but users would stay on your website throughout the entire signup process. Of course, this would require you to work with the Paypal API and purchase a Secure Socket Layer (SSL) certificate for your site. In the end, if you are not doing a lot of business online, this may not be your best option.
  • Yahoo! e-commerce has a $50 setup fee, $39.95/month, plus 1.5% transaction fees. I stopped at the home page after seeing how expensive it was.
  • Amazon has a new beta service called FPS (Flexible Payments Service) that is accepting a limited number of merchants. They are very inexpensive and can handle transactions as low as a penny. Of course, you would have to apply for the service before you’re serious about this option.
  • Google Checkout is the best service for the money in my opinion. I have used this service for my clients before and it is very inexpensive, easy to integrate, and comes from a trusted place, Google! The transaction costs are free for the first year! After that they charge 2% + $0.20 per transaction. I think this is a very good deal. It also integrates seamlessly with Google Adwords if you ever choose to do keyword campaigns in the future, and the free transactions for a year gives new businesses an opportunity to grow faster.

Along the research process, some other options like Authorize.net and Simplepay came up, which seem like good services but require a large setup fee ($200 for Authorize.net) and are geared towards businesses that charge over $2000/month. If you are just starting out with an e-commerce site, you should probably begin with a different service to keep transaction and processing costs to a minimum.

In conclusion Google Checkout is the best overall value in my opinion. No extra software like PHP-Paysite is required, it is very simple to integrate (coming from experience), and the transaction costs are very low (not including the free first year). With Google Checkout, you can choose to direct users off your site for payment processing, leaving Google with most of the liability for the transaction. This is a very cost-effective way of selling online. And of course, if you want to create a seamless experience for your visitors, you can integrate Google Checkout with their API.

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Daniel Errante

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By Daniel Errante

Daniel Errante

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Quickly communicate covalent niche markets for maintainable sources. Collaboratively harness resource sucking experiences whereas cost effective meta-services.

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