How to Select an Online Payment Service Provider


About This Guide

This article is a free resource developed by Wild Apricot. If you'd like to know more about how online payment services work, check out our other online payment article: Understanding Online Payment Services.

Once you decide to begin accepting online payments on your website, the next step is choosing a payment service that meets your needs. There are many payment service providers out there, with some offering multiple payment services or systems.

Fortunately, there are several important differences between the various online payment systems. To help you narrow down your options, here are some criteria to use in determining which service is a good fit for you.

Table of Contents

Are they compatible with your existing site software?

First and foremost, you need to figure out which payment systems are supported by any third-party software that you use on your website, like Wild Apricot, Shopify, or Cvent. If they’re not compatible with your existing setup, you won’t be able to use them without changing your software.

Do they support merchants in your country?

Another easy way to chop down your list of possible payment partners is to eliminate those that don’t support organizations operating in your country. Several payment providers such as Authorize.Net, BluePay, Global Payments, and Moneris require you to have a merchant account in the United States or Canada, and Google Wallet is available only to merchants in the US. If your organization is based in the UK, then you can count Shrill, IATS, and PayPal among your options.

Do they support the currency you want to use?

If the members and supporters of your organization are concentrated in a particular country, you should make sure the payment providers under consideration support the currency you want to use in your transactions. Most support a wide range of currencies, but BluePay and Global Payments support only US and Canadian dollars, while Authorize.Net and IATS support British pounds as well. Google Wallet supports only US dollars and British pounds. In contrast, 2Checkout, Moneris, Shrill, and PayPal all support dozens of different currencies.

What kind of fees do they charge?

Now that you’ve cut down your list to a manageable size, you should start comparing the fees charged by the different payment systems.

All payment service providers charge a fee per transaction. Some payment systems also charge a monthly fee (Authorize.Net, Moneris, PayPal Payments Advanced & Pro, PayPal Payflow Pro), as well as a setup fee (Authorize.Net, BluePay, Moneris).

The transaction fee can be a flat charge and/or a percentage of the transaction value. For example, PayPal typically charges a fee of $.30 per transaction plus somewhere between 2.2% and 2.9% of the value of the transaction. A transaction with a face value of $100 would cost you between $2.50 and $3.20 to process, depending on the number of transactions your site processed that month.

What kind of transaction volume do you expect?

Which brings us to the next factor to take into consideration: how many transactions you expect your site to handle in a month. The percentage fee charged by payment providers is typically a sliding scale that decreases as the number of transactions increase. So, depending on the volume of transactions processed, one payment system might suddenly make more financial sense than another. If your expected transaction volume is low – say, less than 15 per month – consider a provider whose scale is the lowest at the top end, like PayPal or Google Wallet (2.9% each) rather than Moneris (3.5%) or 2Checkout (5.5%). If you expect to be handling a high volume of transactions, look for the lowest rates at the bottom end of the scale, like Moneris (1.8%) and Google Wallet (1.9%).

Where do payments take place?

The payment systems that charge setup fees typically allow you to process online payments at your website. The other payment systems will transfer customers to their website where the payment is processed and their services are advertised. PayPal, for example, uses their online payment form to aggressively promote the use of PayPal accounts while still permitting the use of credit and debit cards.

It may or may not be important to you to provide visitors to your site with a seamless, one-stop experience.

What kind of payment mechanisms do they support?

Another important difference between payment systems is the kind of payments they accept. Most systems allow your customers to use their credit cards – some support Visa and Mastercard but not American Express – and some allow them to use debit cards. With PayPal systems, the payer can choose between using a credit card or their PayPal account. Google Wallet, however, requires purchasers to sign in using a Google Wallet account, something your customers may not already have.

Do they support recurring payments?

Most but not all payment systems support recurring payments – the ability to automatically charge fees on a regular, repeating schedule. For example, recurring payments are not supported by Global Payments, Google Wallet, or PayPal Payments Advanced, and may not be supported by third-party software you use to handle transactions on your site. Keep this in mind if you want membership fees to be automatically renewed and paid without any effort on anyone’s part.

Do they focus on small and/or non-profit organizations?

Some payment providers specialize in providing support for different kinds or sizes of organizations. IATS, for example, provides both a merchant account and a payment gateway service exclusively for non-profit organizations. Others, like Google Wallet, allow you to process tax-exempt donations, something not all payment systems can do. PayPal offers several different payment systems – Standard, Advanced, Pro, Express Checkout, and Payflow Pro – with different features and pricing for different sized organizations.

What other features do they offer?

Depending on your needs, you may be interested in additional features such as anti-fraud protection and chargeback management. Some features like these come at a price, either an additional fee or a higher percentage rate.

There are, of course, many other factors to consider when choosing an online payment partner, including the level and quality of their support, how many years they have been operating, and their overall reputation in the industry. Also, with some payment systems, the process of opening an account can be complex and time consuming.

However, the most important considerations continue to be:

  • Do they support organizations located in your country?
  • Do they support the currency you want to use in your transactions?
  • What kind of fees do they charge?
  • What volume of transactions do you expect on your website?
  • Are payments are processed on your website or theirs?
  • What kind of payments do they accept?
  • Do they support recurring payments?

Hopefully, we’ve been able to help you narrow your choices and make an informed decision. To help with your selection, we've created the Payment Service Selection Checklistan Excel spreadsheet that you can download and use to evaluate up to 5 different payment systems (xlsx, 56k).

If you’re using Wild Apricot, you can view a detailed comparison of the payment systems we support.

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How to Select an Online Payment Service Provider by Wild Apricot is licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Unported License. Based on a work at www.wildapricot.com.

Please include a link to http://www.wildapricot.com/articles/how-to-select-an-online-payment-service-provider if you copy, distribute or re-transmit any of the documents that make up this guide. For permissions beyond the scope of this license, contact us.

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