Accepting Payment Online
A few years ago there was not much choice when it came to selling online – PayPal virtually ran the industry and many people were forced to use them because there just were not many choices. But a few years ago this industry of online payment providers began exploding and now there are more options than you have fingers! Way more.
For a number of years we’ve been using a Business/Pro account in PayPal ourselves to accept online payment of our invoices – not selling anything – just accepting payment online, to make it easier for our customers. But over the past number of years we’ve questioned the value that we were getting as well as the customer service.
So a few months back we switched and traded PayPal for two popular payment gateways, Stripe and Square. The grass was not much greener on that side of the fence though. So we did some more research, built a key partnership and have switched again. Hopefully for the last time.
We know many of you (including our current and potential clients) have wondered what the best setup is. We know this because you ask us all the time. While it hinges on a lot of different items, we want to tell you what we’ve found – so you can make a more informed decision on your own. We’ve partnered up with Beanstream and are pretty excited to tell you what we can do for you as a result!
Evaluating Payment Providers
This is not by any means an exhaustive treatment of online payment providers. In fact I’m really limiting my discussion here to just four of them, that we have dealt with as a business.
If you want to start doing research on all the possible options – click here ( I just Googled “Online Payment Gateways”).
We have the most history with PayPal. We’ve had an account with them for a number of years. Eventually that account morphed into a Business or Pro account. We had to do that because we wanted the options that PayPal only offered with this type of account, mainly the ability to take payment over the phone (not just online) through what they call a Virtual Terminal. But this minor step bumped our costs up significantly – adding $35 per month, every month, whether we used it or not to the percentage-based fees we were already paying.
Since we had been with PayPal so long, our company and staff had changed significantly too. We could easily change our business name within the account, but do you think we could have the name of the person who signed up for this account (an employee who no longer worked for us) changed? No way – we tried on multiple occasions – first by fax, then by email, gathering utility bills, banking letters, personal identification etc all so we could prove to PayPal that the name they had on file was no longer current. This was quite frustrating.
Throughout multiple attempts to contact for various other seasons, we consistently found it nearly impossible to get real people on the phone to help us out with account issues or questions.
Then there were the fees. Every business wants to make it easy for their clients to buy or pay for goods or services. After all, that’s just smart business. However at some point, all business owners need to carefully examine at what this costs these services are offered. When the amount of revenue brought in through these online payment gateways no longer justifies the cost of the services associated, every business owner is left scratching their head – wondering how to solve this problem.
We came to that point too. When we factored in the revenue we collected online, the costs of the services like PayPal required to do that and the lack of customer service we received from them, we came to the logical conclusion that it was time for a change. So we closed our PayPal account – and frankly, we haven’t missed it.
One of the solutions we employed to help replace PayPal was a service called Stripe. We had used it before for a little project and had found it efficient, easy to setup and the biggest advantage for many businesses is there is no monthly fees. You only pay Stripe a percentage on transactions that you complete. It’s the standard 2.9% plus 30 cents per transaction. This was the same transaction rate we payed with PayPal but the savings was the $35 monthly fee and getting behind a company we believed in more.
It’s also very developer-friendly (for whomever is actually integrating it with your website) and can be setup in literally minutes with very little waiting. The downfalls we found with it were twofold; the reporting was not as complete or as easy to read as PayPal’s and it offered nothing for over-the-phone transactions or call-ins. This can be dealt with easily enough for simple product offerings – if you as a business just handle phone call payment requests by navigating to your own payment page and filling in the online form with your client. But it doesn’t offer a solution for in-person or over-the-phone payments for more complex orders like an ecommerce orders of multiple items. We wanted to do be able to take credit card payment in-person as well as online and over the phone. So we employed a second payment gateway provider called Square.
If you’ve ever bought something and the vendor passed you their smartphone with a small white square plugged into it – and asked you to sign with your finger – then you are familiar with Square. Square looks pretty amazing as a service. But it only handles in-person (called P2P in the industry) payments and doesn’t handle online payments or ecommerce like Stripe did. So that’s why we decided to try out the hybrid model of both Stripe and Square. We were hoping that two totally different providers who seem to be market-leaders in their respective areas would form just the right team for our business.
Square had a more complex pricing schema. If we entered client’s info with a physical card by swiping it through the reader we saved a bit from the competitors – paying 2.65% of the transactions. But if we had to key in the card, taking the payment over the phone – the rate jumped way up to 3.5% plus 15 cents per transaction. We see very little foot traffic in our office, wanting to pay invoices with a physical card so this was a case of asking was the service being offered worth the cost?
Stripe sent us a cool little gadget and stickers for our office windows etc. It was a nice little startup package. The interface of the software was nicely styled and kinda neat. But this is where the benefits ended for us. Actually keeping track of who in the office had that cool little Square thingy as well as fumbling in front of a client to plug it into your phone (which incidentally won’t generally plugin at all if you have LifeProof or Otterbox Phone case) and then run through the process of identifying which product it was, what invoice it was tied to, what the taxes were etc. proved to be cumbersome and embarrassing. Not to mention the confusing sales dashboard Square has behind the scenes and severe lack of useful reporting options.
We tried to make it work but we essentially went from being unhappy with PayPal to being unhappy (for different reasons) with Stripe and Square. That’s when a client came in with an idea for a new ecommerce site and really asked us to dig in and do our homework on what the best payment gateway option was for his store.
My research led me to Beanstream (which we had dealt with before years back but for whatever reason had slipped off our radar in more recent years). I got in touch with a rep, dedicated to our company who walked me though the login, the dashboard, and all the information we had at our fingertips. We got the virtual terminal for call-in payments as well as Beanstream-hosted secure payment form. It was pretty quick and easy to setup. Our payment form is actually far simpler than it ever used to be and it is all under one roof, with one login, a simple-to-read admin area and real financial savings. Beanstream also offers different payment structures for businesses to match their model – so you can pay no monthly fee and a higher percentage rate or drop the percentage altogether and pay some minimal per transaction fees plus a base monthly flat amount. We think its a great solution and we’re looking forward to working with them.
To be fair there is a downside to Beanstream as well. You need to have some leeway because you need to fill out an application and send it in to them and it will probably take a week before they have confirmed your business info with a Merchant provider and you’ve passed the PCI compliance requirements etc etc. It’s not onerous or cumbersome but it is more of a startup process and can certainly take some time.
For now, we’re going to evaluate it from the side of being partners with Beanstream and account holders. If it ends up not being the partnership we think it will be – we’ll be back to update this post and let you know.
If you are interested in switching your current payment gateway for a website or online service you charge for or are looking for the best option when setting up a new ecommerce-enabled business website – come on in and chat with us. We’d love to discuss all this with you further.