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Top 3 Payment Processors: The Pros and Cons

About 50 percent of all online consumers will walk away from a purchase if their favorite payment method isn’t accepted. The checkout process needs to be user-friendly, if not it will take a toll on your conversion rates. Online retailers tend to channel their efforts into boosting traffic in an effort to increase sales. However, it is far more effective to direct some of that energy toward maximizing the number of payment choices you offer finicky online shoppers. This will, in turn, optimize your conversion rate and reduce the frequency of shopping cart abandonment. It is much easier to double the number of sales you generate from existing customers, rather than attempting to gain the same amount from first-time visitors to your website.

Build Long Lasting Relationships by Providing Your Customers with Multiple Payment Gateways

An online retail site that offers multiple payment options is appealing to shoppers because it simplifies their experience. If an e-commerce website is too difficult to navigate or if too many obstacles are in place, the checkout process may become too problematic. The dominant payment sources for online purchases have always been credit or debit accounts. However, not everyone owns a credit card and some shoppers don’t care to use one for online transactions. At this point in time with all of the protective measures in place, many consumers are more at ease using their personal credit or debit information to shop online. But breaches of security and fraudulent activity still occur quite frequently leaving some e-commerce shoppers very cautious. Regardless, some people simply prefer to pay with alternate methods.

Since providing a seamless checkout process is so important, it is vital for you to select the top payment processors available for customers who shop at your online store. When determining the right payment processors for your site first do some research and ask yourself the following questions:

Will This Payment Gateway Improve the User Experience at Checkout?

  • The best payment options will enhance the checkout experience by speeding up the process and wiping out unnecessary steps. Time-saving methods like Amazon Payments and PayPal Express use an API to auto-fill some of the customer’s information. Always look for fast, easy and seamless gateways to increase the likelihood that the transaction gets completed. When checkout is painless customers will make purchases and they are much more likely to return to your site. A small five percent increase in customer retention can boost profits by a whopping 95 percent.

Does This Payment Processing Method Mesh with My Site Platform?

  • Keep in mind you may need to make expensive adjustments to accommodate payment gateways that don’t have the right plugins or applications required to work with your platform. Custom development will cost you precious time and a lot of money that might be better spent in other ways.
  • In addition, it is hard to streamline highly customized checkout applications across all channels. For instance, if your team creates some sort of specialized connection between PayPal Express and your gourmet food shop, making sure that the checkout process performs without incident across multiple devices will require a lot of custom development and resources. The better option is to choose pre-built solutions that have already been tested. Most payment processors are integrated to operate on newer platforms. If the gateways you select don’t work well with your current platform, it might be time to upgrade.

How will This Payment Solution Enhance Business Growth?

  • In this age of fast technological growth, the payment processor needs to keep up to speed as your business expands. With so many consumers using popular social media platforms, it is important to know where your target audience begins to show the highest levels of engagement. If you find that your target demographic likes Twitter, wouldn’t it be great if they could browse and purchase your products without being directed off site?
  • Stripe is a payment solution that has recently launched the Relay. This innovative product eliminates the need for irritating redirects by allowing shoppers to make purchases directly from a tweet. Businesses that utilize Stripe or similar payment gateways, and frequently launch new, exciting products, can rest assured they are moving in the right direction.



The Pros and Cons of Top Payment Processors

Once you have a grasp on all the necessary factors, it is time to explore the options that are available and compare the pros and cons of three of the top payment processors.


One of the most popular online payment solutions around is PayPal. The enormous success of eBay, its parent company, and its prominence on Amazon has made PayPal a powerful force in the industry.

The Pros

  • PayPal is not only used to pay for goods and services, it is also used to process debit and credit card payments.
  • Another advantage of choosing PayPal is the easy setup Account authorization is completed almost immediately. This secure method is simple for even the least tech-savvy person to use.
  • Your customers with a personal PayPal account have access to a quick no nonsense payment method.

The Cons

  • PayPal is a great ally for buyers, not so much for sellers. Proceed with caution and choose your customers wisely. The straightforward setup process has made PayPal a haven for fraudulent sellers. PayPal fraud protection services are extremely prudent when it comes to matters of suspicious activity and buyer disputes.
  • It is simpler to weigh on the side of the buyer and issue a refund, rather than conduct an investigation for every dispute. Customer service has a reputation for offering little help and can be difficult to convince during difficult times.
  • PayPal merchants often complain that buyers are coerced into opening a PayPal account adding a negative layer to the payment process.


World Pay

Another heavy hitter in the American payment industry is Atlanta-based Worldpay.

The Pros

  • WorldPay offers 3D security and PCI DSS compliance so you know that your customer’s personal information is safe. They also conduct fraud screening to protect you from accepting fraudulent payments.
  • Rates decrease when volumes are high, this can equal significant savings for big businesses.
  • Multiple currencies and cross-border payments are accepted.

The Cons

  • Although WorldPay promises a fast turnaround, this payment processor is well known for large transfer delays. It can sometimes take more than four weeks to access your money.
  • Along with standard monthly fees, WorldPay charges other fees like the annual PCI compliance management fee and monthly trading volume. All of these costs add up, especially for small businesses.
  • Service costs differ by industry and tend to vary in favor of more successful retailers. Carefully review all of their set terms and conditions to fully understand the actual fees involved.
  • Recently WorldPay had gotten some bad press regarding a change in a Visa interchange fee, used to mask an unrevealed price hike.



Stripe burst on the scene in 2010 knocking the wind out of PayPal. A fresh, innovative approach, Stripe made payments interesting. The company has made quite a name for itself in a very short time span. In only six years Stripe has risen as one of the top payment processors in the industry.

The Pros

  • Stripe is a great tool for tech-savvy It was designed for developers and can be used to perform great tasks. When in the right hands, Stripe is an invaluable tool.
  • The opportunities that Stripe offers make it a great choice for your payment processing if you have a dedicated tech-minded person to manage all the details and make the necessary changes.

The Cons

  • With Stripe you are more open to receiving fraudulent payments. The main reason merchants stop using Stripe is because the system is not 3D secure and at some point, they had become victims.
  • With Stripe, you will need to conduct a self-assessment to make sure you are PCI compliant. PCI DSS is a rigid set of rules that all businesses who manage personal cardholder information must follow. Other payment processors take care of this step for you.
  • Developers may spend many hours adjusting the functionalities and it can get to be very costly. If you don’t have an advanced knowledge of coding it might be simpler to take the cheaper way out. Having to hire a developer will complicate things.

Final Word

This is only a short list, there are many more payment processors available such as ACH payments, Authorize.Net, Google Wallet and more. Remember to do your due diligence and select the right payment solutions for your website. It will pay off greatly in higher conversion rates and more repeat customers.

Lastly, let me know your thoughts and what other tips for payment processors that has helped you. Leave a comment below and I look forward to hearing from you.

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About Sean Donahoe

Sean is one of the most recognized industry leaders in business and marketing. As a popular speaker, author, consultant he has helped over 50,000 students world wide find success in their businesses and has consulted with Fortune 500 companies and businesses of every size grow and thrive...


  1. Are there any statistics on which payment processors consumers prefer to use?

    • Customers generally don’t care about your processor as it’s seemless to them but giving them options always helps. For example, always have Paypal as an option, make shopping as easy as possible.

      • But doesn’t your opening sentence “About 50 percent of all online consumers will walk away from a purchase if their favorite payment method isn’t accepted.” contradict what you just replied? Wouldn’t I want to know which processors they use so I can make sure my business can support those processors, or is it easy enough to support all of them? Is “method” the same as a processor?

  2. Check out Braintree. They are fastly becoming a go to for entrepreneurs across the globe. You can process up to $50,000 of transactions without any fees whatsoever. Great for those who are starting out or have low billing in their businesses.

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