A Payment Service Provider (PSP) is one of the most crucial parts of your e-commerce infrastructure. It enables any company to receive payments in a hassle-free manner. Thus, it becomes essential to choose the right PSP. If you’re looking to start an eCommerce business and are wondering what PSP to go for, you’ve arrived at the right place. In this article, we look at some of the best PSPs in the market, the factors you must consider before choosing a PSP, a few common questions about PSPs, and more.
The quality of any good payment service provider depends on several factors. These also help business owners such as yourself determine which PSP to opt for.
Pricing is one of the key defining factors in a PSP. While most of these charge a fee of 2.59% + 49c, it is important you look at the payment structure of the PSP and ensure it aligns with your budget.
A recurring bill is associated with an online business that offers subscriptions. The customer needs to make the payment multiple times at regular intervals. If your eCommerce business will have any such subscription-based products/services, choose a PSP that possesses the Recurring Bill feature.
For businesses that transcend geographical boundaries, multi-currency support is imperative. Find out which currencies are supported by the platforms. If the desired currency isn’t there, choose a different PSP. For instance, countries like Germany do not use the PSP Stripe. As a result, if your major customer base is in the said country, you can opt for another platform specific to the region.
Any platform you choose must have good customer support. This ensures that if and when there’s an issue with the PSP, the support team will quickly address and solve the challenges. One of the ways to know about a platform’s customer support is to check user reviews. However, you can also test the team’s acumen by contacting the support staff with queries as a mock customer.
The cybersecurity around PSPs must be of the highest level. Since people use the service to pay money, the PSPs handle their most confidential details. As a result, it is imperative to have a cybersecurity infrastructure and multiple contingency plans to prevent and mitigate external threats.
Overall, these are a few factors you must consider as an eCommerce store owner while choosing a PSP that aligns with your needs and goals.
| Name/Factor | Setup Fees | Monthly Fees | Transaction Fees | No. of Countries | No. of Currencies |
| PayPal | $0 | $0 | 2.9% + 30c | All | 25 |
| Braintree | $0 | $0 | 2.9% + 30c | 8 | 130+ |
| Stripe | $0 | $0 | 2.9% + 30c | 46 | 135+ |
| Square | $0 | $0 | 2.75% | 6 | 6 |
| WorldPay | $0 | $0 | 3.25% + $0.40 | 146 | 120 |
| Adyen | $0 | $0 | 3.3% + 22c | 60 | 30+ |
| Authorize.Net | $49 | $25 | 2.9% + 30c | 5 | 6 |
| PayPal Payflow | $0 | $25 | 0.10c | 4 | 24 |
A payment processor can be considered a subset of a payment facilitator. While the payment processor helps merchants accept payments from users, a payment facilitator helps merchants group all payment-related services, such as invoicing, payment processing, and more, under one platform.
A payment aggregator is a third-party app that connects multiple merchants to their respective payment processors. On the other hand, a payment processor is simply a tool that enables any business to send and receive payments to and from its users.
A merchant acquirer is an intermediary between a merchant and a payment facilitator. While the latter deals with payment-related services, the former deals with all services a merchant would require while conducting any transaction. These include managing merchant accounts, authorization of transactions, settling funds, and more.
While the traditional approach requires business owners to have a merchant account, it is possible to accept user payments without having one. You can instead use payment service providers and cut down a large chunk of intermediary cost that comes with owning and managing a merchant account.
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