Introduction
The internet offers a lot of convenience. People can order their food, clothes, and even furniture online instead of going to the store. But when it comes time to pay for those goods and services, your customers need an easy way to pay you. Enter payment processing — the process by which you accept credit card payments online (and sometimes offline). While there are several different ways for small businesses to handle payment processing for e-commerce transactions, this article will focus on Stripe vs PayPal as both are popular options among small businesses and merchants alike.
A Payment Processing Overview
Payment processing is the process of accepting payments from your customers. It’s important to understand how e-commerce works, so that you know what to expect when it comes time for your business to accept credit cards online.
When a customer buys something from you, they’ll be directed through a series of steps until they reach checkout and submit their order. These steps are called “processing” since they happen in order:
- Customer selects items for purchase and adds them into their cart (or wish list)
- Customer goes through an account setup process if necessary (e.g., creating an account with PayPal or Amazon Payments)
- Customer provides payment information, such as credit card number, expiration date, CID code (CVV2), etc., which gets stored securely by the payment processor on behalf of both parties
Choosing a Merchant Account Processing Company
Choosing a merchant account processing company can be tricky. There are many options available to you, but not all of them are going to be right for your business. The first step in choosing the right processor is to find one that has a good reputation and offers competitive pricing.
When looking at different processors, look for those with 24/7 customer service as well as multiple payment processing options such as credit card payments, e-checks and ACH (Automated Clearing House) transactions. Additionally, make sure they don’t charge any monthly fees or require any long-term contracts before signing up with them!
What you can charge and who can pay online
The first thing to know is what you can charge and who can pay online. You may be surprised to learn that the answer isn’t always “whatever they want.”
Let’s say your business sells widgets, and you want to sell them for $100 each. That’s fine, but if your customer wants to pay with a credit card, their bank won’t let them enter in a purchase amount of more than $99 (plus tax) on their own–they’ll have to call customer service at their bank or go through some other process instead. So if you’re selling something for more than $99 and want people who use credit cards as payment options, then this is something worth thinking about before setting up your store!
Another thing worth considering: who pays online? If most of your sales come from local customers who don’t have access to internet banking but do have smartphones and/or debit cards, accepting electronic payments might not make sense at all since those customers will probably prefer paying by cash anyway!
Stripe vs. PayPal — Which is better for small businesses?
Stripe and PayPal are two of the most popular payment processing options for small businesses. Both services offer a wide range of features, but they differ in some key ways. Here’s a comparison:
- Stripe has lower transaction fees than PayPal (2.9{b863a6bd8bb7bf417a957882dff2e3099fc2d2367da3e445e0ec93769bd9401c} vs 3{b863a6bd8bb7bf417a957882dff2e3099fc2d2367da3e445e0ec93769bd9401c}).
- Stripe offers more flexibility when it comes to invoicing and payment terms; you can set up recurring payments, invoice customers automatically based on their usage history, split payments among multiple accounts or send invoices via email.
- Stripe’s API is much easier to use than PayPal’s — if you know how to write code then you can integrate Stripe with your website without needing help from anyone else!
You need to know the basics of how e-commerce works if you want to sell products online.
You need to know the basics of how e-commerce works if you want to sell products online. This includes understanding payment processing, which is an important part of any e-commerce business.
Payment processing refers to the process by which you accept payments from customers. There are two main types of payment processing: traditional and digital (also known as card not present transactions). Traditional means accepting cash or checks in person; digital means accepting credit cards online or over the phone by phone number verification only–no name or address required. Both types have their pros and cons depending on your preferences as well as what type(s) of customers you’re targeting and how much risk they represent for fraudsters who might try stealing money from your company account through fraudulent charges made using stolen credit card information.
In addition, there are many different providers offering these services including Stripe (the most commonly used), PayPal (the oldest), SquareUp (which specializes in smaller businesses), Braintree Payments (owned by PayPal but built specifically for startups), Shopify Payments etc…
Conclusion
Payment processing is one of the most important parts of running an online store, but it doesn’t have to be complicated. The key is understanding what you need and finding the right company for your business. Whether or not you use Stripe or PayPal depends on whether they are available in your country and what features they offer (or don’t). If neither of these options works for you then there are plenty more out there!
