28 Aug PayPal, Stripe or payment gateway?
If you are opening an online store, one of the big questions you will need to answer is how are you going to get paid. Should you use a third party payment provider like Paymate, PayPal, Stripe, or Paymex, or instead should you use a payment gateway like eWAY?
What’s the difference between them and what are the benefits? Here’s how they work.
Third party payment providers like PayPal, Stripe, Skrill, Paymate, among others
- When customers go to make a payment they are redirected from your store to the PayPal site to accept payment.
- Your customers either need an account with the or can enter their details manually as they go through checkout.
- Once customers pay they redirect back to your store to finish the order.
- The benefit to you is that you don’t need to be as concerned about credit card security: the collection of credit card details and processing of them is handled by the Paypal website.
- The downside is that customers need to click ‘return to your store’ after they make a payment for your order information to be updated. If they just close Paypal you will receive the money but not know what has been ordered. You will then have to try and contact the customer or wait for them to contact you.
Payment gateways like eWAY
- When customers go to make a payment they stay within your site. Your site collects their credit card details and passes them securely to your payment gateway provider, like eWAY. The payment gateway provider processes the payment and contacts your merchant provider (your bank) to deposit the money in your account.
- The benefit to you is that your customers don’t need to be redirected – they stay within your site.
- You will need an SSL Certificate on your website in order to encrypt credit card information when it is sent to the payment gateway provider and you will also need to ensure that your web hosting provider has a PCI DSS Compliant server environment if you are to meet the requirements of Visa and MasterCard. For example, Ozcart ecommerce packages are hosted on high performance shop-optimised servers that are maintained in a PCI DSS Compliant environment and tested for compliance by security company Comodo.
It depends on your budget and objectives as to which option is best for you. In our experience we prefer to use secure sites rather than be redirected to PayPal. Think about what you prefer as a customer? What would your customers prefer?