As a business owner, you need a way to collect payments that is easy for both your customers and your business. But collecting in-person payments can be challenging, especially if you manually accept cash or rely on checks. These payment methods are time-consuming and are not secure, leaving you vulnerable to theft. In some cases, they can also be inconvenient for customers.
One way to resolve these issues is to use payment processing software. Payment processing software lets you accept additional payment methods, such as credit and debit cards and digital wallets. It also streamlines various financial processes like invoicing and billing, making these more manageable as your business grows.
Podium’s payment tools have helped numerous businesses improve their workflows and drive more revenue. It is an excellent choice for most businesses, but you need to compare it to other payment processors to understand exactly how the platform can help you.
What Is Online Payment Processing?
Online payment processing systems work closely with payment gateways. They let you make and accept online payments at your online store or brick-and-mortar locations. Without payment processors, you would need to spend time and money on compliance and security software.
The payment gateway receives the request for online payment and then sends the payment information to the payment processor. The payment processor is the service responsible for validating credit card details, confirming your customers have enough money in their account, and authorizing the transaction. The payment gateway receives the authorization method.
You may hear the terms payment processor and payment gateway used interchangeably, but this is not technically accurate. The payment gateway authenticates the payment, and the payment processor sends the transaction from the merchant to the issuing bank.
Every online payment processing service will integrate your ability to accept payments with your sales channels, the card reader, and the POS system. They will also be PCI-DSS compliant. The best online payment processing has even more features. These systems can support subscriptions and recurring billing, integrate with more programs like your website or CRM, and include advanced analytics.
Benefits of Online Payment Processors
Understanding the benefits of online payment processing services can help you understand why choosing the right payment processor is so important.
1. Convenience and Accessibility
Using online payment processing is incredibly convenient for your business and your customers. This lets you accept the full range of payment methods and allows for incredibly quick transactions, making business management even easier.
Accepting in-store and online payments with ease, including a variety of payment methods, also makes your business more accessible to customers. If you accept credit card transactions in addition to accepting ACH payments from a bank account and mobile payment solutions like Google Pay, you can provide the preferred payment methods of most customers. This can greatly improve the customer experience.
2. Enhanced Security
As mentioned, most website payment processors are designed to be PCI-compliant. They will also have other security measures in place to protect customer data and the funds involved. This ensures security for your transactions without having to develop the security infrastructure yourself. This privacy is crucial, as it gives your customers more trust in your brand.
3. Streamlined Financial Operations
As mentioned, using an online payment processor speeds up and streamlines transactions. The entire process only takes seconds. It also streamlines financial operations by letting you integrate all your financial transactions with the POS system you use.
You also get the benefit of automation, which not only prevents human errors but further streamlines your processes.
Top 7 Online Payment Processors in 2024
As you search for the right payment processor for your business, you will quickly notice that there are dozens of website payment processors. Most have a lot in common, but there are a few crucial factors that set them apart. To save you the hassle of having to compare them yourself, we’ve gathered a list of the best online payment processing solutions.
1. Podium
Podium is an all-in-one solution that combines payment processing with other features, such as a CRM alternative and review management. Get paid faster and save time with Podium Payments. As expected from a payment processor, Podium includes terminals, letting you easily accept credit and debit cards as well as contactless payments, such as tap-to-pay credit cards and mobile payments like Apple Pay and Google Pay.
Podium also allows businesses to take advantage of alternative payment methods. Let your customers take advantage of Buy Now Pay Later, offer financing, or use Podium Payments for recurring billing or subscriptions. You can also use it to send out billing estimates to customers.
One of the most unique features of Podium Payments is the ability to get paid via text. This dramatically increases your ability to get paid on time and adds convenience for your customers.
Podium also delivers all the security you expect from an online payment processor. It includes automatic reconciliation and fraud protection and protects credit card information. The software also facilitates your communications audits and makes it easy to follow up with customers that still owe payments. Podium even allows customization, both for your industry and for your specific business needs.
Before you sign up for Podium, you can take advantage of a 14-day free trial, without any credit card requirement. Most small businesses will find the Essentials plan to be a perfect fit. This plan includes much more than just payment processing. It also includes text marketing, online reviews, and website chat. This means that while the monthly cost is a bit higher than other payment processors, Podium offers much better value, as it prevents the need for other types of software.
2. Square
Square is one of the first companies you will likely think of when considering payment processors. Its processing fees are 2.6% + $0.10 for in-person payments and 2.9% + $0.30 for online transactions. You can choose a plan without a monthly flat-rate fee, but that will require paying out-of-pocket for any hardware and POS systems, including a card reader. That can increase the initial cost significantly for small businesses. That being said, the pricing is very transparent.
Conveniently, Square lets you add as many (or as few) POS terminals as you want. This means that it will be easier for you to scale up your payment processing system as your business grows. You can also add payroll and other merchant services for a fee.
For added convenience, Square also offers chargeback protection features. The platform screens all payment disputes submitted by customers and it also waives chargeback fees to a certain point. These features help small business owners protect their revenue.
While Square is somewhat customizable, it doesn’t offer the same level of specialization as some POS systems. So, depending on your business, you may need more customization. Additionally, Square doesn’t work with Windows devices, so you will have to buy and learn to use Apple devices.
3. Stripe
Stripe’s online payment processing services cost 2.7% + $0.05 for in-person transactions and 2.9% + $0.30 for online transactions. There is no monthly fee. The pricing and interchange fees are conveniently transparent, letting you accurately predict how it will fit your budget. You can even accept international card transactions, although the fee is higher at 4.4% + $0.30.
Stripe is especially appealing for businesses that are primarily online and just starting to expand into brick-and-mortar stores. You can do this via the Stripe Terminals and take advantage of customization. That said, Stripe still primarily focuses on e-commerce, so you may want to rethink it if you want to accept payments in person as well.
Though Stripe has a convenient mobile app, some users note that Stripe has a steep learning curve. While the simple features are mostly intuitive, you will need coding experience to do anything more complex. Even connecting the software and hardware together and integrating everything with an ecommerce platform requires coding knowledge.
If you don’t have that coding knowledge, there are “no-code” integrations offering a workaround, but those increase the cost of installation and running the software. However, if you are a developer, the Stripe API can be incredibly useful.
4. Shopify
If you already use Shopify for eCommerce, then Shopify is a tempting option for payment processing. Shopify charges 2.7% + $0.00 for in-person transactions and 2.9% + $0.30 for online transactions. There is also a monthly fee that can range from $29 to $2,000.
The major benefit of Shopify is that it integrates seamlessly with your Shopify website for e-commerce. It also includes a point-of-sale system and is fairly intuitive to use, although many stores will want the Shopify POS Pro system, which costs extra. You can also use it to accept various payment methods and even customize your check-out page.
However, not all payment processors charge a monthly fee, so the fact that this one does can be disappointing to some businesses. Additionally, if you decide to use a third-party gateway, Shopify charges additional fees.
5. Amazon Pay
The average business won’t necessarily want to consider Amazon Pay unless you already have an Amazon Seller account. If you already use Amazon for e-commerce, this can be a tempting option. That is especially true given the lack of monthly fees and fees for web and mobile transactions. Fees for Alexa transactions are 4% + $0.30.
Amazon Pay is one of the few payment processors to let you accept payments via Alexa. Small businesses with an Amazon Seller account will appreciate the low fees and the customer confidence brought by the Amazon brand. It also lets you sell to international customers, including those paying in foreign currencies.
The most obvious disadvantage of Amazon Pay is that you need to create an Amazon Seller account. But the delayed payouts should be an even larger concern, especially for small businesses. Amazon’s reserve policy means that payouts get delayed, and this is especially common for newer accounts. Given the limited cash flow that most small businesses deal with, this is enough of a reason for many companies to avoid this payment processor.
Additionally, Amazon doesn’t offer custom packages or volume discounts. You also can’t use it to accept payments in person. So, if you open a physical store or set up a stall or pop-up for local events, you’ll need to find another payment processor. That is too limiting for many companies.
6. Clover
Clover is another popular website payment processor. The platform charges a monthly fee starting at $14.95 plus transaction fees of 2.3% + $0.10 in person and 3.5% + $0.10 online. However, though these fees can be considered competitive, the cost of the hardware seems a little high. If you need a POS terminal from Clover, it will cost extra and eat into your budget. These extra fees can be a concern for small business owners.
That said, the hardware is well-designed and performs well. However, it can take a while to make up for the upfront cost of that hardware. Additionally, the pricing can be challenging to understand and there is no free plan to help small business owners get the most ROI.
7. Adyen
Adyen has zero monthly fees, but the pricing structure can be somewhat confusing compared to other payment processors’ more transparent pricing models. Visa and MasterCard transactions cost 3.3% + $0.22. American Express transaction fees are 3.3% + $0.22. Other payment methods cost anywhere between 3% and 12% + $0.12.
One stand-out feature of Adyen is its omnichannel support, letting you access sales data from multiple locations in a single place. That includes support for both in-person and online transactions. There is even support for global payment options. You also get 24/7 customer service.
The pricing model’s complexity is one of the biggest disadvantages of Adyen. The monthly minimums are another, as they are too high for many small businesses. Frustratingly, Adyen’s minimums depend on numerous factors, which means you must contact the company to see if your company is even eligible to use the payment processor.
How to Choose an Online Payment Processor?
Every business will have slightly different needs in a payment processor, but there are some common factors that all business owners should look out for.
To start, you want to ensure that your chosen processor is secure. PCI compliance is the minimum, as you need to protect your customers’ sensitive data as well as that of your business. If there is a security or data breach, your company could face consequences, but choosing a secure payment processor helps you prevent this. Don’t forget to look for fraud protection as well.
Pay attention to the payment methods that you can accept with a given payment processing system. The system should let you accept debit and credit card payments, but the top ones also accept Apple Pay, Google Pay, and other contactless methods. Make sure you can accept in-person and online payments, too.
You also want to ensure that you understand the pricing structure of your chosen processor. Some solutions are more transparent than others, but when in doubt, reach out to the customer support team to clarify. The best processors will give you at least basic figures on their website and be happy to answer specific questions about fees that you may have to pay.
It is also smart to pay attention to the other features that come with payment processing, as well as integrations. The best payment processors will integrate with different types of business tools, including invoicing and billing tools and accounting platforms. Podium, for example, has over 180 integrations and includes customer management, reviews, website chat, and other features.
Streamline Payment Collection and Drive More Revenue
Podium offers transparent pricing, security, and the ability to accept all types of payments. It also delivers a better value than other payment processors thanks to the additional functions you get, such as website chat, reviews, and streamlined communications via the inbox.
Podium has proven its efficiency and ability to drive revenue and collect payments for a range of business types. Lux Bond & Green processed $4.2 million in revenue via text with Podium. Or consider that Wow 1 Day Painting dropped its average time-to-payment to just 24 minutes with Podium.
Podium even offers a unique add-on, the AI Assistant that drives business growth faster. Use it to respond to emails, send review invites, view call summaries, and convert leads more quickly.
Online Payment Processing FAQs
Q: What is the best online pay service?
A: The best online pay service will depend on your business’s unique needs, but Podium is an excellent option for most businesses.
Q: How do I set up online payment processing?
A: You will need to choose a payment processor and then create a merchant account with them. Provide the required information and follow the processor’s instructions to set up your account. The best processors will give you step-by-step instructions or guidance.
Q: Is PayPal an online payment processor?
A: Yes, PayPal is an online payment processor. It can also be a payment gateway.
