Online Credit Card Payment Gateways: Comparison Shopping

Because I build websites, I'm often starting online businesses. When it comes to taking online credit card orders however, there aren't many pages out there offering side-by-side comparisons of the various plans for merchants. Even some payment gateways don't make it easy to find the hard data on their plans. So I did some digging, and decided to share what I found here to take the legwork out of it for anyone else who's looking.

If you're reading this and know of a U.S. payment gateway that beats $25 a month, definitely leave a bit of name-dropping in the Comments area. Seems like people haven't been price-hunting, and the major plans take a pretty big chunk of profit even from the little guys. Allowing people to compare the data better is the first part of getting the prices down, so here's to the saner pricing structures that will result from that. Happy online business-ing!

Gateway Service
Sign-Up Fee
Monthly Gateway Fee
Monthly Service Fee
Transaction Fee
Transaction Reserve
Additional
PayPal
-
-
-
$0.30 + 2.9%
-
Convenient. Fraudulent.
Google Checkout
-
-
-
$0.30 + 2.9%
-
1% more if buyer and seller countries differ
Authorize.net
$99
$20
-
$0.10
-
CC Batch fee: $0.25 / batch
Moneybookers
-
-
-
-
-
Not available in U.S.
2Checkout
$49
-
-
$0.45 + 5.5%
-
Frequent wrongful chargebacks. Ow!
LinkPoint
-
$18.95
$10
$0.25
?
Easy approval, lousy fees
Instabill
Varies
$49
-
$0.50
10%
$5 Min. Transactions
MerchantAnywhere
-
$24.95
-
$0.30 + 2.2%
-
That's pretty impressive!
CCnow, Plan 1
$9.95
$9.95 for sales < $100
-
$0.50 + 4.99%
-
Must sell tangible products,
CCnow, Plan 2
$39.95
-
-
$0.50 + 4.99%
-
other seller limitations.

PayPal

With easy sign-ups and fees structured on a transaction basis, PayPal has made their service convenient for both customers and merchants. No wonder their service looms over the industry right now. But they have a habit of taking advantage of those same users who've been lulled by the convenience, and they're banking on people not noticing and switching over to some other service in droves. (Psst! They are!)

What am I talking about? Well, on the customer side they're currently in the middle of their third class action lawsuit from customers who'd signed up easily and started using their service... only to find that a few months later PayPal's systems froze their account (as well as the funds in it, and any business transactions they may have been conducting at the time) for no apparent reason. PayPal would then demand all manner of records to justify their recent transactions, as well as forms of identification they were never asked for before and may or may not have. A utility bill for instance, which PayPal suddenly demanded must be in the user's name. While [former] PayPal users scrambled to validate their existence to the service, PayPal continued to earn interest off the funds it held in all the frozen accounts. And PayPal still does this on a day-to-day basis. Needless to say, users are noticing.

PayPal also has a proviso in their user agreement specifying that if a user ever has a dispute with PayPal, that user must take it up with a Dispute Resolution Team within PayPal and consisting of PayPal's own employees. In other words, the user would contractually forfeit their access to a real court. Back in 2002 a real court ruled that PayPal couldn't stipulate that, and yet the clause remains in PayPal's user agreement to this day, doubtless convincing uneducated users that they have no access to a real court.

But like modern-day America, everything looks fine on the surface. Plenty of consumers still don't know about PayPal's corruption yet, and new users sign up with them every day. Because of that, merchants still feel compelled to offer PayPal as at least one payment option, for the sake of users who only know to trust them by name. So PayPal has been happily fleecing its merchants, out of view of the customers. Doubling chargeback costs to $20, for instance. Keeping transaction fees even on transactions that have gotten shot down. And this little gimmick:

PayPal: Remember when companies applied their rate structures, without you having to remind them to?
PayPal: Remember when companies applied their rate structures, without you having to remind them to?

So merchants who make over $3,000 get a transaction cost tier of better than the standard 2.9% + 30 cents per charge.  But they only get it when they go to PayPal and opt in the month they qualify!  That's right, PayPal's pricing structure doesn't automatically give you the rate you qualify for... you have to request it from them.  This makes no sense; applying their own rate structure is part of PayPal's job, not its' users.  If I'm going to be expected to remind PayPal to give me the rate I qualify for, I'm also going to expect a check from their payroll department for doing their work for them.  This kind of pretzel logic only makes sense from a bottom-line perspective, is probably out-and-out fraud, and is the kind of tactic for which PayPal is notorious.  Avoid.

Google Checkout

Google Checkout was created to be a direct challenge to PayPal's hold on the payment gateway market.  The fee structuring is now pretty comparable to PayPal's, and Google is widely considered to do good work.  Be aware though that Google comes from a corporation called In-Q-Tel, which is the CIA's corporate investment arm.  (The CIA's Keyhole technology became known to us as "Google Earth".)  Google has bought YouTube, and is already tampering with some of the viewing statistics for controversial videos.  Just ask fans of Alex Jones; I was online one weekend when his "Food: The Ultimate Secret" video had gotten so many viewers that it made the frontpage for its category type, and was well on its way to making the front page of YouTube.  Google took the video off from its page display, and brought it back with far fewer viewing numbers than it'd had a few minutes ago.  Thus, the video seemed a lot less popular than it had actually been, and was prevented from getting more viewers upon hitting YouTube's frontpage.

Google has been placing itself as the information leader, bringing us all kinds of cool and free internet services recently.  It's been specializing in polls, crowds, and essentially information management.  That gets a little creepy when most people abandon other search engines, and when there aren't other comparable information services online yet.  So be aware that when you use Google, they're CIA-affiliated.  That itself is enough to make me look around for other alternatives, just to make sure we as a society don't rely on them too heavily.  Essentially, history tells us that's just not the way to go.

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