A couple of years ago the online payment gateway market was essentially a monopoly. PayPal was the sole provider of an affordable and easy to integrate online payment solution. Sure you could use the Authorize.net account that was connected to your in-store credit card terminal, but that came with very high fees that I saw reach 8% for some of my clients. But there were some issues beyond fees and integration.
Security is a big concern
The biggest concern with online payments is security. When you take a credit card online you’re collecting everything about that user, their credit card number, security code, and billing address. This is all the information a would-be thief needs to start making purchases with your customer’s cards. To combat this, credit card companies require PCI compliance. PCI compliance should put an end to credit card security risks, but that’s often not the case.
Small businesses that produce a limited volume of credit card transactions annually are able to self certify their compliance with PCI DSS. The last time I worked to self certify a client, it took me over 2 hours to complete. So unfortunately most small businesses don’t take the time to accurately verify their compliance.
This is how PayPal gained a foothold in the industry. By encouraging website owners to use “Checkout with PayPal” buttons, PayPal took over their credit card processing and PCI compliance. Taken at face value, this is a very good thing. No PCI compliance, no security headaches, and no reason for a hacker to have an interest in your server. But there are a couple of issues with PayPal that aren’t always obvious at first.
Issues with PayPal
The first issue that PayPal presents is that in its most common form, PayPal Payments Standard, it takes users away from your website. This is very bad for order competitions, especially if your visitor wasn’t expecting to leave your website. Fortunately PayPal is a relatively well known brand so this isn’t as bad as when a website uses an obscure 3rd party payment processor. And just FYI, Authorize.net is an obscure payment processor for most Internet users.
PayPal does offer an option to process credit cards without forcing your site visitor to go to PayPal’s website. This is available on their Payments Pro plan for $30/month. While this keeps visitors on your site and makes PayPal almost invisible, it opens up the possibility for another issue. Depending on how you, your developer, or your shopping cart or other plugin integrates PayPal, it’s possible that you could be storing credit card information on your server either permanently or temporarily.
This presents a huge security risk and suddenly makes your server an appealing target for hackers. While you don’t have the same volume of credit cards stored as recent hacking victims Target, Neiman Marcus, and Home Depot, your server is even more vulnerable than theirs, especially if you didn’t know you were storing the information to begin with.
With these two issues from the largest online payment processor, you might think that we just have to deal with these issues. Until recently that was true, but not any longer. In late 2011, Stripe launched their payment processing API. This made them immediately popular with developers as other payment processing companies were slow to release and support their own APIs.
With Stripe’s API, it suddenly became possible to embed a payment form on your website, collect credit card information, and never have the credit card information touch your server. Everything is handled through a secure tunnel between your website and Stripe. This means no PCI compliance for you and no fear of your server being hacked only to find out you’ve been storing payment details.
Since their launch, Stripe has added more features and has been adopted by several startups as well as established brands. Here’s a snapshot of who’s using Stripe:
Recognize some of their users? These companies are using Stripe for the same reasons you should be. It’s easy to implement, it’s secure, and your payments are deposited to your bank account in 2-7 days depending on your account history. But what about integration?
Developers love Stripe
Since developers were the first group to adopt Stripe in huge numbers, there are a ton of ways you can add it to your website. If you only have one item with one price point, you can use Stripe Checkout to add a secure payment form to your website.
If you’re using an eCommerce plugin like WooCommerce, iThemes Exchange, or WP e-Commerce, you can use Stripe by installing an add-on. You’ll need to add your Stripe API key, but otherwise it’s plug-and-play without any development necessary.
And if you’re using a membership plugin or anything else that allows you to collect payment, there’s most likely either native support for Stripe or it’s available via an add-on or extension.
One more thing
Unless you’ve been under a rock for the past month, you’ve heard about Apple Pay. Apple’s new payment system that’s built into the iPhone 6 and iPhone 6 Plus. You might have heard the rather impressive list of merchants that will be launch partners; McDonald’s, Whole Foods, Panera, and Disney among others. What you probably haven’t heard is that Stripe will be able to use Apple Pay to process eCommerce payments on both your website and in apps.
By adding Stripe to your website, you can make the checkout process even easier. Instead of having to pull out a credit card or deciding to make the purchase later (but forgetting), your customers can simply select their credit or debit card from Apple Pay and use their thumb to pay. This is something that PayPal Payments can’t support and with their ads responding to Apple Pay, I doubt they’ll be able to soon.
PayPal kicked off the online payment industry, but relative newcomer Stripe is the one that is shaking it up and will help your business grow. With built in PCI compliance, an easy to integrate Checkout add-on, and add-ons for popular eCommerce and membership plugins, Stripe is the clear standout in the industry.
When Apple Pay launches later this year, using Stripe will allow visitors using Apple’s newest iPhones to make purchases on your site with just their thumb print. To see how easy it is to get started, head over to Stripe.com to setup your account today. Without any application or ongoing fees, you have nothing to lose, but tons of new customers to gain.
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