The stunning rise of ecommerce is driven by fast, frictionless payments. According to Insider Intelligence, retail ecommerce sales have grown over 50% in the last 5 years approaching nearly $5 trillion in 2022. The pandemic dramatically accelerated these digital payment trends withnecessity driving adoption of contactless mobile wallets, debit card usage surging, and an emphasis on more robust fraud prevention.
Understanding the payments landscape is vital for any growing digital business. Accepting secure online payments builds trust with customers, reduces missed sales opportunities, and enables tapping into new global markets. As online shopping hits mainstream adoption, merchants require scalable and reliable payment partners more than ever before.
This expert guide will examine the 10 top payment processing solutions available today based on market share, security, features, flexibility in pricing models and ease of use.
How Online Payment Processing Works
Online payments involve transferring digital funds instantly and securely between parties. Under the surface, several key players work together to facilitate transactions:
1. Merchant – The online business selling products/services that needs to accept payments
2. Customer – The buyer initiating a payment for goods/services from business
3. Payment Processor – The intermediary handling routing, compliance, data transfers
4. Payment Gateway – The software connecting the merchant and credit card networks
5. Issuing Bank – The financial institution providing the customer‘s payment card
6. Card Network – The system transmitting payment data e.g. Visa, Mastercard
7. Acquiring Bank – The financial institution managing payments for the merchant
When a customer opts to purchase an item online, payment details are securely transmitted via encryption to the merchant‘s payment processor and gateway which verifies account information and confirms sufficient funds availability. The processor routes the transaction through the card network who facilitates the actual fund transfer between the acquiring and issuing banks. Finally, authorization notification occurs confirming transaction completion for both merchant and buyer.
Now let‘s evaluate 10 leaders providing the technology, infrastructure and connections to enable smooth processing of online payments globally for internet businesses.
1. Stripe
Silicon Valley darling Stripe surpassed $100 billion in valuation in 2021 cementing status as the world‘s most valuable private fintech. The meteoric rise has been powered by dominance in payment APIs with Stripeembeds used on millions of websites.
Key Stats:
- Founders are Irish brothers Patrick and John Collison
- Processes more than $640 billion in payments annually
- Partners with Alipay, Apple Pay, Google Pay and 60+ global payment networks
- Counts Amazon, Salesforce, Lyft among clients processing payments
- Named one of Fortune‘s Best Places to Work for Millennials
Stripe Checkout offers clients a highly customizable hosted payment page supporting 135+ currencies and local payment types globally including Alipay, Apple Pay and Google Pay Wallet.
Extensive server and client libraries integrate using methods buyers expect in as few as 5 minutes. Stripe billing also enables subscription management, invoicing, transparent fees and 24/7 support.
Competitive transaction fees of 2.9% + $0.30 per successful charge power the "pay-as-you-go" potential with annual volume discounts. No monthly fees or setup costs enable frictionless adoption and continued innovation.
2. PayPal
Powering more than $1.2 trillion in payments annually, PayPal drives commercial growth for millions of merchants worldwide. By offering bank level security protections and meeting complex regulatory compliance around the globe, PayPal Commerce Platform delivers flexible omnichannel payment capabilities with extensive reach across more than 200 markets.
Founded in 1998 by technology luminaries including Peter Thiel and Elon Musk, PayPal set the standard early for frictionless online payments. Today the two-sided platform enables customers and merchants to:
- Securely buy and sell goods/services with over 403 million active accounts
- Convert mobile browsers into point-of-sale systems
- Accept donations and crowdfund innovation through Giving Fund campaigns raising nearly $7 billion to date
- Tap surging growth in cross-border ecommerce by localizing language and payment types
Simplified pricing adjusts dynamically based on sales volume:
| Monthly Sales Volume | Transaction Rates |
|---|---|
| $0 – $2,500 | 2.9% + $0.30 |
| $2,500 – $25,000 | 2.5% |
| $25,000+ | Custom Rates |
No setup costs and month-to-month terms offer flexibility to scale.
3. Braintree
Trusted by industry leaders like Uber, Airbnb and Jet.com, Braintree delivers payments capabilities at scale. The full-stack payments platform acquired by PayPal for $800 million in 2013 simplifies accepting payments across channels including mobile and global payouts.
Braintree pioneered easy integration solutions like Drop-In to embed payment forms seamlessly into website flows. Developers praise elegant and intuitive SDKs that speed time-to-market for mobilizing payment functionality.
Some benefits driving Braintree‘s success include:
Innovation – Access to emerging payment methods fast including Apple Pay, Venmo and cryptocurrency
Control – Ability to build fully customized buyer experiences from checkout to stored cards
Security – End-to-end encryption and 3D Secure with multifactor authentication
Global Reach – Pay in 130+ currencies through a unified gateway
Competitive transaction fees come the greater processing volume tiers are reached:
| Monthly Volume | Rate |
|---|---|
| Up to $50k | 2.9% + $0.30 |
| $50 – $100k | 2.5% + $0.30 |
| $100k+ | Custom |
Flexible pricing adjusts based on sales channel (online/mobile), average order value and more. No hidden fees help fuel growth.
4. Authorize.Net
Owned by Visa, Authorize.Net empowers more than 750k merchants globally to accept electronic payments through all major cards, mobile wallets and more. Committed to continuous availability and reliability, the payment gateway processes $165 billion annually.
Trusted by enterprises and small businesses alike for over 20 years, Authorize.Net removes technological burdens to provide specialized solutions tailored by industry vertical including:
- Retail & ecommerce
- Charities & fundraising
- Business services
- Health and education
Developers can leverage a rich API supporting authentication, payment transactions, reporting and batch settlement. Hosted payment form capabilities also speed integration using a iframe overlay accepting payments via mobile optimized interfaces.
Merchants pay competitive forwarding rates starting at 2.9% + $0.30 per transaction. Enterprise partnerships also enable custom pricing terms for elite clients processing over $50 million annually.
5. Adyen
Founded in 2006, Adyen empowers global enterprises like Facebook, Uber and Spotify to embed financial infrastructure. Unified data across all systems and touchpoints enables hypergrowth.
Customizable payment flows remove friction at checkout increasing conversion and order values. Merchants can also:
- Optimize authorization rates by dynamically switching between payment routing paths
- Price dynamically adjusting FX margins based on currency volatility
- Leverage machine learning insights from billions in transaction data
Adyen MarketPay streamlines payouts to marketplaces and sharing economy platforms by automating escrow and disbursement for high frequency, variable amounts – key for gig workers.
Pricing adjusts based on client business models, order values, channels and risk profile. Interchange-plus plans add a simple per transaction fee atop wholesale card network rates for ultimate flexibility. No charges for declines or chargebacks.
How to Select the Right Payment Solution
Today‘s menu of payment processing providers empowers online merchants with choice – from niche vertical solutions like restaurant POS systems to horizontally integrated platforms serving diverse global enterprises.
Here are 5 key factors when evaluating payment partners:
1. Security – Utilize modern encryption, tokenization and fraud monitoring tools. Maintain PCI DSS compliance always.
2. Reliability & Uptime – Seek 99.99%+ uptime guarantees backed by redundancy failover plans.
3. Platform Longevity – Partner with established players committed to payments innovation long term.
4. Flexible, Transparent Pricing – Fixed + variable SaaS models enable scaling. Interchange-plus provides supply chain visibility.
5. Exceptional Developer Experience – Leverage robust APIs and SDKs for fast, seamless integration.
The world continues shifting from cash to cashless. Aligning with an extensible payment platform supporting business growth today and innovations on the horizon will ensure competitive differentiation for those selling goods and services online.
