In the simplest terms, a payment processor is a company that handles transactions between two parties, such as a merchant and a customer. It accomplishes the payment by relaying the payment information, like a credit card, from the customer to the merchant’s preferred bank account.
In most traditional transactions, payment processors involve the following parties:
- the customer;
- the merchant/business owner;
- the payment processor;
- the payment gateway — if not already combined with the processor;
- the bank/credit card company of the customer; and
- the bank of the business.
As a retail marketer, you’ll know that choosing a payment processor is not solely a decision for the finance department. That’s because it’s an important (some would say the most important) part of the user experience, and choosing the wrong option could negatively affect your conversions.
What is a Payment Processor?
Payment processors can process payments using credit cards, debit cards, checks, e-checks, money orders, cashiers checks, and bank accounts.
Payment processors make it very easy for the average person to accept payments online for merchandise or services without the headache of needing to pay for a credit card processing service.
Not only do payment processors allow users to accept payments, but payment processors handle sending payments as well.
One of the best examples of this is PayPal. Paypal is owned by eBay and was originally intended to be used for eBay auctions. When a user wins an auction or item, if the seller accepts PayPal for payments, the buyer can then send the seller the funds for the purchase using a credit card or their bank account through PayPal.
The amount is then deducted from the user's bank account or charged to the user's credit card, depending on which user's preference. Payment processors also allow you to house your funds sent to you, acting as a form of an online bank. So when you’ve received money from online payment, you can choose to deposit it to your bank account or withdraw the funds by requesting a check in the mail.
Payment processors are usually free to sign up and use; the only charges are that of fees taken from the amounts sent and received. Each payment processor charges a different set of fees and percentages.
The Top 6 Traditional Payment Processors
The Top 6 Crypto Exchanges
I. Payments Processors
01. Paypal
This processor allows the transfer of money between users who have an email. PayPal is a very good alternative to the traditional way of sending of money with checks or by mail. In addition, PayPal processes payment requests in the vast majority of online stores and other Internet services, for which it charges a certain percentage to the seller. Until now, most of its customers came from eBay's online auction site, but it is currently very widespread.
- Site: paypal.com
- Used: Online Shopping
- Commissions: 3.4% + € 0.35 per sale (Varies depending on the country)
- Sending payments: Free
- Send to other users (not paid): Yes
- Disputes can be made: Yes. Less than 180 days after purchase
- You can add money from a card or bank account: Yes
- It allows transferring the balance to our bank account: Yes
02. Neteller
Neteller is a company that was founded in Canada created with the objective of processing payment transactions over the Internet. With a Neteller account, we can withdraw, deposit and transfer money to any person or entity that works with Neteller. Neteller is currently operating from London under the name NLR.
Neteller is a payment processor very similar to PayPal that gives the opportunity to recharge money through credit cards, receive payments from web pages, and most importantly, it offers the opportunity to have a MasterCard card that can be virtual or physical to be able to make all kinds of purchases on the Internet or in physical places such as restaurants, shops or stores. With the Neteller card you can withdraw money at ATMs that accept MasterCard.
- Site: neteller.com
- Commissions: Variable depending on the country
- Sending payments: Yes
- Disputes can be made: No.
- You can add money from a card or bank account: Yes.
- It allows transferring the balance to our bank account: Yes.
03. Skrill
Skrill is an online electronic wallet and one of the fastest and safest methods to send and receive money immediately via email. You can also transfer money to other Skrill members instantly.
Skrill is the preferred payment method at most poker rooms. It is based in the UK and has a host of international financing options, as well as options for local bank transfers around the world. It is one of the most practical payment methods for gaming / poker or online shopping. It allows instant transfers in exchange for small commissions.
- Site: skrill.com
- Commissions: Variable depending on the country
- Sending payments: Yes
- Disputes can be made: No
- You can add money from a card or bank account: Yes
- It allows transferring the balance to our bank account: Yes
04. Google Wallet
This processor is essentially Google's version of PayPal. Money transfers can be made and you have a Google Wallet card! As we are all addicted to the big G of Google, it seems that it will not be very difficult to see this processor grow rapidly through the networks. In addition, Google announced last month that it will launch a physical card connected to user accounts so that they can use Google Wallet in retail businesses. It is a very comfortable way to transfer money that already has a huge number of users. Being from Google, it couldn't be otherwise.
- Site: google.com/wallet/
- Used in: Online stores - Others
- Commissions: 2.9% + € 0.30 per sale
- Sending payments: Free
- Disputes can be made: Yes. Less than 180 days after purchase
- You can add money from a card or bank account: Yes
- It allows transferring the balance to our bank account: Yes
05. Apple Pay
Apple Pay allows companies to collect cashless payments from customers who have an Apple device. In addition to purchasing items with Apple Pay, users can send and receive money, making this an almost ubiquitous way to execute your transactions.
Apple Pay is intuitive for users. They can pay online with a single click or pay with their iPhone or Apple Watch in a store. It supports Touch ID on a Mac, increasing the ease and efficiency of your purchase.
Businesses can transact exclusively through Apple Pay, or they can use it in conjunction with other types of payment. Additionally, merchants can enable their rewards program to be used and refilled directly through Apple Pay.
Apple Pay is compatible with most card issuers and payment providers. No fee is charged to companies.
- Site: apple.com
- Commissions: No
- Disputes can be made: No
- You can add money from a card or bank account: Yes
- It allows transferring the balance to our bank account: Yes
06. Payoneer
Payoneer is a payment processor that, like PayPal, allows its users to send and receive money easily, safely and cheaply from more than 200 countries. Founded in 2005, its growth has been exponential, and currently, companies such as Google, Airbnb, Elance or Getty Images actively work with Payoneer as a payment gateway for their clients.
Among some of its advantages, I would highlight that it is completely free, allows the money to be sent to a bank account, there is the possibility of getting a MasterCard to withdraw the money and it has a very attractive invitation system.
- Site: payoneer.com
- Used in: HYIP - Investment - PTC - Others
- Commissions: 0.50% up to a maximum of € 2.99
- Sending payments: 0.50% up to a maximum of € 2.99
- Disputes can be made: No
- Referral Systems: YES. Payoneer has a very attractive referral system. For each person who registers through our link, we will earn (us and our guest) no more and no less than $ 25. For this money to be reflected in our account, our guest must have reached a minimum of $ 100 in his account. For this reason, it is very important that when registering, we do so through the link of someone (whatever).
- You can add money from a card or bank account: Yes
- It allows transferring the balance to our bank account: Yes
II. Cryptocurrency Payment Processors
01. Bit2me
- Site: bit2me.com
- Used on: Bitcoins Sites
- Commissions: No, free
- You can add money from a card or bank account: Yes
- It allows transferring the balance to our bank account: Yes
02. Local Bitcoins
Localbitcoins.com has been, by far, the Bitcoin exchange that has grown the most in 2012. It is a very easy-to-use system that allows communication between people who want to buy or sell bitcoins - mostly through face-to-face transactions - wherever you are. Localbitcoins.com also provides multi-factor authentication, escrow service and an integrated wallet.
- Site: localbitcoins.com
- Used on: Bitcoins Sites
- Commissions: Variables
- Disputes can be made: No
- You can add money from a card or bank account: No
- Allows transfer of the balance to our bank account: Yes
03. CoinBase
CoinBase is one of the most popular Bitcoin services in the world, including a very easy and comfortable wallet to use. Coinbase is a safe bet for newbies in this world, offering everything you need to trade Bitcoin in one place. CoinCase has a referral program. It has 2 million users and more than 38 thousand merchants accept bitcoins from Coinbase.
- Site: coinbase.com
- Used on: Bitcoins Sites
- Commissions: Free.
- Sending payments: Free.
- Disputes can be made: No.
- You can add money from a card or bank account: Yes.
- It allows transferring the balance to our bank account: Yes.
04. Gemini
Gemini is a licensed private digital asset exchange that also offers digital cryptocurrency services. Founded in 2014 in the United States by the Winklevoss twins, Cameron and Tyler, its operations have now expanded to Europe and Asia. On their platform they offer Bitcoin and Ether, Bitcoin Cash, Litecoin in addition to other AltCoins.
- Site: gemini.com
- Used in: Cryptocurrency platforms
- Commissions: Variable depending on the cryptocurrency
- Sending payments: Variable depending on the cryptocurrency
- Disputes can be made: No
- You can add money from a card or bank account: Yes
- Allows transfer of the balance to our bank account: Yes
05. eToro
eToro is a broker that started in 2007 and since then it has had a gradual but continuous growth. They have been able to incorporate different financial products to improve the offer to their clients, they have been subject to the regulations of different international regulators and today they are a benchmark broker in social trading.
After pioneering Bitcoin trading in 2013 via CFDs, eToro expanded its cryptocurrency offering, allowing clients to trade and invest in Ethereum, XRP (from Ripple Labs), Litecoin, and other popular cryptocurrencies.
- Site: eToro.com
- Used in: Cryptocurrency platforms
- Commissions: Variable depending on the cryptocurrency
- Sending payments: Variable depending on the cryptocurrency
- Disputes can be made: No
- You can add money from a card or bank account: Yes
- Allows transfer of the balance to our bank account: Yes
06. CoinMama
CoinMama is another site that offers its Bitcoins buying / selling service for more than 2 years. Allows you to buy with Visa and MasterCard credit and debit cards. The site is reputable in the Bitcoin community and has stood the test of time. They do not require user verification for purchases under $ 250.
With the following code you can also get a 5% discount on your first Bitcoins purchase: 623GW783
- Site: coinmama.com
- Used on: Bitcoins Sites
- Commissions: Variable
- Disputes can be made: No
- You can add money from a card or bank account: No
- It allows transferring the balance to our bank account: Yes
Final Thoughts
Is PayPal the most famous payment gateway out there?
Undoubtedly.
Is it the best?
Probably not, as there are so many use cases and needs in the business world that a single tool could hardly serve them all. Fortunately, there are solid alternatives to PayPal that are extremely helpful.
If you are not satisfied with it, now is the time to start considering switching from PayPal to a different payment application that might work better for your online business. By doing so, you are likely to have better rates, more features, and more secure transactions with your customers.
Once you've transitioned, be sure to come back here and share your experience in the comment section!
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