If you’re one of the 2 billion people who use online payment platforms on a yearly basis, then welcome to the club. Using apps like PayPal or Stripe is a growing trend across the entire world, and year after year, more people are signing up. These days, many people find them more convenient to use and in some parts of the world, younger people are eschewing cash and credit cards and instead relying on payment apps.
It’s been abundantly clear these apps are here to stay, and that leads to an important question: which one is best for you? The largest four online payment platforms as of 2023 are PayPal, Stripe, Amazon Pay and Shopify Payments. It will be those four that we will focus on, comparing their pros and cons to find the best for any type of customer.
Online Payment Platforms: Which is the Best For You?
PayPal is by far the biggest payment service online, and one of the oldest. It’s a household name now and for a long time it may have seemed like PayPal was the only one of its kind. While that’s no longer the case, Paypal still manages roughly 40% of online payments.
PayPal allows account holders to make payments for online purchases through a PayPal account, credit or debit card. Users who have PayPal accounts can also send and request money between each other.
Paypal Pros and Cons
PayPal presents itself as a versatile site useful for most kinds of users, but you should know the pros and cons before signing on.
- Most online vendors accept PayPal payments.
- People can pay through PayPal without an account.
- Mobile payments don’t require a point-of-sale system. The buyer and seller only need the PayPal app on their mobile phone.
- Robust buyer and seller protections for physical goods.
- No daily or weekly spending limits for verified accounts with up to a $60,000 per-transaction limit.
- User experience is complex for simple peer-to-peer transactions.
- No point-of-sale system.
- Payments for goods and services are charged a fee of 2.29% + $0.49 per transaction, and often include hidden fees, making them among the highest rates in the industry.
- Customer service is difficult to reach.
Paypal’s greatest strength is its share of the market. However, its transaction fees are higher than other similar services, and they have been known to suspend accounts without warning. This has been a more frequent occurrence, often closing accounts without explanation, and complaints and reports to the BBB have increased.
Founded in 2010, Stripe is an Irish-American online payment service that has quickly climbed up to the second largest payment service behind only PayPal.
The service offers more customization for payments, and generally presents itself as more flexible than other options. It processes funds via credit card or bank and transfers those funds to the sellers account.
Stripe Pros and Cons
Stripe is more geared toward online businesses, but you should still weigh its features and shortcomings before signing up.
- Boasts easy account start up.
- Stripe offers transparent pricing and flat rates across all transactions.
- Accepts payments in 135 currencies across the world.
- Accounts are highly customizable based on user’s business model.
- Accessible 24/7 Customer Support is often cited as helpful and informative.
- Customization is difficult to master without software experience.
- Offers limited options when it comes to in-person business.
- Refunds are slow to process and can take as long as a few months.
- Its flat rates are still high compared to other services.
- Strict terms and conditions can limit business options.
Stripe is more specialized than some other payment centers, which is its greatest strength and main drawback for anyone looking to create an account. In short, Stripe is better utilized by small businesses and large corporations that do most or all their business through online transactions or do business across the world.
While not as expensive as PayPal, their rates are still high and they offer little options for people that do business in-person.
Deciding that being the largest online store in the world wasn’t quite enough, Amazon launched its own online payment system, Amazon Pay, back in 2007. Working through an established Amazon account, it allows users to make payments on third party websites and apps.
It has over 300 million accounts, and that number has been growing, with accessibility in over 175 countries.
Amazon Pay Pros and Cons
How one feels about Amazon Pay will have a lot to do with how one feels about Amazon in general, but it has proven a reliable app for millions of users.
- Streamlined payment options for recurring bills or other purchases.
- Integration with all Amazon markets and technology, such as Alexa.
- Secure accounts and transactions with built in fraud protection.
- Brand recognition with Amazon makes it an attractive option to buyers and sellers.
- Customer service is lacking, with almost no in-person option.
- Long waits for approval of merchant and seller accounts.
- Compatibility issues with other platforms has been reported.
- Amazon Pay is not accepted on as many websites as other payment options, such as PayPal.
Overall, Amazon Pay is geared toward buyers and consumers more than people doing online business. Still, if you’re a small business owner or freelancer that already does a lot of business on Amazon, this could be a very convenient tool to use. Otherwise, if you don’t already use Amazon, there can be a lot more paperwork involved than other payment options.
Much like Amazon Pay, Shopify Payments is integrated with its parent company Shopify. As a payment system, it boasts quick payouts for those that have set up online stores and integration with other systems.
For the uninitiated, Shopify is a platform for small businesses and freelancers to create their own online stores, and introduced Shopify Pay in 2006.
Shopify Payments Pros and Cons
Those that already use Shopify will naturally get the most out of Shopify Payments, but for the savvy shopper or small business owner, it could be to your advantage to start an account.
- Flexibility with checkout options and payment methods.
- Integrates well with other platforms, such as PayPal.
- Account set up is easy and the service is easy to use.
- Transparent pricing and flat rates for all transactions.
- Tied to Shopify accounts, which require a monthly fee.
- Fees are charged for using third party gateways.
- Limited availability compared to other payment systems.
- High chargeback fees starting at $15.
Much like Amazon Pay, how much you get out of Shopify Payments depends entirely on how much you use Shopify. As it is tied to a subscription plan that can be quite hefty, the standard subscription being $29 a month, this is not the system to use if you are a casual shopper or starting out in a small commercial venture. If your business is already established however, it could be to your benefit.
Other Payment Options
As commerce gets more entrenched in online spaces, more systems will pop up with new innovations. Other systems that might suit customers include:
- Zelle: A payment system that was established by the seven largest banks in the US, Zelle allows people to send money digitally between accounts, so long as both parties have the app. It is more focused on person-to-person payments than other systems.
- Venmo: Bought by PayPal in 2013, Venmo is, like Zelle, designed to help with in-person interactions and payments, such as splitting bills or covering I.O.U’s. It
- Square: A point-of-sale system aimed at small and medium businesses, Square allows for direct deposit and can be paired with a card reader for payments.
- Apple Pay: Developed by Apple, Apple Pay is usable on most iPhone and iOS apps, and can be used in place of a credit card at a number of retailers.
- Google Pay: Google’s answer to Apple Pay, Google Pay can be used on any Android phone or tablet to the same effect, used in place of a credit card at a number of retailers.
William Fewox has worked as a freelance writer since 2017, and his work is featured in literary magazines such as The Aquarian, The Navigator and The Historian. He has also self-published a handful of novels. He has worked as a Social Studies teacher and research assistant in local Florida museums and more recently has worked as an editor for a start-up publishing company. William holds a bachelor’s degree in history from Jacksonville University.