Making the Right Payment Processor Decision for Your Ecommerce Business

by / ⠀Startup Advice / July 7, 2012

Being a successful CEO is all about making the right calls. It’s about knowing what’s best for your business. It means taking the time to review all of your options, rather than going with what’s expedient or easy. There are few areas where this is more obvious than in the area of payment processing for ecommerce businesses.

Too many online businesses simply start out accepting PayPal payments, not realizing that there are other options. They become surprised when, out of the blue, PayPal can decide to make dramatic changes that cost the business significant amounts of money.

Here are some reasons why you should choose a payment processor that specializes in ecommerce, rather than simply relying on PayPal:

  • Ecommerce payment processors have solutions that fit your business. While PayPal’s solution can sometimes be made to fit your business, it will always be in an ad-hoc fashion. Chances are pretty good you’ll have to change some of your design or your business flow options around in order to make PayPal work. This can interfere greatly with upselling, for example. On the other hand, payment processors that specialize in ecommerce are often more flexible, and can better integrate with your business needs.
  • PayPal has something of a sordid customer service history. There are several elements of customer service in PayPal’s history that simply make them a risky proposition. First of all, there have been lawsuits that accuse the company of intentionally erecting barriers between them and their customers, such as customer service hang-ups and lost calls. On top of that, however, PayPal has a history of denying customers access to their funds. According to the PayPal user agreement, they can freeze your account at any time. When they do, you could be waiting as much as six months before you have access to your funds again – if ever.
  • Ecommerce payment processors often have a rate schedule that better suits your needs. PayPal’s rate schedule is standardized. That means you may not get the best possible rates for your business. What you need is a payment processor that fits your transaction profile and business type. For example, a company that does thousands of transactions per month that average $20 or less per transaction has very different needs (and rates) from a company that processes less than 100 transactions each month and averages $300 per transaction. The same goes for payment method – those that swipe cards have different rates than those that only use electronic payments.

Running a successful business means making the decisions that fit your business. Simply choosing PayPal because it’s easy or popular means you can be missing out on important functionality, risk frozen accounts or customer service problems, and pay higher rates than what you should be paying.

Don’t leave your credit card processing in the hands of a company that isn’t right for your business. Just a little bit of shopping around can wind up saving your business thousands of dollars in fees, and give you added security and peace of mind.

David Rodwell is a seasoned writer in business and economics, taking a particular interest in payment processing. You can find more of his articles at

About The Author

Matt Wilson

Matt Wilson is Co-Founder of Under30Experiences, a travel company for young people ages 21-35. He is the original Co-founder of Under30CEO (Acquired 2016). Matt is the Host of the Live Different Podcast and has 50+ Five Star iTunes Ratings on Health, Fitness, Business and Travel. He brings a unique, uncensored approach to his interviews and writing. His work is published on, Forbes, Inc. Magazine, Huffington Post, Reuters, and many others. Matt hosts yoga and fitness retreats in his free time and buys all his food from an organic farm in the jungle of Costa Rica where he lives. He is a shareholder of the Green Bay Packers.