EcommerceBytes-Update, Number 366 - September 07, 2014 - ISSN 1528-6703     2 of 5

Sellers Choice Awards: Online Payments 2014

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Stripe, Square, Amazon Payments, and PayPal topped the list of online payment services in this year's Sellers Choice Awards. And as has been the case from our first payments survey, PayPal remains the most popular of payment services among readers participating in the Sellers Choice Awards - but the gap is narrowing.

Online payments have changed over the past 5 years. Google Checkout has exited the space, and Amazon Payments continues to grow adoption. Also, more marketplaces are launching their own direct checkout (Etsy, Bonanza); one reader said, "I find customers prefer to use a marketplace's own in-house payment acceptance option when available."

Interestingly, when we surveyed sellers in 2011, less than one-third (28%) took credit card payments, while now, almost half (47%) accept credit card payments. And that number is up from 39% recorded last year.

Almost 60% of respondents accepted cash payments in 2011, that number dropped to 52% this year - though still a significant number, especially compared to the only 6% who said they accept a mobile payment service.

We asked online sellers to rate 13 online payment services on five criteria: fee structure; dispute resolution process; account holds, rolling reserves and restrictions; popularity among customers (buyers); and customer service.

Stripe came in number 1 with an overall score of 8.05. Square followed with a score of 7.65, followed by Amazon Payments (6.99), PayPal (6.97), ProPay (6.82), and Skrill (5.25).

The type of payments sellers accept vary according to the venue on which they sell. Not only do marketplaces place restrictions on which payment services sellers can offer, ecommerce platforms and shopping carts also have limitations on the services with which they integrate.

Stripe was highly rated by those sellers who use it - "Stripe looks and acts like a regular payment processor, so customers feel comfortable," explained one respondent. In terms of "Customer Popularity," PayPal came out on top at 8.08 - that's compared to 7.8 last year.

Respondents were also asked to leave comments about each service they used, which follow.

Reader Comments - Online Payment Services

We don't want Amazon seeing our sales thru other channels, their customer payments experience was choppy, and we don't like using Seller Central as part of the payments process. So we could not wait to drop them. We thought our customers would be upset but replacing them with Stripe was simple and uneventful.

Stripe is amazing and their recent payment schedule change makes it our hands-down favorite. This year we dropped Amazon Payments because of their fees and forcing us to use seller central for orders. We also dropped Braintree after it was acquired by PayPal. We may eventually remove PayPal and only use Stripe.

I have yet to find a satisfactory credit card processing service. Square comes the closest, but fees are a bit high.

For a small business ($100-150K sales/yr) PayPal is the easiest, least expensive, best known option.

Don't like that Amazon Payments doesn't instantly tell me when I have a payment, only does it once a day - I have to actively go looking on AP to see if I have had a payment

My Stripe fees are the same as the PayPal fees. Stripe transfers $$$ automatically into my checking account in 2 business days, just like Google Checkout/Google Wallet used to do. (A 7 day funds hold applied only on the first Stripe transaction, when the account was new ... it then reverted permanently to 2 days for each transaction).

For sellers in Australia, the payment solutions are very limited and there is no choice. Amazon Payments are not available to us nor many of the other payment solutions. So PayPal is a must for selling online despite wanting to offer alternatives to customers - that choice is removed from us.

Propay's yearly fee is unnecessary. Skrill and PayPal are competitive, but can be a little high for certain transactions.

Have had many problems with PayPal but since we started using Square we have not had a single problems with any sales on Square and their payments are faster and easier to manage.

All are within the range of normal costs for services. The only thing that makes Propay lower on the scale is the annual fee and the silly charge of a quarter to transfer the money to your checking account. That 25 cents is petty.

PayPal fees are high and they retain the fixed element if you have to refund. Skrill are fairer.

Some issues with Skrill and unfortunately customer service does not always respond.

We have never had a problem with any payments through Square.

Propay was a nightmare for me. Dropped them, but they still have my money years later. Amazon is cumbersome, PayPal is ok. Square and Stripe have been best.

PayPal post instantly. Square sends payment next day to bank account Amazon only pays every two weeks.

Skrill is fairly popular, but many U.S. users report problems when signing up. Overseas customers don't seem to have the same issues. Popularity of ProPay might be because of the way eBay displays alternate payment providers.

I rated Stripe ahead of PayPal, because, given both alternatives on eCrater, buyers now choose Stripe at least 60% of the time, rather than PayPal. (NOTE: buyers don't knowingly "choose" Stripe ... what they choose is to enter their credit card info at eCrater checkout, rather than choosing the PayPal alternative. Stripe is then our processor.) Before using Stripe, (when offering only PayPal after Google Wallet ceased), I used to get emails from buyers wanting to avoid PayPal, and I had frequent abandoned carts as well. Since adding Stripe, I've had no more abandoned carts. When I used to have Google Wallet (before Stripe), more buyers chose PayPal over Google Wallet. . . but, with buyers now choosing more to go with Stripe over PayPal, I assume that PayPal's perceived reputation must have worsened to date.

I have no reason to think my recent buyers aren't okay using PayPal. I've found it interesting on Etsy that my payments have been split maybe 50/50 between PayPal and Etsy direct checkout.

Stripe looks and acts like a regular payment processor, so customers feel comfortable. PayPal and Amazon are popular with customers that buy online regularly, especially if they have accounts. Propay was not used much so we don't miss them.

Skrill has not responded to email/web inquiries in recent months. PayPal was unable to answer some important questions, but was always easy to reach.

Amazon was hard to reach, but then were satisfactory. PayPal, Square and Stripe have been great. Propay has been a disappointment in customer service.

Amazon and Stripe have humans on the phone, not days' worth of emails.

Reader Comments - Paper, Credit Card, Bank Transfer, Mobile

I used to accept checks or money orders as well as PayPal. After getting burned on one bounced check, I stopped accepting checks. Although I'd still be willing to accept a money order, I don't advertise it and no one has asked about using a money order or a check in a long time.

I can't remember the last time anyone has sent either cash or money orders as payment. I'm guessing 4 years ago.

I am set up to bank to bank transfer without any fees, but don't actually use it in my business since the sites I sell on don't support it.

The majority of my customers pay via my merchant account, clearly PayPal is not a favorite service with my customers.

So many buyers want nothing to do with PayPal since they are associated with eBay. So, outside of eBay, many of my buyers send me money orders.

We thank all readers who took the time to rate the online payment services.

About the author:

Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to

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