How to Pick a Processor on Each Major e-Commerce Platform

Ten or twenty years ago, you might’ve been able to do okay in the retail world without an e-commerce presence. But in 2018, If you want people to see your business as legit (and especially if you want the business to expand beyond local markets), you need to have an online store. Getting hooked up with an e-commerce platform is a process that comes with its own complexities—one of the trickiest being payment processing. If you’ve already gone through the rigmarole of setting up physical payment processing, the prospect of sorting through all the options for your virtual business can be unpleasant, to say the least. Here’s a rundown of four major eCommerce platforms, their native payment solutions, and how they integrate with third-party providers.

Shopify

Depending on the plan you choose ($29-$299 per month), Shopify’s rates run from 2.4% to 2.7% per transaction—if you use their native payment option, Shopify Payments. If you choose to use a third-party provider, you’ll face additional transaction fees (0.5% of revenue for the $299 plan, 2% for the $29 plan). In most cases, you’ll also have to pay for a payment gateway to connect your payment processor to the platform. Even with the additional hoops to jump through, third-party processors can still be a viable option on Shopify, though they might require a lot of legwork for little savings.

Lemonstand

Lemonstand doesn’t have a native processing option, so you won’t be charged transaction fees for using an external provider. Plus, it integrates directly with 95 payment gateways, allowing for a pretty seamless experience. And, while Shopify plans are priced based on which features are included, Lemonstand pricing is determined by volume alone. So, if you’re a smaller business just starting out, this could be a good fit for you—assuming you choose the right payment gateway and processor.

BigCommerce

This platform is powered by PayPal/Braintree, making PayPal the closest thing it’s got to a native solution. Bigcommerce won’t charge you anything for using a third-party processor. But, like Shopify, the cost of membership increases with the number of features (running between $29.95 and $249.95). Transaction rates are inversely proportional to the monthly fees, with merchants at the $29.95-per-month level paying 2.9% + $0.30 per transaction, while those paying $249.95 per month are charged 2.2% + $0.30. Their roster of integrated third-party solutions isn’t quite as robust as Lemonstand’s, but they have 40+ options to choose from.

Magento

Magento doesn’t make it easy to figure out exactly how much you’ll pay per month or per transaction, but this article gives more context for what factors go into determining the pricing. What we do know: Magento’s native processing option is PayPal, and the list of external providers that work with the platform is pretty short. It’s worth noting that the cost of Magento is so variable largely because its solutions are custom-developed—which means it’s going to be on the expensive side. If your business requires an extensive, elegant, and efficient eCommerce solution in order to succeed, Magento is worth looking into. Otherwise, more straightforward platforms will probably meet your needs (and be more cost-effective). Once you’ve assessed the platform options, how do you go about comparing native solutions to third-party ones—and the third-party options to each other? What you really want to learn is which combination of payment gateway, processor, and platform will most effectively meet your needs for the lowest overall cost. To do that, you need to answer three questions.“What external payment gateways does this eCommerce platform integrate with?”If your chosen platform doesn’t have a particular payment gateway on its list, you either need to rethink the processing solution or the platform.“What payment processors connect to the third-party gateways I can choose from?”In the same way that an eCommerce platform offers integrations with some external payment gateways but not others, payment gateways themselves work with a specific roster of external payment processors. You can never assume compatibility between a processor, gateway, and eCommerce platform.“Which combination of available payment gateways and processors meets my needs at the lowest price?”Once you’ve identified the eligible options, it’s a matter of adding projected costs and seeing which formula gives you the most bang for your buck. From the platform, you’ll pay membership fees in addition to the per-transaction rates determined by your processor and platform. From the payment gateway and payment processor, you’ll need to do similar number-crunching with monthly fees, per-transaction interchange rates, and other variable fees (chargebacks, international cards, etc.).

Does the mere thought of that much arithmetic make your head spin? Don’t panic. There’s another way.

SwipeSum is all about solving the payments problems that businesses face. Once you’ve chosen your e-commerce platform, SwipeSum can help you find the payment processing option that works for you. It’s simple, too. Just provide some basic info online (the consultation form takes about 60 seconds), and their algorithm will curate your top three custom solutions in just a few hours—and share them with you for free. They’ll give you everything you need: rates, required integrations, and processors. Waiting for the catch? There honestly isn’t one. If you have a great experience, you can sign up for ongoing benefits like a personal account manager, chargeback protection, and quarterly audits. But there’s no expectation or obligation. And, after all, the best bosses know when to delegate. Why not hand this project off to Swipesum?