Options for streamlining your online checkout

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Merchant Account Guide > Merchant Account News > Options for streamlining your online checkout

Options for streamlining your online checkout

Convenience is the name of the game in the world of online shopping, so it's no surprise that competition is heating up among companies that promise to streamline the check-out process for online merchants.

According to "Understanding Shopping Cart Abandonment," a May 2010 study by Forrester Research, 21 percent of online buyers surveyed cited confusing check-out processes and failure to accept preferred payment methods as the reason they did not complete a recent transaction. Eighty-eight percent of online buyers say that they have abandoned an online shopping cart -- a phenomenon known as "cart abandonment" -- without completing a transaction, according to Forrester Research.

Many merchants therefore turn to third-party service providers for streamlining the checkout process. What exactly these services do varies. Some prevent merchants from having to get merchant accounts altogether. Some act as the middle-man between online shoppers and an existing merchant account (and take the burden off merchants when it comes to PCI compliance). Others allow shoppers to use their digital wallets instead of entering card information on the merchant's site. Some do a little bit of all of the above. Whatever the case, these third-party services save merchants the hassle of setting up software that accepts payments from customers.

"A third-party service, such as Google Wallet or Amazon Checkout or even PayPal, can be more convenient for consumers as it avoids the entering of credit card numbers, billing addresses and so forth," says Kerry Murdock, publisher and editor of Practical eCommerce, an online magazine that helps e-commerce merchants improve their businesses. "Also, some consumers view those services as more secure than providing a credit card to an independent merchant."

Need help streamlining your online check-out? Use our chart below to compare six of the main contenders.

Compare online checkout solutions
Product	How it works	What's in it for merchants?	Costs to merchant	Merchant payouts
Braintree	Sellers go through a brief underwriting process to open up a Braintree account (essentially a merchant account). Once that happens, sellers can start accepting payments from customers in the U.S., Europe, Canada and Australia.	Braintree offers a wide range of services, including gateway services, reporting functionality, secure card authorization (with AVS and CVV), and credit card verification (ensures active, valid card without holds or running transaction). Handles PCI compliance on behalf of the merchant.	"Full-stack" payments platform: 2.9% plus $0.30 per transaction. $15 chargeback fee "Payment gateway" option: If you already have a merchant account, you can make Braintree compatible with it for $49 a month, plus 10 cents per transaction.	Merchants get money in 2 business days for most transactions.
Checkout by Amazon	Online sellers add Amazon checkout button to their websites. Customers sign into their existing Amazon accounts and use cards they've already stored with Amazon to pay.	Because many online shoppers have almost certainly paid with Amazon at some point, they are likely to already have an account -- and can therefore easily shop at your store without entering card information.	Transactions above $10: 2.9% + $0.30 per transaction. Transactions under $10: 5% + $0.05 per transaction. Discounts for large transaction volumes available.	Funds are deposited in merchant's Amazon payment account after order ships. If the seller has linked a bank account to the Amazon payment account, funds will be disbursed to that account 3 to 5 business days after the seller confirms the order was shipped.
Google Wallet (formerly Google Check-Out)	Merchants can use Google as their payment processor, or keep their existing payment processor (and simply add a "Pay with Google Wallet" button to their website for free). Customers pay by using their own Google Wallet accounts.	Provides a fast, secure checkout process. Offers fraud protection. Merchants don't have to handle payment info.	If you already have a payment processor: Free Using Google as you payment processor: 1.9% to 2.9% (based on previous calendar month's sales) + $0.30 per transaction. 1% additional fee when merchant's country is different from buyer's. $10 chargeback fee plus cost of chargeback, if merchant is liable. Additional fees applicable in some cases.	Payout schedule varies, with longer payout times for new accounts. Under "standard" payment schedule, payout initiated within 2 business days after a successful charge. It may take your bank up to 3 additional days to register it.
PayPal	Depending on account level, merchants can accept credit cards and PayPal payments on their websites, send online invoices and more.	Provides fast checkout. Customers do not need a PayPal account (but can use theirs if they wish). Gives seller almost immediate access to funds, and various options for accessing funds (including through a PayPal debit card linked directly to merchant's PayPal account).	Offers 3 account levels: PayPal Payments Standard (no monthly fee), PayPal Payments Advanced ($5 a month) and PayPal Payments Pro ($30 a month). The more expensive the account, the more control the merchant has over the customer's check-out experience. Across all accounts, transaction fees are 2.2% to 2.9% (depending on total sales) +$0.30 per transaction.	After payment, money shows up in merchant's PayPal account within minutes. Merchant can then transfer the money directly to a bank account, spend it wherever PayPal is accepted, or access it with a PayPal debit card (and earn 1% cash back).
Stripe Connect	Online marketplaces (i.e., Shopify) sign up for the service and extend it to their users (small online sellers), which then add a Stripe Connect button to their pages. Customers can pay by card, and Stripe Connect takes responsibility for customer data.	Any online seller can accept payments (or donations) without establishing a merchant account. Merchants get charged only when they earn money (for successful payments).	2.9% + 30 cents per successful charge (automatically deducted from the payment). $15 fee for chargebacks.	After successful payment, earnings are transferred to the seller's bank account on a 7-day rolling basis.
MerchantAccountInformation.com survey of leading checkout streamlining solutions. All terms and conditions are subject to change. Chart updated January 8, 2013.

Published: January 8,2023

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