Online Checkout Options – Which is Best for Your Business?

When looking for a payment processing method, online merchants need to take several things into consideration:

  • Ease of transaction
  • Customer convenience
  • Security
  • Cost
  • Support

The benefit to the business and to the customers depends in part on the type and size of the business; some online payment companies charge based on volume, some on transaction amount, some charge for both.

We’ve sifted through the most common online payment services types, and here is a rundown on how they stack up.



Google Checkout is another in Google’s growing line of business products and solutions. The set up is fairly straightforward. You can either sign in using your existing Google account, or sign up for a new account with Google Checkout, providing your business information.

Once you open your account, you customize the way you will interact with customers via the addition of widgets, buttons, and other options, including mobile services.

There is no cost to set up a Google Checkout account, and the monthly fees are charged on both a percentage basis and a per transaction basis. The per transaction fee remains at $ .30 per transaction regardless of sales volume.

The monthly fees start at 2.9% for sales below $3,000, and fall to 1.9% for sales over $100,000.

One of the main objections to Google Checkout is the requirement that customers also have an account in order to use the service. Some customers of businesses who use Google Checkout also complain about the amount of spammy help-mail they receive from Google.

Another major drawback is the requirement that all customer payments to new Google Checkout accounts are held for 10 days before they are available. If a company has to ship items, that means a large expense out-of-pocket until the funds a recouped.


  • No fees for withdrawing funds.
  • Ability to email invoices.
  • Secure checkout.
  • Free fraud protection.


  • Customers required to have a Google account.
  • Not cost-efficient for large sales volume.
  • Inability to itemize invoices.



Paypal is one of the best-known of the online payment services, and is very similar to Google Checkout in many ways. There is no setup fee, and the per transaction fee is the same. The monthly fee starts at 2.9% and dips down to 2.2%. There is an international business fee of 3.9% charged on top for overseas orders.

One disadvantage is, unless you have a Paypal debit card, funds aren’t available to your personal or business bank account for for up to 3-4 business days. You must have an active account for at least six months to qualify for a Paypal debit card, and there are additional fees for its use.

It is difficult to customize the way you do business with Paypal. The shopping cart is very basic and doesn’t compute discounts or sales tax, and the available tools are very basic. You can customize invoices to a certain extent, and you can create and save invoice templates.

There has also been somewhat of an issue with Paypal suddenly shutting down accounts with no notice, though the dispute resolution process can clear things up within 2-7 days.


  • Name recognition and trust factor.
  • No set-up fee and no monthly fees.
  • Ability to itemize and print invoices.
  • Higher volume equals savings.
  • It is easy to process international transactions.


  • Cost to merchant if the client pays from their Paypal account.
  • Money is not immediately available in merchants personal bank account when transferred.
  • Estimating and adding shipping costs is not automatic.
  • ‘New Merchant’ payment withholding.



Though some people are put off by the set up fee when considering a merchant account, this fee is mitigated by the lower cost over the long run and greater flexibility offered by merchant accounts over other payment options.

The fee can range from $99-600, and monthly fees vary widely depending on where you open your merchant account, but they are generally lower, especially as your sales volume increases. The lower-cost option is to find an online merchant account provider, unless you prefer the convenience of working with your local bank.

Merchant accounts offer greater flexibility in customization of invoices, security, privacy, and shipping methods. Funds are generally available the same day the transaction is processed.


  • Flexibility
  • Ability to offer customized coupons and invoices.
  • Choice in shipping methods.
  • Account can be set up through your local bank.


  • Set up fee.
  • Customer recognition for new businesses.
  • International shipping is more difficult.

The ability to offer customers a convenient and easy payment method is key to retaining customers and inviting repeat business.

Overall, Paypal is a good option if you are a relatively small enterprise that needs only basic invoicing and customization options and has a relatively low monthly sales volume.

Google Checkout is very similar to Paypal, but the disadvantages make it the least attractive option.

The flexibility, convenience, and low cost by volume of a merchant account makes this an attractive option, especially for mid-sized and larger businesses. Shop around to find the best merchant account for your business.


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SMB Reviews
SMB Reviews 473 posts

SMBReviews is committed to providing small and mid-sized business owners with the information and resources they need to select the best service or product for their company.

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