Have you come to the point when you want to earn money and you need to choose a Payment Service Provider (PSP) to integrate with your app or website? How do you choose the right one? Is it secure? Easy-to-integrate? If so, you are on the right page. Here we will share our Mind Studios experience to help you to make the right choice!
What Is PSP?
Let’s start from the explanation of what PSP is?
“A payment service provider (PSP) offers shops online services for accepting electronic payments by a variety of payment methods including credit card, bank-based payments such as direct debit, bank transfer, and real-time bank transfer based on online banking. Typically, they use a software as a service model (SASS) and form a single payment gateway for their clients (merchants) to multiple payment methods.”
That’s what Wikipedia says. But, we will try to avoid giving you too much text and theory. You just want to make the right decision, correct? There are more than 900 payment providers around the world. More than 300 offer services in Europe and North-America. Of course you could try to integrate all of them and became a Jedi of integration. But, here in Mind Studios we’ve already done a number of integrations like these and have chosen the best PSP’s.
Think About Your Project
Choosing the right payment gateway for your online business is an important task but this could be confusing. There are so many things to consider, such as fees, recurring billing, and even currency support.
First of all, ask yourself:
Where do you want to sell your products? Where is your target audience? This is important, because some payment service providers don’t work in some countries. Here is a basic list.
Where do you want to integrate the PSP? In a mobile app or on a website? Or both?
If you want to integrate PSP into mobile app, don’t forget to check if selling products in the way you want contradicts the guidelines from Apple or Google (some of them require you to only use their in-app purchase api). For example, if you’re going to sell content or digital goods which will be used within an app, then you must use the in-app purchase. Apple and Google both say:
“Apps utilizing a system other than the In-App Purchase API (IAP) to purchase content, functionality, or services in an App will be rejected.”
What kind of payments do you want to accept?
What currencies will you support?
What type of billing will you support? Recurring payments, subscriptions, one-time payments?
Do you want customers to enter their payment details directly on your site?
Are you in a ‘high-risk’ business? It’s important to know if it will be easy for you to refund money and if this operation is supported by the payment gateway.
Answers to all the above questions will give you the requirements for the PSP.
Our Formula For Success
Based on our experience, the most popular and efficient combination of payment service providers is: PayPal + Stripe.
Why? Paypal works almost everywhere and lots of people prefer paying with their PayPal account rather than paying with a credit card. And for those who want to pay with credit card - Stripe is a great option! Paypal also allows customers to pay with a credit card, but compared to Stripe and in terms of integration and user experience, it’s better to just use Stripe. We will explain why soon. So, this formula covers most of the potential transactions and allows you to increase payment conversion rate on your website or app.
PayPal is a Big Player
Just take a look at the market share in 2015:
(Market Share of Payment Gateways in 2015)
As you can see, Paypal is the leader. That’s why it’s better to support it by default. Besides being popular, why is Paypal part of our formula?
It’s good when you don’t need to keep your users on your website or in your app to make a checkout
Paypal provides lots of ready-made solutions for different types of integrations, for example, Paypal Express Checkout, Paypal Button, Paypal Here etc.
Paypal is a large and powerful company. They can solve every issue and dispute. Here at Mind Studios, we are really thankful to PayPal for preventing, investigating and solving activities such as fraud, unauthorized access, refunds etc. You will always be able to rely on them and their corporate machine.
However, from the chart above you can see that Stripe is growing and it has lots of its own advantages.
Stripe. Stripe. Stripe.
First of all, here are some facts based on research made by different agencies: Stripe has been integrated by 3,558 new websites in the year 2015 alone. By comparison, Paypal lost 2,105 customers during the same period. Customers are shifting towards Stripe, but Paypal still has a 91% market share (websites) in payment gateway integration. Why is this? PayPal suffers from scale, age, and bureaucracy. Whereas Stripe, with it’s improved technology and much easier integration is conquering market share. Stipe advantages are great customer service, extremely user-friendly API, security and it is easy to integrate.
Believe it or not, but Stripe was initially created by developers, for developers. These guys simply solved the most common issues which every developer has:
Complexity of integration and support.
Customer support. Stripe has a Customer first approach: They provide open channels for email support, they even have an IRC channel (#stripe on Freenode) where developers can communicate with real engineers and get live help from them.
Data portability issues. Having the ability to make credit card data portability is a great feature from a business perspective. If you decide to leave Stripe, they help you migrate the credit card data in a secure and PCI-compliant way. And your existing customers do not have to sign up again so there is no chance of losing them.
A weak account management interface. For example all PayPal users often have issues with it’s Dashboard and interface. It is slow and not very user-friendly, so it’s always a challenge to perform simple functions like a transaction refund. Stripe has a really powerful dashboard and fast interface. It clearly shows bank transfers and HTTP request logs.
Hard to test. In Stripe you won’t spend time configuring Sandbox environments, it’s test mode much easier.
As a result, Stripe was valued at $3.5 billion in a recent funding round. It has a customer base that includes OpenTable, Salesforce, and Rackspace. They are also handling payments on Facebook and Twitter sites and apps!
Now you have a combination of two PSPs to start with - Paypal + Stripe. Paypal for payments via a paypal balance and Stripe for credit card payments on the site or within an app, so your users don’t have to leave your app. As a result, payment conversion rates will be higher. Ask yourself the right questions to determine whether both these payment gateways are needed in your project. This combination has proven itself as one of the most efficient and popular on our projects. Mind Studios has a lot of experience integrating these payment gateways in all kinds of apps and websites. Based on your business needs, we do an analysis and provide the best gateway solutions. Please follow us and our blog and we will share our PSP integration and testing experience, along with many, many other interesting concepts!