Online Payment Method Comparison

For an e-commerce site there are a lot of payment options available: Credit Cards (Visa, Mastercard), Paypal, Google Checkout, Authorize.Net, Bank Transfer, Cheque, etc. But which one should you choose? PayPal is already almost a synonym with online payments, and that's for a good reason - it's really easy to get started with. However, PayPal is relatively pricey and it well might be that you'll get better conditions from your local provider.

The table below highlights some features that important are for merchants. The terms in the table are explained underneath.

1. PCI free: no need to be conserned about Payment Card Industry Data Security Standard (PCI DSS) complience
2. IPN: Instant Payment Notification (IPN) means that the payment operation can be finish during one session; there is no delay before the merchant receives a confirmation of a succesful transaction.
3. Credit and debit card transaction fees and discount rates vary a lot. Additionally there might be setup and monthly fees. Listed Credit Card fees are from two Authorize.Net resellers. (Authorize.Net services are available for US market only. There are plenty of payments method comparisons online, so you should be able to get a better picture of the local selection. Finally, request offers from your local gateways.)
4. On-site: User remains on the website for the duration of whole transaction. Since the merchant is relaying credit card data, she has to take care of securing the server in accordance with PCI standard mentioned above.
5. Off-site: User pays on a payment page hosted at the website of the payment gateway. The payment gateway handles the payment and returns the user immediately back to the merchant's website.
6. Debit Card: Some gateways treat Debit Card payments just like Credit Card payments, while the others might give a remarkable discount for them. A Finnish payment gateway Luottokunta charges only half of the normal discount rate.
7. Bank transfer: (a.k.a. Direct bank transfer, Giro transfer, Direct deposit, Wire transfer) Output an invoice and let the user take care of it whenever he wants. Note that your bank might charge a fee for every incoming payment.
8. Instant bank transfer: (a.k.a. Instant online debit payment, E-Payment, Web payment, Finnish instant payment notification (FIPN), Finnish: verkkomaksu) User pays on a payment page hosted at the customer's own online bank. The downside here is that the merchant has to make an agreement with every bank individually, or otherwise he would exclude certain users of other banks. Read more about Finnish instant bank transfers.
9. Source: Finnish web payment fees (Majority charge 0.35 EUR.)
10. Source: PayPal payment fees (2.9% for a small operator.)
11. Suomen verkkomaksut is a Finnish payment gateway that aggregates all the instant bank transfer services from different banks
12. Source: Finnish web payment gateway fees