What is a payment provider?
A payment provider is a company that processes payments between customers and sellers. Essentially they make it easy for sellers to get paid!
There’s a lot more to processing a credit card transaction these days than just entering a number, which is why most companies go through a payment provider rather than dealing with the credit card companies directly.
Here are just some of the service offered by most payment providers:
- Currency conversion
- Accepting different card types (American Express, VISA, Master card, Etc)
- Customer address verification / anti-fraud measures
- Accepting different payment methods (Contactless cards, Visa Debit, Etc)
Without a payment provider, merchants would need a separate relationship with each credit card company and payment type. Due the the volume of transactions that payment providers deal with, they often get preferential rates from credit card companies which can more than make up for the fee that payment provider charge.
PayPal is one of the world’s largest Internet payment companies. It was established in 1998 and offers payment processing to merchants all over the world.
Their fees break down as follows:
|Sales within Canada:||1.9% to 2.9% + $0.30 CAD per transaction|
|Discount rate for charities registered with the CRA:||1.6% + $0.30 CAD per transaction|
|Sales to the US:||2.7% to 3.7% transaction fee + fixed fee (based on currency received)*|
|International sales (excluding the US):||2.9% to 3.9% transaction fee + fixed fee (based on currency received)*|
Papal offers a good variety of solutions for vendors, from a simple hosted pay page that is easy to configure, to fully customizable payment processing. Their developer documentation is not as complete as Stripe but it’s enough to get started.
The stripe fee model is simple: 2.9% + CA$0.30 regardless of country.
Stripe’s fees are lower than paypal initially but become more expensive for larger businesses due to paypal’s volume discounts.
Moneris Solutions is canada’s largest payment processor. Moneris was established December 2000 as a joint investment between RBC Royal Bank And BMO Bank of Montreal.
Moneris charge one of the lowest fees around: 2% + $0.10 per transaction
Moneris also offers instant deposit for all transactions, a huge advantage compared to up to 7 days with stripe.
The main downside to Moneris is their application process, which can take weeks to process. Being owned by banks, they tend to operate like a bank; Using tried and true, but outdated technology. Both Paypal and Stripe take less than 10 minutes to sign up.
A major issue with Moneris is that they don’t allow you to test your payment configuration. You must use a special test account if you want to do any testing, and then copy the configuration to your live account. Overall I would not recommend using Moneris for e-commerce. If you operate a retail location and also sell things online, moneris could be a good solution as they offer retail POS services as well.