UPDATE: Newer Options with Cryptocurrency
Online payment methods have seen tremendous growth over the past couple of years.
The standard, PayPal, has dominated the ecommerce payment market for years (1999 to be exact). It is, by far, the most widely used payment service.
But there are several competing services recently which both advance and confuse consumers’ choices. We’ll take a look at two of the more advanced options here: Venmo and Zelle:
Venmo is actually PayPal under a different name. It’s focus is on mobile payments with a social feature that can disclose who paid who (without the amount). After several lawsuits, users can opt out of that feature.
The key focus of Venmo is to make splitting payments among friends easier (dinner, rent, groceries, etc.) and not as a robust business processor. This is changing rapidly as they have begun to allow certain merchants to accept it as a form of payment. The integration with ecommerce platforms is problematic because of this and requires that the merchant also accept PayPal. There some clunky work-arounds, including the use of QR codes. Be aware that Venmo is restricted to US accounts. (Source)
This one’s a lot more complicated. In essence, Zelle was created by major banks as a way to transfer funds quickly. Wire transfers are expensive and slow. Zelle allows almost instant deposits into your existing bank account.
Zelle is bank-centric, meaning, it’s not an app per se (although there is one) but a service and is made available through your existing checking account. In other words, you use Zelle through your bank directly. Money received does not go into a seperate, Zelle-branded account which then needs to be transferred.
The pros are that it’s absolutely free and it’s nearly instant.
The cons are that it’s composed of over 400 banking institutions who can impose any type of regulation or fee they see fit. I’ve personally ran into situations where a business account could not be used to either send or receive money (sometimes). Most smaller banks are open to using Zelle, but smaller, regional banks may not be.
Zelle’s stance on ecommerce is a little unclear. If both you (the merchant) and your consumer are already using Zelle, then it’s just an issue of requesting money and getting paid. However, if your an ecommerce merchant, it gets complicated. There’s an application, forms, tax records,and even then, you’ll need to also get a Braintree account (which is owned by PayPal!) for some reason that confuses me. Read more at: zellepay.com
As an ecommerce developer, I find that integrating either of these payment options is prohibitively complicated. I’ve integrated a few work arounds on my site and I’ll report back with how it goes. I also see an incredible opportunity here to challenge the near-monopoly that is PayPal. Other processors, like Google Pay, Apple Pay, Square, etc. are also actively developing new tech and services that will keep this marketplace fluid.
cgk.ink understands how important choosing the right merchant account is to your online business. Let’s discuss what’s most important to you: