ECOMMERCE IN THE ENTERPRISE - Comparing Online Payment Technologies

Each system works in somewhat similar ways. Each collects your banking and personal information via Web pages. They can link your standard checking account, credit card, and merchant accounts too. Each requires you complete a verification process before you can send money around the Internet. In some cases, the verification actually increases your spending limits. When money moves to or from your account, you receive an email notifying you about the situation. Additionally, you can login to a secure Web site, view your account status, and direct payments to specific parties or transfer funds around.

PayDirect sets your spending limit to $200 every 180 days when you verify your email address. That isn't much. However, verifying your address by having them send you a letter will set your spending limit to $1,000 every 30 days. PayDirect charges no fees for sending or receiving funds, but you must setup a Yahoo! ID and email address as part of the transaction.

As a consumer, I prefer PayDirect as it is the easiest to use. However, the spending limits are too low, being designed for personal transactions. Note that this is a different system than a storefront on the Yahoo! store system. The Yahoo! store system lets you establish your own merchant account and accept credit card payments directly into that account for a monthly fees.

BillPoint charges 2.25 or 3 percent plus 30 cents per transaction and limits you to $500 and $2000 per transaction, depending on your type of account. To get the higher transaction limit (and pay the higher fee schedule), you must either qualify as a higher-volume seller on eBay, have at least a 20 in your feedback score with at least six months' selling history on eBay, or pay a small fee and have your home address verified by a third-party credit agency service. If you do plan on using eBay to sell your merchandize, then they can setup your storefront for $10 per month. Technically, this isn't part of the BillPoint system but you still pay a recurring charge to use it. If you aren't planning on making use of the eBayStores to sell your goods, then I would steer clear of BillPoint. Again, it isn't really designed for merchants.

PayPal charges fees for receiving funds, but not for sending. They take 2.2 percent plus 30 cents per transaction. PayPal has an initial spending limit of $1000 that is removed when you verify your account. You can receive up to $100 a month with the entry-level account and can upgrade easily to their premier account to accept unlimited credit card payments.

Setting up accounts is relatively easy. PayPal asks you to verify two small deposits made to your bank account to establish the link between their system and your bank. In my case, somehow I managed to make two withdrawals from my bank account to pay for a single item although the merchant only got paid once. Despite this glitch, which may have involved the way I processed the payment for an auction that I won, PayPal makes the most sense for overall merchants. Being the most popular service, I would also recommend it for your storefront and for a merchant (or what they call a premier account) with them.

Online payment systems are still undergoing some changes, but seeing if this next wave of providers can perform better than the first will be interesting. The good news is that at least it is easier for web storefront owners to open merchant accounts these days. And if you have any comments about these, I'd love to hear from you. Good luck processing your own payments.