Are All Payment Processors The Same?

Payment processing is the beating heart of making money online. Without a way to collect payments, all the fancy sites and great products would be worthless. Oh sure, we could resort to having people send us checks in the mail. Good luck with that. Most won't bother. Truth is, without payment processing systems, we'd be out of business. But, are all payment processors alike? This article is going to cover two of the top payment processors to show how they are dramatically different and how you need to be aware of these differences.

Let's start with Clickbank. Actually, Clickbank is more than a payment processor. It is also an affiliate marketplace. If you have your own product to sell and sell it through Clickbank, they will actually display your product in the marketplace in order for you to attract affiliates. This is one of the big advantages of using a payment processor like Clickbank. However, there is a downside. Clickbank holds your money until their pay period is reached or, if you don't make enough sales, until your threshold is reached. This can really put a crimp into your cash flow. So if you use Clickbank, make sure you have enough money to pay your expenses until you actually get paid.

Another big payment processor is PayPal. PayPal does not have an affiliate showcase. So if you sell a product through them, you're on your own to create your own affiliate program and pay affiliates yourself, whereas Clickbank pays them for you. This can be a real pain in the backside for somebody just starting out. On the plus side, with PayPal, as soon as the money comes into your account, you can have it transferred to your bank account. There is no waiting period. Transfers happen in about 3 to 5 business days. So as you can see, there are advantages to going with PayPal instead of Clickbank.

Both payment processors have their own TOS and it is critical that you read them. Failure to do so can get your account closed. And if your account is closed, especially by PayPal, good luck trying to get another one. It's close to impossible.

And I haven't even gotten into the fact that some countries don't have access to certain payment processors, mostly because of fraud.

Bottom line...it is important that you assess your needs when choosing a payment processor. The wrong choice can turn your business into one ugly nightmare.