The Most Popular and Reliable Payment Systems for Online Payments

With a Baymard study all but confirming that up to 9% of potential customers will abandon an online purchase because the merchant didn’t have enough payment options, businesses of all sizes now share one common problem – choosing the right online payment systems for their platforms.

I’m Aladár Kollár, a tech enthusiast deeply interested in business solutions. After exploring over a dozen payment solutions, I’ve narrowed down the top 5 most popular and reliable payment systems for online transactions.

What are Payment Processors?

The term “payment processor” is sometimes used interchangeably with other terms like “payment systems” and “payment service providers”. Simply put, a payment processor is a company that manages financial transactions between a merchant and a bank or debit/credit card provider. The payment processor basically reads and sends information from the customer’s card to both the merchant and the customer’s bank.

Payment Processors vs Payment Gateways?

If you’re new to this topic, you might confuse a payment processor with an online payment gateway. So what’s the difference?

While the payment processor takes care of or “processes” the actual transaction, the payment gateway is the software acting as an intermediary to enable these transactions. Investopedia describes payment processors as “the front-end technology that reads payment cards and sends customer information to the merchant acquiring bank for processing.” You can think of an online payments gateway as a middleman between the merchant account/payment processor and the credit card companies.

Keep in mind that some payment systems regard themselves as both payment processor and payment gateway, as they offer both services.

Types of Payment Gateways

As of today, there are four different types of payment gateways, namely:

1. Hosted payment gateway: This type of payment gateway is hosted by a third party. Customers are sent out of the merchant’s site to make the payment and then sent back to finish the transactions. The downside is that businesses have less control of their user experience this way, potentially increasing checkout abandonment.
2. Self-hosted payment gateway: Data is collected on the merchant’s site with the self-hosted payment gateway, allowing complete control of the user experience and checkout process. However, the merchant must handle payment data security and comply with standards such as PCI DSS.
3. API-hosted payment gateway: Payment details and processing are handled on the merchant’s site or app through APIs. Businesses must pay for SSL and ensure the payment process is PCI DSS compliant.
4. Local bank integration gateway: Connects directly to the bank payment system. The effectiveness of this type of payment gateway depends on banks’ tech and level of support for online transactions.

What To Look For in Good Payment Processors?

1. Security: When making payments online, security is a crucial factor to protect both the user’s money and financial data. So, I only included PCI-DSS-compliant payment processors in this list.
2. User interface and checkout experience: A 2022 research from Baymard involving 4,484 participants sought to uncover the top reasons for abandonment during checkouts. They found that “17% left because they thought the checkout process was too complicated or too long.”
3. Accepted payment methods: The more payment methods a processor accepts, the better. From the same study mentioned above, “9% set aside their purchase because the checkout didn’t include enough payment methods.”
4. Ease of integration: Integrating the payment processor on your platform or with a payment gateway should be simple and require little to no coding knowledge.
5. Location of users: The payment processor you integrate will also depend on the location of your users making or receiving payments on the platform. For example, a business with users from across the globe is better off with a payment system accepting various international payment methods.

The 4 Most Reliable and Popular Online Payment Processors

Paypal

Even after two decades of operating, PayPal remains one of the most popular and reliable payment systems for its range of service, speed, and reliability. PayPal is now available in more than 200 countries and supports 25 currencies. Another great thing about PayPal is that it offers other payment alternatives, such as PayPal credit and rewards balance.

PayPal is popular in every industry, from freelancing to e-commerce to travel and much more. However, one area where PayPal stands out is sports betting and casino payment processing. Because of its lack of transaction fees, speed of transactions, and reputation as one of the best eWallets in the world, PayPal has become extremely popular in Hungary. MightyTips outlines everything bettors need to know about using PayPal for sports betting in Hungary, including:

• The best betting sites that accept PayPal in Hungary
• A guide to PayPal deposits for betting in Hungary
• Making payments, turnaround times, fees, and limits with using PayPal, and
• Other general information about the PayPal payment method for betting

PayPal pros:

• PayPal is widely accepted globally
• It is the most convenient payment system for niche industries like igaming

Paypal cons:

• Withdrawals can take time

Stripe

If having alternative payment methods is a priority for your business, you cannot go wrong with Stripe, as they offer 100+ options for customers globally.

Additionally, businesses can collect credit/debit card payments in over 100 currencies. Its features make Stripe a good choice for international transactions and most retailer needs.

Stripe pros:

• Offers the most payment alternatives on this list
• Has one of the largest catalogues of international payment methods

Stripe cons:

• The setup can be a bit complicated

ApplePay

As Peter Olynick said in 2012, “Within five years, half of today’s smartphone users will be using their phones and mobile wallets as their preferred method for payments.” A decade later, over 50% of the participants in a Forbes survey say “they use mobile wallets more often than traditional payment methods.”

ApplePay is among the most popular mobile wallets after PayPal, as iPhone users have skyrocketed globally. ApplePay allows credit/debit cards, Apple Cash, PayPal, and balance from redeeming gift cards.

Apple pros:

• Convenient mobile wallet
• More secure than a physical card

Apple cons:

• You cannot use ApplePay without your Apple device.

Revolut

If you need to offer a virtual debit/credit card payment method, Revolut is one of the best virtual payment processing solutions out there. Customers’ interest in virtual cards is steadily rising as they provide unique security advantages over physical cards, such as:

• Anti-theft: Virtual cards cannot be stolen like their physical counterparts
• Extra privacy: Virtual cards do not disclose your financial details to merchants
• Advanced security: Virtual cards can be locked and unlocked

Revolut pros:

• Offers virtual payment processing
• Fee-free money transfers Mon-Fri (subject to limits)

Revolut cons:

• Lacks full banking services

A Final Word

The best payment processor for your business mainly depends on your customer’s location and preferences. However, you must also consider the type of payment gateway and the quality of user experience it offers your customers.

PayPal came out on top of our list as the most popular and reliable payment system for online payments due to its reputation, global reach, and versatility for payments such as sports betting in Hungary. Stripe, ApplePay, and Revolut are other payment alternatives you should consider integrating into your platform.