Does managing online payments drive you up the wall? Well, maybe you just haven't found the right tool yet!
When it comes to online payment solutions, each platform claims to make the lives of e-commerce merchants easier. But between marketing promises and reality, which one is really the simplest, the most cost-effective, and, most importantly, the most compatible with your accounting processes ?
Today, we're comparing 4 popular solutions: Stripe, PayPal, PayPlug, and Square. And beyond their ease of use, there are also some subtleties every e-commerce merchant should know about.
The 4 essential online payment solutions
Stripe: The ally of ambitious startups and SMEs
Stripe is probably the leader in the online payments market for startups and innovative SMEs. With its ability to easily integrate with a multitude of e-commerce applications (like Shopify, for example), Stripe offers a robust and flexible platform.
Pricing-wise, Stripe charges 1.4% + €0.25 for European cards and 2.9% + €0.25 for non-European cards. The best part about Stripe? Its extensive developer documentation, making technical integration smooth.
For whom? Stripe is ideal for businesses looking for a scalable, customizable solution, with powerful APIs for bespoke integrations.
PayPal: The well-known giant
PayPal is often the default choice for those looking for a hassle-free solution. PayPal’s practical side lies in its widespread recognition and adoption by consumers worldwide, which can help boost conversion rates.
Fees-wise, PayPal charges 2.9% + €0.35 per transaction. PayPal also offers installment payment solutions for customers, which can be an advantage for e-commerce sites with higher-value products.
For whom? PayPal is ideal for e-commerce merchants looking for a reliable system without worrying about technical complexities or bespoke integrations.
PayPlug: The made-in-Europe solution for SMEs
PayPlug is a European alternative focusing on the needs of local SMEs. PayPlug offers a simple-to-configure, intuitive solution.
It charges 1.6% + €0.25 per transaction, making it a competitive option for smaller businesses. With a strong emphasis on security and anti-fraud management, PayPlug is a great option for businesses looking to optimize their transaction fees while staying local.
For whom? PayPlug is particularly appealing to European SMEs that prefer working with a locally-rooted solution, easy to set up and designed for French market needs.
Square: The all-in-one solution
Square is known for its physical payment terminals, but it also provides online payment services. The major advantage of Square is its complete ecosystem: you can combine in-store payments with your online store, all on one interface.
Square charges 1.75% per in-person transaction and about 2.9% + €0.30 per online transaction. It's ideal for businesses with both a physical and digital presence.
For whom? Square is recommended for merchants combining physical and online sales, wanting everything to be managed from a single platform.
The accounting challenge: fees everywhere, invoices everywhere...
Choosing a payment solution is one thing. But then comes the accounting challenge: how to efficiently record fees and commissions deducted by these platforms?
Each platform deducts its own fees, generates its own invoices, and often the deducted amounts aren't always clearly indicated.
Let’s take a concrete example.
Imagine you make a sale of €1,000 via Stripe. Stripe deducts a commission of 1.4% + €0.25 for European cards, which amounts to €14 + €0.25, for a total of €14.25 in fees. But here’s the catch—this amount is deducted directly from the transaction before the money is transferred to you.
You receive €985.75 in your bank account, and this is where the complexity begins.
You must record the total sale amount (€1,000) as revenue, then account for Stripe's commission as an expense of €14.25. And let’s not forget potential VAT on commission fees! The amount to be recorded must be broken down into VAT-excluded and VAT-included amounts, making the exercise even more complex.
This is where Blendy's expertise comes in. While Pennylane or QuickBooks can automate invoice collection and simplify accounting data integration, the correct accounting of fees requires a deep understanding of each transaction, VAT-excluded amounts, VAT-included amounts, and deducted commissions.
At Blendy, International CPA based in Paris, France we have already supported numerous clients in managing these subtleties.
Our experience allows us to ensure that every euro is correctly accounted for, eliminating the risk of errors and providing a clear view of the real profitability of your business. We use our expertise to relieve you of these complexities and turn your accounting into a true strategic asset.
So, which solution should you choose?
If you're a startup or an ambitious tech-driven SME, Stripe remains a solid choice with its flexible API and multiple integration options. For those looking for a hassle-free payment solution, PayPal is perfect, with its broad consumer adoption. PayPlug is well-suited for French or European companies that prefer a local, affordable solution. Finally, if you manage both physical and online sales, Square is ideal for centralizing all transactions.
But whatever solution you choose, never underestimate the accounting challenge that comes with managing transaction fees.
And this is where Blendy, International accountant, can make the difference: as specialists in accounting integrations, we help you streamline the recording of these expenses and make your accounting more fluid.
Schedule a call with Blendy today, and let us help turn your online payments into a strategic and stress-free asset for your business.
With Blendy, International CPA based in Paris, France, take advantage of digital accounting to accelerate your financial process and develop your business.
Pennylane, Dext, QuickBooks and Stripe certified, we support digital, e-Commerce, IT services, SaaS companies in France and internationally.