LESSON #53: Payment Processing Solutions for Online Businesses

By | November 6, 2009

In the previous few lessons we’ve been looking at how to create a sales letter.
But a sales letter isn’t going to sell anything for you unless you’ve got a way of accepting money…

(Watch this video…)

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Main points:

  • You need to accept online payments to be successful with this business model.

  • When it comes to accepting payments for your products online, in general I would AVOID…

    – Money transfer services (like Western Union)
    – Alternative “currencies” (like E-gold)
    – “Offshore” banks and payment processors

  • Payment solutions I would recommend…

    1) Merchant Account

    -Also requires a Payment Gateway (ie. Authorize.Net), and possibly a shopping cart.
    -Beware the horror stories and choose a good provider.
    -I recommend PowerPay

    – Pay less fees (in many cases)
    – More control (upsells, processing, ownership, interface, etc)
    – Ability to process offline payments. (Mail, phone, etc)

    – Responsible for credit card security.
    – Can be difficult to obtain outside of the US.
    – Can be more complicated.

    If you are processing credit cards on your website, it is also essential for you to have PCI Compliance. For this I recommend McAfee PCI Certification Service (Only $99 for up to 4 sites)

    2) 3rd Party Payment Processor

    I recommend PayPal

    – It’s convenient.
    – They handle the security.
    – The fees are reasonable.

    – They can freeze or close your account.
    – Not accepted in all countries.

    Why might PayPal freeze or close your account?
    – They suspect fraud.
    – They suspect spam.
    – They perceive your product to be a violation.
    – They perceive you to be high risk.

    How can you stay out of trouble with PayPal?
    – Play by the rules.
    – Provide everything they ask for.
    – Notify them if you’re going to be doing high volume.
    – Ask them if there is any additional information you can provide.

    What can you do if your account gets frozen or closed by PayPal?
    (Please see video for how I recommend handling this kind of situation)

    3) 3rd Party Vendor/Reseller

    Technically they are “selling” your product.

    I use and recommend:


    – It’s convenient.
    – They handle the security.
    – Some have integrated affiliate programs.
    – Some accept PayPal in addition to credit cards.

    – Usually have higher fees.
    – Many of the same risks as other payment solutions.

    Regardless of which solution you choose…

  • It’s good to have a backup payment solution.
  • Offering two payment solutions (ie. credit card or PayPal) can boost your conversions.
  • Be sure to take care of your customers and avoid credit card chargebacks.

    Action step:

    1) Choose at least one payment solution.

    In the next lesson, we’ll create a payment button and a thank-you page!

    As always, you are welcome to post your questions and comments below.

    Have a great day!

  • 121 thoughts on “LESSON #53: Payment Processing Solutions for Online Businesses

    1. Suzanne Glathar

      Your lessons are the greatest I have been going through each one and doing the steps. I have a question about paypal. My business is not registered. Did I attempt to signup in the wrong section of paypal for a merchant account.

    2. Harsha

      Hi Eric,
      I am from Sri Lanka.
      Your lessons are the greatest lessons I have found.
      Those lessons are very very helpful.
      For the services we are rendered in Sri Lanka I want to accept world wide credit card payments through my website.
      But in my country We can’t activate receive money from paypal.
      I tried 2CO,they also not allowed,
      I tried Moneybookers, They also not allowed
      give me a good solution for this.
      Thank You

    3. Eric Post author

      I do not know the specifics for Sri Lanka, but I recommend keep looking for a solution. There are possibilities for all countries. In some cases you may have to set up an entity outside of your country. Be sure to look at 3rd party solutions such as ClickBank and Plimus that may act as a go-between. Also check out this article for some inspiration: http://www.ericstips.com/tips/ladan-lashkari/

    4. Prue

      Hi Eric,

      What’s your thoughts on E-Junkie as a merchant for products? Are they as good as clickbank? Please advise.

      Thanks for your help.

    5. Prue

      Hi Eric,

      Do you need a shopping cart to sell your products through clickbank, 2checkout or paypal?

      I’m having someone do a site and they insist on me getting a shopping cart to sell through E-Junkie.

      Please, let me know.

      Thanks much,


    6. Micah

      Hello Prudence,

      No, a shopping cart is not always necessary. Most of Eric’s sales pages simply have the order button provided by our payment processor (ClickBank, PayPal, etc.)

    7. Patrisha

      This is for Eric.
      I signed up and tried to log a ticket but I’m having trouble finding a place to type.
      I’ve clicked on just about everything there but I still don’t see how to do it.
      I have been following your tips very carefully, however I already knew how to create and sell ebooks, so, the problem I’m having is with PayPal. I cannot after about 2 years get anyone to help me.
      The problem I have is in the customer not getting my Thank You page which will have the link to their product.
      When creating my ‘Buy Now’ button, there is a form field that asks for the URL where I want my customer to go AFTER they have paid PayPal. I inserted that URL, and yes, I ‘m sure I did it correctly and saved it, but the customer only gets a receipt from PayPal which does not include the link to my Thank You page which would consist of their download link.
      So, basically, they get NOTHING for their money, sooooo, I ask you, can you help me get this straightened out with PP?
      I have tried MANY, MANY times via phone and email to make them aware of this and get it corrected but all I get is empty promises to get it fixed.
      So, in essence, the customer clicks on my buy now button, pays paypal, gets their receipt, but they get nothing from me on the receipt, so they get nothing for their money.
      Oh, by the way, I have set up the forwarding program at pp where they ask you to tick the radio buttons where you specifically tell them that you want your customers to be redirected to your thank you page URL.
      Please help. If you cannot, please advise.
      Thanks for anything you can do.
      I Am,
      Patricia Porras

      P.P.S. Last, but certainly not least, THANK YOU so much for the priceless information you share with us for free. I have learned a lot.

    8. Anna

      Hi Eric I enjoy these lessons I have learned a lot about internet marketing. Thank you Eric. I have two questions. I opened a PayPal account recently My question is do I need to have separate code for credit cards and for PayPal buy button.My next question is; I have a click bank ID, how do I sign up for payment process account.

    9. Sean Wellington

      Hi Eric,

      Perhaps the wrong message for this particular lesson, but wondering about my (future) web site.

      I understand that WordPress is the place to be for an almost free site and, more than ever, a user friendly system.

      That said, what’s your opinion about sites like Wix and probably hundreds of other similar ones- seems like for people like me, the drag and drop is really much easier and we can focus our time and energy on other things, like our business. Costs aside (theyre still relatively small), do they tend to have other drawbacks I may not be considering- widgets and plugins? page rank? etc?


    10. Eric Post author

      You’re right, there are a lot of other viable platforms out there. And the most important thing is the content of your site, and how you run your business, rather than the website platform it’s built on.

      In the case of Wix ond others like it, I’m not a big fan, because they’re basically trying to sell hosting to you (ie. the premium package). And it’s difficult (and in many cases impossible) to move your site to another host.

      WP is the most used website CMS in the world. It is supported by most web hosts, and can be easily moved. It has a plethora of free widgets and plugins available. Also… it has become fairly “drag and drop”, with their widget system.

      WP also tends to be SEO friendly, and automatically generates a navigation system that works for people and Google. A lot of the site building platforms that are more graphic-based tend to be inferior in this area.

    11. Lynda Duplessis

      Thanks so much for this information. I was wondering how this would be possible.

    12. Hans Jurgen

      Effective June 1st 2015. Paypal has set up in their TOS (terms of service) stating that if you use them as your payment processor. Their new policy stipulates they have the rights to own your content on your site. Yes it infringes copyright laws and I don’t know how this will end up in court. It is something to consider in these changing times. This is something I was just made aware of in the past few days.

    13. Marc M. Demers


      There is now so many new options available including Bitcoin.

      This subject needs to be updated but I understand that the market is moving fast when it’s time to choose payment processors.




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