E-commerce Payment Systems You Should Know About

A guide to PayPal

While each e-commerce business is unique, everyone needs to monetize their websites to drive sales and grow their business. One of the biggest challenges most businesses face when starting an e-commerce site is processing payments. So many different payment systems are available that it can be overwhelming for new business owners to decide which would suit them. 

In this blog post, we’ll introduce you to five e-commerce payment systems and explain the pros and cons of each one. Keep reading to discover where you should start when evaluating your options for processing payments on your website.

What is an e-commerce payment system?

An e-commerce payment system is a system or platform through which payments for products or services are processed. The payment system can be an online payment gateway, a hosted payment solution, or a combination of both solutions. Some of the most common e-commerce payment systems include PayPal, Amazon Payments, Authorized Merchant Software/POS System, Square, and Google Checkout. Each payment system has different features, costs, and functionality.


The largest and most popular payment system for e-commerce is PayPal. PayPal was founded in 1999 and quickly became the most trusted online payment system. There are several reasons why PayPal has become so pervasive in the e-commerce industry. One of the biggest challenges when selling online is building trust between the buyer and seller. PayPal helps build trust by providing a safe and secure platform for buyers and sellers to send and receive payments. PayPal also generates valuable data that helps to improve marketing efforts.

Amazon Payments

Amazon Payments is a payment system that allows Amazon sellers to accept payments from Amazon customers. Amazon Payments is a payment gateway owned by Amazon and integrated into their seller platform. Amazon Payments is best for sellers who want to sell on Amazon and don’t want to invest in their payment processing solution. 

Amazon Payments has fewer features and lower processing rates than other payment systems. Amazon Payments is a good choice for sellers who don’t want to get into the details of payment processing and want to simplify their business as much as possible. However, sellers can’t use Amazon Payments as a payment gateway on their e-commerce websites.

Google Checkout

Google Checkout was Google’s attempt to create a payment system that was as ubiquitous as its search engine. While Google Checkout was once a significant player in the e-commerce industry and later evolved into Google Pay. Google Checkout and Google Pay are the hosted payment solutions — payment platforms managed by a third-party company on behalf of the e-commerce website owner. Google Checkout and Google Pay enable sellers to accept payments via credit or debit cards and alternative payment methods such as gift cards. Google Checkout and Google Pay are free to use for most sellers.

Authorized Merchant Software Or POS System

Many e-commerce businesses prefer using an authorized merchant software or point of sale (POS) system to process payments on their websites. Authorized merchant software or POS systems are payment platforms that integrate into existing e-commerce websites or can be used to build new e-commerce websites from scratch. 


Square is a payment system that allows owners of mobile businesses to process credit card payments on their smartphones. Square was created to make mobile payment processing as easy and convenient as possible. It is easy to use and implement. 

Square is mostly used by such businesses as food trucks, pop-up stores, and traveling salespeople. Thus, Square might be a good choice for mobile-based businesses that do not want to invest in an e-commerce website.

E-commerce Platform Or Store Builder (ECS or EBSP)

E-commerce platforms or store builders are another type of hosted payment solution. These platforms allow e-commerce website owners to create online stores with built-in payment functionality. 

E-commerce platforms such as Shopify and Wix have added payment processing functionality that allows business owners to sell online without building their payment system. e-commerce platforms are easy to use and can suit beginning e-commerce merchants who want to start selling online quickly without much effort setting up a payment system. 

E-commerce platforms are also good solutions for businesses looking to accept cryptocurrency payments. They often allow accepting payments via decentralized payment systems such as Bitcoin and Ethereum.

In-house Built Website Or E-commerce Platform

Some e-commerce businesses choose to build their payment system from scratch. Building your payment system allows you to control the payment process and the look and feel of your website. However, it’s a complicated and time-consuming process that is best suited for larger e-commerce businesses with many employees. At this point, it’s not usually recommended for new e-commerce businesses that want to focus on growing their business. Unless you are an experienced engineer and understand how payment processing works, outsourcing the building of a custom payment system to a third-party provider might be a better option.


When choosing a payment system for your e-commerce business, you might want to be sure that the system is the right fit for your customers and your business. It’s important to consider all aspects of each payment system and decide which meets your requirement. E-commerce businesses come in all shapes and sizes, so there is no one-size-fits-all payment system — thorough research might help choose the best variant for your business.

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