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How To Accept Payment Online The Most Cost-Effective Way

The P2P Payment Processors

It has taken quite a while for the ordinary man-on-the-street, the mom-and-pop, students, part-timers, and all netrepreneurs wannabes in the Third-World Internet countries to finally have a means to sell their products/services over the Net.

Before that, whatever e-commerce solutions available out there were not for us. We couldn't afford to spend hundreds of thousand on just this solution to test the market. We need a CHEAP solution, one where we can utilized initially at low-risk to build our brand and customer base before latching on the real thing.

After all, Business 101 taught us not to jump straight in before completing lots of testing, fine-tuning and re-testing. With the dot-com bust of the early 2000, we require an even cheaper solution, FREE if possible, as the risk turned out to be higher than what it was prophesized.

Then came along an ingenious solution called PayPal, the first online peers-to-peers (P2P) payment processing system where one can send and accept money via email. And it was (and still is) free to sign up for an account. What it meant was that anyone with limited or no budget can now start to sell over the Net. There is no need for a merchant account, e-commerce processing system, real time credit card processor, etc., to enter the world of e-commerce.

You can fund your account via several options such as credit card, money order, check, etc., and similarly, you can withdraw funds from your account by instructing PayPal to pay you by check, debit card, bank transfer, etc.

The only problem was..., PayPal only accepted members from the US, Canada, and a few countries in Europe. In other words, only citizens from First-World Internet countries can utilize their innovative service. Duh...

How most of us were most envied about those in the US and Europe for their ease to make a 'fortune' out of the Internet with little or no investment. We only wanted a small slice and we would have been more than happy. But then, that's how the world goes..., the rich seems to get richer - and more wonderful tools to play with too.

Then, PayPal's copycat, StormPay came along in October 2002 and at last, there appeared to be a light at the end of the long dark e-commerce tunnel. Unlike PayPal, StormPay allows anyone in the world with an email address to send or receive payments, and provide vendors a safe and secure method to do financial transactions across the Internet.

Indirectly, StormPay literally take the world by storm as the most versatile P2P payment system on the Net (in fact, this happened almost overnight early 2003 after PayPal excluded its service to several types of business, most notably, MLM-related, or in some cases, business models they deem as illegal), as they extended their service to almost all countries in the world as well as for MLM and related businesses.

Although PayPal is certainly more 'legal' and credible in a sense, its continuous limitation to a handful of countries (only 45 countries at present) as well as being an eBay company (NASDAQ-bounded) have severely restricted their service. For example, PayPal extended their service to residents in Malaysia early 2004, but the limitation is that Malaysians can only withdraw their funds into a US bank account. That is a big limitation given the substantial inconvenience as well as fees just to set up a physical bank account in the US. 

StormPay is thus, a good alternative. There are also many P2P payment processors around that accepts international members such as MoneyBookers and PayingEZ (note that I'd left out e-Gold, a more credible variant but more to e-Gold in the Foot Note below), but their popularity is still way behind StormPay at present. And one of the golden rules of e-business is that one must utilize a popular and/or well-accepted payment processor in order to make more sales.

The only downside perhaps, is that the fees these P2P payment processors usually charged are a bit more expensive than other credit card processors on a per transaction basis. However, the good thing for vendors is that it favors them more than the paying customer in terms of fee charges at this stage.

Nevertheless, for the small time merchants in ‘non-PayPal’ countries, the new breed of P2P payment processing companies are like a God-sent service as was the case for SOHO (small office home office) businesses in the US when PayPal was first introduced. Today, companies like StormPay provide anyone in Borneo to the jungle of Amazon, a free-to-attain and low risk solution to sell their product/service on the Internet.

Certainly, P2P payment processors are not the BEST solution for any e-business venture. But, for the very small to small businesses, it is the NEXT BEST thing. It allows them to test the water of e-commerce. And compared to a proper e-commerce set-up, they are outrageously cost-effective.

However, once the water had been tested and you are making some sales, DO NOT rely on P2P payment processors such as StormPay to be your main and/or only payment processor in the longer run. The next step should be to utilize a third-party payment processing service such as Payaah (if you are selling digital goods) for cost effectiveness. A review of Payaah can be found here.

FOOT NOTE: Founded in 1996, E-GOLD is another type of P2P payment processor that accepts international members. But unlike the others mentioned above, we feel that it should be categorized differently as it bases transactions on the current Gold trading rate, and administered both payment transaction and currency exchange. To fund/withdraw cash from your account, you will need to buy/sell your e-Gold from "Market Makers" or Independent Exchange Providers. In a sense, its service is much more than processing payment and hence, its mode of operation can be more complicated than the others. However, E-GOLD is certainly a reliable and trustworthy payment alternative for small businesses from Third-World Internet countries at this stage. If you can comprehend its modus operandi, just click here to open an account for FREE today.

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