Best Payment Processors for Selling Digital Goods Online

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Published on
October 30, 2024
Updated on
December 11, 2024
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Samcart editorial team
Samara Lemon
VP of Marketing
Brian Moran
Founder
Leilani Thomas
Sr. Marketing Manager
Scott Moran
Co-Founder

If you're selling digital products online, you need more than a pretty way to deliver your content. You need an easy way to boost conversions, maximize customer value, and run your business without worrying about technology.

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As an entrepreneur selling digital products, selecting the right payment processor is crucial for your online business success. Whether you're offering online courses, digital downloads, or SaaS memberships/subscriptions, or physical goods, your chosen payment processor directly impacts your customer experience, transaction security, and overall revenue.

The right choice enhances your checkout experience, ensures seamless integration with your e-commerce platform, and provides the necessary features to boost conversions. This guide will help you navigate the complexities of digital goods payment processors, offering insights into the best options available and how they can transform your checkout process into a conversion powerhouse.

What Is a Payment Processor?

A payment processor is a key component of any e-commerce business, acting as the intermediary between customers, merchants, and financial institutions. When a customer makes a purchase, the payment processor handles the transaction's authorization, data processing, and settlement. This ensures that funds are securely transferred from the customer's bank account or credit card to the merchant's account.

It's important to note that while payment processors handle transactions, they're distinct from payment gateways. Payment gateways are the technology that captures and transfers payment data from the customer to the payment processor, acting like a virtual point-of-sale terminal.

How Do Payment Processors Work?

Understanding how payment processors work is key to appreciating their role in your business operations. Here's a step-by-step breakdown:

  • Transaction Initiation: The process begins when a customer initiates a payment during the checkout process, typically by entering their payment details on an e-commerce platform like SamCart.
  • Authorization: The payment processor communicates with the customer's bank or credit card issuer to verify that the funds are available and that the transaction is legitimate.
  • Data processing: Once authorized, the payment details are securely transmitted through the payment gateway, which encrypts the data to protect it from fraud and unauthorized access.
  • Settlement: The payment processor coordinates with the acquiring bank to transfer the funds from the customer's account to the merchant's account, completing the transaction.
  • Customer communication: Finally, the customer receives a transaction confirmation, and the merchant updates the order status, ensuring that both parties are informed and the transaction is recorded accurately.

Key Points to Consider When Choosing the Best Payment Processor for Your Business

Selecting the right payment processor is more than just accepting payments; it's about choosing a solution that aligns with your business model, enhances your checkout experience, and integrates seamlessly with your existing systems. Here are the key factors to consider:

Compatibility With Your Business Model

Your payment processor should support the specific needs of your business. For instance, if you're selling digital products like online courses, digital downloads, or memberships, you'll need a processor that can handle recurring payments, subscriptions, and one-time purchases.

It's essential that the processor also supports the specific payment flows your business requires, whether it's a simple checkout or a more complex setup involving upsells, order bumps, and coupons.

Multiple Payment Options

Offering a variety of payment methods is crucial for maximizing conversions. Look for a payment processor that supports credit cards, debit cards, ACH transfers, digital wallets like Apple Pay, Google Pay. Some processors have even started supporting paying with cryptocurrencies like Bitcoin.

This flexibility ensures that customers can use their preferred payment method, reducing cart abandonment rates, providing customers flexibility, and enhancing the user experience.

Integration Capabilities

Your payment processor should easily integrate with your existing e-commerce platforms, shopping carts, and accounting systems like QuickBooks. This ensures a seamless transaction experience for both you and your customers.

Look for processors that offer plugins or APIs that make integration simple, even if you're using complex systems or custom-built platforms. For businesses using platforms like WooCommerce or Shopify, it's essential that the payment processor integrates smoothly to support a consistent and reliable checkout process. Several eCommerce platforms, such as SamCart, natively integrate with multiple payment processors. Make sure your eCommerce platform works smoothly with different payment processors to give you, the merchant, flexibility.

Scalability

As your business grows, your payment processor should be able to scale with you. Choose a solution that can handle increased transaction volumes and offers features that support expansion, such as multi-currency support and global payment processing.

This is particularly important if you plan to expand into international markets or expect significant growth in customer demand. The best payment gateway will also provide tools for managing high transaction volumes without compromising speed or security, ensuring that your checkout process remains efficient even during peak times.

Currency and Geographical Support

For businesses targeting international markets, choosing a payment processor that supports multiple currencies and operates in various locations is essential. This capability can significantly enhance your global reach and customer base, making it easier for international customers to complete transactions in their preferred currency.

Security

Security is paramount when handling online payments. Look for a payment processor with robust fraud detection, PCI compliance, and chargeback protection to safeguard your transactions and customer data.

In addition to these basic security features, consider processors that offer advanced fraud protection tools, such as real-time transaction monitoring and multi-factor authentication, which can help prevent unauthorized access and reduce the risk of fraud. A secure payment solution will protect your customers' sensitive information, build trust, and encourage repeat business.

Fees and Pricing Structure

Understanding the fees associated with each payment processor is crucial for managing your costs. Pay attention to transaction fees, monthly fees, chargeback fees, and any other hidden costs that might affect your bottom line.

Some processors offer tiered pricing models or volume discounts, which can be beneficial if your business processes many transactions. Be sure to compare processing fees across different providers, considering the total cost of ownership, including any additional fees for specific features or services.

Conversion-Boosting Features

Maximizing conversions is key to your online success. Consider payment processors that offer multiple payment options and support conversion-boosting features offered by your eCommerce checkout platform, such as upsells, order bumps, coupons, and upgrades. These tools can significantly increase your conversion rate, average order value, and overall revenue.

Customer Support

In the event of an issue, reliable customer support is invaluable. Choose a payment processor known for excellent customer service, with 24/7 support available via multiple channels, including phone, email, and live chat.

This is particularly important if you operate an online store that serves customers around the clock, as timely support can help resolve issues quickly and prevent disruptions to your business.

The 7 Best Payment Processors for Selling Digital Products

When it comes to selling digital products, SamCart and these payment processors stand out for their functionality, security, and ease of use.

SamPay

SamPay is a powerful payment processor designed specifically for online sellers and creators. SamCart’s native payment processor, backed by the power and security of Stripe,, it offers a streamlined checkout experience that reduces friction and boosts conversions.

SamPay supports multiple payment options, including credit cards, debit cards, and popular digital wallets like Apple Pay and Google Pay, and Buy Now Pay Later, partnering with Affirm, Klarna, and AfterPay. With features like recurring billing, fraud detection, and chargeback protection, SamPay is a top choice for online entrepreneurs looking for a reliable and user-friendly payment solution.

Its ability to handle complex transactions and support for conversion-boosting features like upsells and order bumps make it an ideal choice for businesses aiming to maximize their revenue.

Stripe

Stripe is another leading payment processor known for its developer-friendly API and extensive customization options. It supports a wide range of payment methods, including credit cards, debit cards, ACH transfers, and even cryptocurrencies.

Stripe's powerful integration capabilities and focus on security make it ideal for businesses looking to offer a seamless and secure checkout experience. With features like subscription management, invoicing, and support for multiple currencies, Stripe is well-suited for online businesses of all sizes.

PayPal

PayPal is a widely recognized payment processor that offers robust solutions for selling digital and physical products. It supports a variety of payment methods, including credit cards, bank transfers, and PayPal balances.

PayPal's integration capabilities with e-commerce platforms like Shopify,  WooCommerce, and SamCart, and its global reach and currency support, make it an excellent choice for online businesses. Its strong security features, including buyer and seller protection, add an extra layer of trust to transactions.

Square

Square is a versatile payment processor catering to online and offline businesses. For digital goods, Square offers features like recurring payments, invoicing, and robust e-commerce platform integration.

Its transparent pricing structure and user-friendly interface make it a popular choice among small businesses and startups. Square's ability to integrate with various online store platforms and its support for mobile payments make it a flexible solution for businesses looking to offer a modern and convenient checkout experience.

Paddle

Paddle specializes in payment processing for SaaS and digital goods businesses. It simplifies global payments by handling tax compliance, fraud protection, and customer support.

Paddle's comprehensive suite of features includes subscription management, recurring billing, and support for multiple currencies, making it a top choice for SaaS companies looking to streamline their payment processes.

SamPay is an ideal choice for businesses looking to optimize their checkout process and boost conversions. However, PayPal, Stripe, Square, Authorize.Net, Paddle, and 2Checkout are also excellent options, each offering unique features tailored to different business needs. We recommend you ensure any payment processor you choose integrates seamlessly with your tech stack, especially your checkout platform.

By selecting the right payment processor, you can ensure a smooth, secure, and user-friendly checkout experience that will keep your customers returning.

Braintree

Braintree, a PayPal company, provides a robust payment processing solution that combines flexibility with powerful features. It supports various payment methods, including credit cards, debit cards, digital wallets (Apple Pay, Google Pay), and PayPal integration.

Braintree stands out for its developer-friendly APIs, robust fraud protection tools, and support for recurring billing and subscription management. Its ability to process transactions in over 130 currencies and presence in more than 45 countries makes it an excellent choice for businesses with international ambitions. 

The platform also offers data encryption, tokenization, and PCI compliance support, ensuring secure transactions for merchants and customers alike.

Adyen

Adyen is a sophisticated payment processor that caters primarily to enterprise-level businesses and high-volume merchants. It offers a unified platform for accepting payments across online, mobile, and in-store channels, supporting over 250 payment methods and 150+ currencies.

What sets Adyen apart is its advanced risk management system, RevenueProtect, which uses machine learning to prevent fraud while optimizing conversion rates. The platform also provides detailed analytics and insights, helping businesses make data-driven decisions about their payment strategies. 

With its global reach and support for local payment methods in various regions, Adyen is particularly valuable for businesses expanding into new international markets.

Conclusion

Choosing the best payment processor is a critical decision for any online business selling digital goods. By considering the factors outlined in this guide and evaluating the top payment processors on the market, you can make an informed choice that supports your business growth and enhances your customer experience.

SamCart offers a powerful solution for digital entrepreneurs, ensuring a frictionless checkout process that maximizes conversions and revenue, and integrates with your payment processor of choice.. With SamCart's Checkout Anywhere, including Express and Embedded checkout options, you can create a seamless buying experience for your customers, no matter where they are in their journey.

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Samcart Editorial Team
Brian Moran
Founder
Scott Moran
Co-Founder
Samara Lemon
VP of Marketing
Leilani Thomas
Sr. Marketing Manager

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