After what—at least for me—has been a long wait, I think Xero has finally and truly automated the payment process for Stripe and PayPal. I say think because after investigating the integrations I’ve come to realize that while PayPal is truly automated, Stripe still requires a bit of manual work (though it may also be truly automated in coming months).
Greg Lam will be presenting the sessions, Cloud Accounting Face Off and Setting Up a Paperless Accounting Flow, at Accountex 2016.
What do I mean by “truly automated”? In the past, the big feature that cloud accounting software liked to tout was that they could facilitate online payments from your customers, using payment processors like PayPal and Stripe—or in QuickBooks Online‘s case, it’s own internal payment service (Intuit Payments). The big advantage of QuickBooks Online was that because it controlled its payment service, you really could send an invoice to a client—and then the client and software did the rest, from payment to reconciliation.
That said, the issue with QuickBooks Online is that you’re forced to use its Intuit Payments product if you want that end-to-end automation. If you want to collect payments via another payment processor, you have to do that manually. That’s very inconvenient.
On the other hand, the issue with Xero was that while it offers up many different payment processors to choose from—and even has an option to add your own custom payment providers—it couldn’t automate the process from end to end. This is because it didn’t control everything and it may not have had the available APIs from the payment processors themselves.
Now, besides improving the accounting side of the integration with PayPal, Xero has also improved the checkout experience. Instead of being forwarded to a PayPal site to make a payment, customers can now use the PayPal Express Checkout, so they don’t leave the invoice’s interface. Studies show that this results in less abandoned carts.
Setting Up and Testing Stripe & PayPal Payments in Xero
The first thing you should know is that if you’ve already set up Stripe and PayPal as payments in Xero, you’ll have to go back to your setting and enable the automation.
Settings > General Settings > Payment Services
From there you can either edit your payment service or add a new one. In either case, you’ll end up being able to choose whether or not you’d like to automate your fees.
What this does is enter the fees from your payment provider into Xero. You also need to choose a Fees Account or add a new one.
If you add a new one, Xero will pre-fill out account information for you. But you’re free to modify the account name and number if you like.
Once you have your payment provider accounts set up, don’t forget that you can have multiple branding (invoice) themes, and that those themes allow for both a PayPal and credit card account to be offered as payment methods.
As you can see in the above screenshot, I have one theme that only allows for PayPal, one that only allows for Stripe, and one that allows for both.
When you go to invoice a customer, you can then choose what theme to use.
Once you send your invoice to the customer and they check the online version of it, they’ll be able to pay via the payment method(s) you made available.