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WEB/DIGITAL Merchant Account vs Paypal

MJ DeMarco

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I can't tell you how many times I've abandoned shopping carts when I see PayPal only and no credit cards. It screams amateur. I won't do business with any company that accepts PayPal only ... this is just me. Buying by credit card offers me protection ... especially AMEX. PayPal ... another BS company owned by Ebay, (StubHub you can add in there) ... They don't give a rats a$$ about customer service, just your money and shareholder value. Have a problem with the merchant? Good luck getting anything from these companies outside of some canned Auto Response and an empty promise to "look into it". No thanks and no thanks to the merchant that offers paypal only.

If your order process is deterring conversion, it needs to be retooled. It might make the difference between 2 orders per day vs 5. That adds up over 30 days.

Get the merchant account and run PayPal as another pay option.
 

yveskleinsky

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Paypal also charges much higher fees. ...I would say that your success with either depends on your product and the demand. We started off using paypal, since our competition wasn't even accepting credit cards via internet, and did great. We have since moved to linkpoint.com and they have been great so far.
 

Z5 FILMS

Contributor
Paypal is not a Federal banking institution. They don't have follow the rules. and they don't.

They can...

1. Freeze you account for whatever reason.

2. Give your money to others as they wish.

3. Or, they can accuse you of being a fraud and keep all your money if they wish.

They have a nice history of doing all the above. Not to mention customer non-service is a joke. On top of that, when you keep money in you're account, you're giving them an interest free loan I'm guessing.
 

aptohosting

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I would agree there is NO reason not to have a merchant account. It takes literally about a week to set up.

1) Go to bank set up merchant account with them.
2) Go to www.authorize.net and set up gateway with them.
3) Link them up, and integrate into your website.

ALSO you don't have Paypal's BS funding policy which can take up to a week to process. We use Wachovia/Auth.net combo and we are literally funded within 24 hours.

If you have any more questions about it just PM me, I have dealt with 5-8 gateways and a few banks.

Thanks,
Tom C.
www.aptohosting.com
 

Toiletcake

New Contributor
I have used several different merchant accounts and also Paypal. I handle all my transactions over the phone so the customers don't know what I'm using. I always looked at the rates I was being charged as being the determining factor.

Paypal

If your sales are over 30k a month I believe its around 2.2% plus $.25 per transaction across the board. It doesn't matter what kind of card the customer uses, visa, master, amex etc.

Merchant account

Visa has a rate, visa rewards cards has a higher rate, debit, unqualified cards, and international all have crazy rates well into the 3-4% range.

I cut my merchant fees in half with Paypal. I will say that I do have a merchant account setup with Authorize.net as a backup though. There are times when Paypal will want to check security crap on your account and they can hold it up while waiting on documentation. So I have a backup plan

It all depends on what you are doing. I vote for having both up and ready for use. Merchant accounts can also process personal checks while Paypal cannot.

Maybe this will help you.
 

biophase

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I started with Paypal, Google Checkout and a merchant account. Having all 3 options I can tell you that I did not have one Google checkout order, I had 1 paypal order and the rest were credit cards. Once you get a merchant account there's no need for the other two. Anyone with GC or Paypal has a credit card.

Get the merchant account. Why skimp there? If you're confident that you're gonna make money there's no reason to not spend the money there.
 

LightHouse

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I can't tell you how many times I've abandoned shopping carts when I see PayPal only and no credit cards. It screams amateur. I won't do business with any company that accepts PayPal only ... this is just me. Buying by credit card offers me protection ... especially AMEX. PayPal ... another BS company owned by Ebay, (StubHub you can add in there) ... They don't give a rats a$$ about customer service, just your money and shareholder value. Have a problem with the merchant? Good luck getting anything from these companies outside of some canned Auto Response and an empty promise to "look into it". No thanks and no thanks to the merchant that offers paypal only.

If your order process is deterring conversion, it needs to be retooled. It might make the difference between 2 orders per day vs 5. That adds up over 30 days.

Get the merchant account and run PayPal as another pay option.
You echoed my exact thoughts when reading the OP. Not to mention, people want to feel as though your company is solid. Setting up a merchant account requires time and mony, that that a professional business doesnt mind doing. Setting up a paypal account is so easy that a 12 YO can do it. Thus it does not instill the same confidence in the consumer if they are being blinked at by pay pal rather than the usuall input your CC information here mumbo jumbo.
 

LightHouse

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ive heard alot of good with wellsfargo and authorize. also someone mentioned wachovia and authorize. Theres alot of other CC processors out there but alot of them are unknown so i cannot comment on those.
 

CarrieW

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ok so just trying to get this straight... if you already have a merchant account where you can swipe cc at say your store or office you can set that same merchant account up with authorize.net and have people order stuff off your website?
 

Toiletcake

New Contributor
Yes, go to authorize.net and get a recommended reseller to set you up with the Authorize.net account.

Then go to a bank to handle the bank part and get that opened. I used Bank of America and they ended it up costing me alot more then having a merchant account with Paypal.

I think there is some confusion with a standard consumer paypal account and a Paypal merchant account. With a Paypal merchant account you take credit cards and do everything the same as you would with authorize.net. Its might be cheaper for you
 

aptohosting

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ok so just trying to get this straight... if you already have a merchant account where you can swipe cc at say your store or office you can set that same merchant account up with authorize.net and have people order stuff off your website?
Carrie,

Yes, just call Authorize.net and have them set you up for their online gateway system.

Tom
 

PEERless

Bronze Contributor
What about for a company not currently making money? At what stage should the merchant account be created?
 

aptohosting

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What about for a company not currently making money? At what stage should the merchant account be created?
From day one!!! Here are the expenses of a merchant account.

1) Gateway fee- $10
2) Merchant application fee- $20
3) 2-2.5% per transaction fee

If you can't afford roughly $400 a year in fixed merchant account fees, you probably shouldn't be in business!:smxB:
 

biophase

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What about for a company not currently making money? At what stage should the merchant account be created?
How will you ever make money when you can't accept any money?
 

MJ DeMarco

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CarrieW

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thanks apto!

its not for me its for my brother. He has a business with a regular merchant account and I had never heard of authorize.net before. the cc company he uses couldnt give us any info about accepting cards online. I am very very slowly making him a website and had planned to use paypal for it but now we will go with the regular merchant account he has thru authorise.

untill this post I thought paypal(or another independant online processor) was the only way!!!
 

MJ DeMarco

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aptohosting

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Ok, I speedo'd you because you've paid ALL your bills timely. :eusa_clap:


Thank you, I appreciate it and thanks for everything you have done for me!
 
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