Personally, I do not have a problem with PayPal although there are stories about people and merchants who have a lot of issues.

It is best to think of PayPal as is a payment processing alternative.. a method to use:

1. If you do not have a merchant account or do not want to pay the monthly fees for a merchant account. Start-up ecommerce sites / businesses who are looking to keep cost to a minimum might use PayPal as an initial way to accept payments online.
2. As an additional payment method... in addition to your merchant account. Recognizing that PayPal does have a market share and people without credit cards can use PayPal for purchases.

Source of interesting stats: http://www.clickz.com/showPage.html?page=157001

Retailing stats: http://www.clickz.com/showPage.html?page=stats

~Roland

I always recommend to my ecommerce  clients - offer FREE shipping.

OR free shipping on purchases greater then a certain dollar amount.

It works! Build shipping charges into your pricing. There may be situations that require additional shipping charges - spell those out.

Google checkout is a good alternative. If you have an established ecommerce site with consistant sales, you should get a merchant account.

When selecting a merchant account be sure it is compatable with your ecommerce program.

~Roland

And the question was, as a consumer.... I like using paypal.  I don`t have to get out a credit card.

Hello Everyone,

From the merchant account provider side of the fence I`d like to offer my observations regarding 3rd party accounts like paypal vs. direct merchant accounts.  In my experience, paypal and other payment alternatives, seem to work well for start up ecommerce and low volume sites.  However, there are many issues like many have you have already brought up and I will not rediscuss what`s already been said.  Instead, I`ll give my perspective from my experience.

Typically speaking, it`s like Nikole and others have already stated.  Business don`t jump out of the gates and get a merchant account because of the fees.  Especially in the beginning when funding is tight.  However, the pricing that you get on a merchant account is tied directly with the company/representative that you deal with.  See below the type of pricing I give to my clients:

The #1 online payment gateway for merchant accounts is Authorize.net.  Authorize.net is the payment gateway and attached to that is the merchant account.

Authorize.net Online Payment Gateway with Virtual Terminal:

Application/Set Up Fees:  Waived

Visa/MC Base Rate:  2.19% (This rate includes keyed consumer card with an AVS match)

Visa/MC Non Qualified Rate:  3.19% + $0.10/transaction (This rate includes keyed consumer cards without an AVS match as well as business/corporate and international cards)

Transaction Fee:  $0.25/transaction (Includes internet transaction fee)
Interchange Pass Through Credit/Debit:  $0.00
WATS/Auth Fee:  $0.00
AVS Fee:  $0.00
Batch Fee:  $0.00
Monthly Basic Service Fee:  $8/month
Monthly Online Gateway Fee:  $5/month
Contract Term:  Cancel at any time without penalty

When looking at the pricing above, you`ll notice that I disclose all fees associated with the account unlike most companies.  Most companies do not disclose all fees associated with the transaction such as the AVS fee, Internet transaction fee, etc.  The main concern is usually the monthly fee associated with a merchant account.  In my pricing program above, if you did $0 in credit cards in any given month you`d only pay $13 for the service.  Most companies have a $5-$10 statement fee and a gateway fee of $5-$20/month and a monthly minimum of $15-$25/month.

I hope that this information helps some of you.  If you ever have any questions, please don`t hesitate to contact me.

Good topic Nikole!

Reading the posts I am thinking, this might be a Men are from Mars situation. I don`t think they really care about a shopping experience--Or maybe they think they don`t.

I know that when I tried to use paypal and it was not allowing me to use my credit card I aborted the attempt. Because I was determined to purchase the service, I called and gave a credit card on the the phone. If I was purchasing a thing-a-ma-jig, I would have gone to another site.

I used Pay-Pal for EBay. I got burnt a couple times on EBay & I have moved and would need to switch banks-yada, yada. PayPal is now attached to a closed bank account. Due to my last frusterating experience, I won`t spend my time trying to check out on their system.

This is why I am sticking with PayPal`s Website Payments Standard and 2Checkout for now.  PayPal`s Website Payments Standard costs 1.9% - 2.9% + $0.30 USD.  There are no other service or network fee.  PayPal has all transaction history online.  The balance can sit there collecting interest as well.

If and when the volume becomes huge, then PayPal`s Payflow Gateway (formerly Verisign) is seems like a very good choice.  Here is the PayPal`s payment service comparison.

https://www.paypal.com/cgi-bin/webscr?cmd=_profile-compariso n

My only complaint about PayPal is that the screen that the customer gets redirected to is not very clear regarding the credit card payment option.

Here`s a resource people may want to review regarding paypal as well www.paypalwarning.com  The website is no way related to my company, in fact it is a competitor of mine who sponsors the site.  However, it is a site that lists major concerns/issues with paypal that would impact a larger business and even a start up who relies on the funds that their sales generate.

I agree with you 100% on the early termination fee.  My belief on early termination fees are the same as yours.  In a business to business service related setting, it should be more about building a partnership rather than "selling" a service.  People should keep a service because of the quality and service that they are receiving rather than being forced to stay because of a contract term.

Also, in the start up world, we all know that businesses typically fail in their 1st year.  Not something that is a positive, but it is a reality.  I think it`s ridiculous that someone would have to pay a large termination fee because their business didn`t make it.  It`s already bad enough that the business folded, then on top of that be charged some arbitrary termination fee.

Hi,

I also use paypal and have not had a problem with it...being that most of my customers have a paypal account and seem to prefer this method of payment.

Credit card processing bills are a jumble. Here`s how to read yours.

No one likes a bill, especially one filled with cryptic codes and indecipherable jargon. That`s a pretty good description of a statement from a credit card processor. Such firms authorize credit and move funds through the banking system so that you get paid. For these services, you pay the processor a fee, known as the discount rate. Many processors tout low discount rates to lure new customers. Problem is, your bill can be so complicated that it`s nearly impossible to figure out if you`re paying that low rate--or a lot more, thanks to a host of surcharges and fees. We recently studied a dozen statements and created the fictional document below. While bills differ from processor to processor, here are some common fees you might see on yours.

.....

I think Paypal is an additional option that should be offered.  Jim, as you said, you are setting up a paypal acct. for your customers.  If you want to make purchases  from other websites, it makes it a very easy option for you to use the funds that have been deposited in your paypal acct.  Sorry, I haven`t checked into paypal pro.  Another reason to offer a paypal option on your site,.......some people do not want to enter their credit card numbers in websites they order from. 

To offer paypal as the only option, is probably not the best idea.  If customers don`t have a paypal acct, they might not want to bother signing up for one either.

Jim, if you have the software that will integate with quickbooks, that seems like a great option.  

I don`t know why so many people don`t like paypal.  We`ve never had a problem and I don`t think any of our customers that use it, have either.

I do not use just one... so I`d vote for two or three.

Social bookmarking . . . viral marketing IS the new word of mouth advertizing.

~Roland