|But I do not have the volume of sales to justify the costs of a merchant account |
You said it. It's all about the perception.
>>>But I do not have the volume of sales to justify the costs of a merchant account, and so I use Paypal for all my sales.
this is what its all about, ... some people think that not having a proper merchant account is a bit amateurish - which may put some buyers off. (i'm not so sure)
the functionality of paypal is very good and the fees very competitive.
addad>> bbc1234 you beat me to it!
I tried to sign up with PayPal as a normal customer but didn't succeed. They got the setup charge all right, but I never retrieved my password, which is supposed to show up on your next bank statement next to the set up fee transaction. But this doesn't work on (some?) European accounts, there is no additional text on the statement, it just states the currency, the date and the amount.
Customer service kept insisting that it would show up though, and they wouldn't even let me close the account because I didn't have my password...
So you have to take that into account. It's probably an excellent service if you only have American customers.
I think it's a great alternative on a store for payment - we got a lot of complaints when we took the option down for a couple of days. Used in conjunction with CC processing, I'm surprised more people don't do the same ... and not just for US customers.
The reason high volume professional sites get rid of Pay Pal or do not use it is that the rates are to high. If you have a high volume you can get a killer rate with a normal merchant account. Pay Pal is just not a good option for high volume. Most people don't just keep money in there Pay Pal account. If you are on Ebay you need Pay Pal but not outside of Ebay.
Its not just about the image of professionalism. Paypal claims to not be a bank; hence not subject to regulations that banks holding accounts are subject to. The result is that customers and merchants are not protected by the level of recourse they might otherwise enjoy.
To understand this, just search for Paypal. After the first 3 or 4 paypal listings, there are all the anti-paypal where you can see some of the issues which have resulted in the numerous class actions against paypal.
Of course, this all needs to be balanced by the positive experiences of the majority of their customers. It seems if you are a merchant, the risk can be reduced by using them for high volume low value transactions, and keep your balance low. As always, buyer beware.
Wow, I just did a search for PayPal and checked some of the anti PayPal sites! There are some very unhappy people out there, merchants as well as shoppers. Now I'm actually quite happy that I never managed to use my account.
I started some clients and myselft on PayPal because it was quick and cheap.
I stayed with them over our merchant account because of the fraud protection (I or any clients never lost a single dollar with PayPal after a mil+ in transactions).
Even with the higher transaction fees, I feel we are money and certainly headache ahead by using PP over a merchant/cc combo.
I doubt many people accurately figure what a merchant account really costs them. Between thet added labor and risk, I just can't pencil it out where a merchant account could be cheaper than PP.
Let's not forget the added step. The last I knew, the purchaser needed an account with paypal before they could pay which is just another step in the string of steps to complete the transaction.
With pay pal you have to be real careful. Always send to confirmed address. Never send out of the country. If somebody is willing to pay outragous shipping next day cost that is a red flag. Just watch for the red flags. I got caught in one of those Indonesian things a while back. If you want to know abot scams read this:
I second Ivana's experience. It took us over a year to open a business account with PayPal because of a problem with obtaining the correct 4-letter code. If you sell outside the U.S. paypal is definitely a no-go.
If you run a international PayPal account, the real fees are over 5% if you include the 1% surcharge, and the very unfavorable exchange rate they use.
You do not need a full-blown merchant account. You can use a third party billing provider that does not have the high fees of a merchant account but does not have the inconvenience of a PayPal account.
Paypal's inception was to provide a service for micro-transactions. Merchant account fee structures seem like a big headache to me. On top of transaction fees, you have daily batch submission fee, AVS verification fee, bank deposit fee, blah blah blah. I've never been a fan of fixed monthly fees, or worse hidden fees. So, that's why I prefer Paypal.
|If you run a international PayPal account, the real fees are over 5% if you include the 1% surcharge |
They do have a different setup for Canadian users, wo we don't pay the extra surcharge. They may have something similar for some other countries with a large PayPal user base.
Another problem is that it used to be a lot harder to use PayPal.
When they first started, you had to sign up for an account to make a payment. I haven't used it lately, but now I guess you can pay without opening an account
(is that right?)
For the last couple years, I have avoided buying from any site that had PayPal, because I thought I had to go through a lengthy sign-up process, and I didn't want the hassle.
I bet there are a lot of people out there just like me who mistakenly think it's a hassle.
|still holding their 5% reserve after several months |
That is standard practice. These services need to hold on to the reserve in case of any chargebacks. I would be upset too though if they suddenly closed my account without any warning.
This thread is about using PayPal and using it more effectively.
Whole mess of off topic/hijack topics were nuked. Please see more info about it here: