If you consider that a typical merchant account costs:
- setup fee (sometimes free, can be $100-$200 avg).
- minimum monthly gateway fee (usually about $25/min unless you have a deal where discount fees offset and cancel the gateway fee)
- discount fee (avg. 2.9%) -- it's not a discount for you -- it's what they "discount" from your earnings for handing the payment.
- transaction fees (usually $0.25 - $0.40 "each way" meaning you pay $0.25 to accept payment, and another $0.25 if you need to do a refund or credit -- any "transaction" you will be charged a fee.
- statement fee (about $15.00 if you want hard copy / paper statements mailed to you -- and some company charge even for the electronic versions).
With that said, lets look at a $1.00 sale.
Of that $1.00 you would pay; $0.25 transaction fee, $0.029 discount fee, and lets say you amortized your statement and monthly fees over 100 sales so add another $0.40
I'm typing off the top of my head -- but I think that's about $0.68 ("sixty eight cents") of the $1.00 income paid in money handling fees. (We didn't add in the need for an SSL certificate, business hosting, or other costs associated with online selling).
Now lets look at a single $100.00 sale:
Discount Fee: $2.90
Transaction Fee: $0.25
Portion of Monthly Fees: $0.40 (approx)
Total cost: $3.55 (or 3.55% of sale)
Obviously for small dollar items you'll get slammed with fees -- but if you can sell $1000/mo in $20 to $100 per-sale amounts, it will work out o.k. (Otherwise, look into "micro payment" formats) Now compare to PayPal:
Standard fee to receive money: 2.9% + $0.30 per transaction. (They offer a "Best Rate" of 1.9% but you need to do $3000.00 in payments plus other criteria to qualify)
There are No monthly fees, No setup fees, No gateway fees...
$100 sale = $3.20 (2.9% + $0.30)
On a $100 sale you'll pay $0.25 less in fees and not have to setup or maintain any kind of merchant account... and you can take a credit card from anyone. Here's some old-school Paypal code
, (all plain HTML, no buttons, no API, no nothin'... just links).
Let's start with an "Add to Cart" link for a: BLUE WIDGET (Price:$9.99 + $2.00 Shiiping, US Funds)
<a href="https://email@example.com&item_name=BLUE%20WIDGET&amount=$9.99&shipping=$2.00&shipping2=&no_note=1¤cy_code=USD" target="paypal">Add to Cart</a>
a View (PayPal) Cart Link:
<a href="https://firstname.lastname@example.org&display=1" target="paypal">View Cart</a>
<a href="https://www.paypal.com/cart/checkout=1&page_style=PayPal" target="paypal">Checkout</a>
For casual sellers, PayPal is fine. Quick, easy, and you can hand code the HTML into you site for a couple products really easily.
Most people who complain about "PayPal" associate it with eBay selling -- where you can end up paying 10-11% total with listing fees, PayPal fees etc...
The worst part is getting over the hump with PayPal so they let you accept lots of money and deposit it into your account right away, (they are known for holding payments, giving money back to customers you don't want to refund, and charging back amounts you thought long-since cleared).
You can also opt for "PayPal Pro" to do ecommerce and look professional. You can use their API and integrate it into your site and customers will NOT be taken to the PayPal site to "checkout" (on standard PayPal accounts the buyer will always see a PayPal page at Checkout).
Hope this helps.