Forum Moderators: buckworks
Question: Does anyone the cost of using PayPal vs. Visa, AmEx, etc.?
If you consider that American Express and Discover charge higher fees, a flat 2.2% + $0.30 (merchant rate) is very competitive. If I could accept Paypal exclusively I would - it makes more financial sense.
The problem with PayPal is that I could sign my dog up for a PayPal account and start receiving cash. No validation what so ever. It's one thing to make it easy to send money to people, but there should be some kind of validation process for sellers, like how NETeller does it, because at least you know that whoever you send money to had to go through a verification process.
NETeller is the best because you have to give them a social, tax ID, that kind of stuff - they pull your credit and actually ask you questions like "What kind of car did you have 3 years ago" and you have to pick the car that matches the one on your credit report from the list. Then, after all of that, they do a final callback to the number provided and you have to answer the questions again over the phone. It's a great validation process and that is why NETeller has a 100% charge-bback protection for their sellers. If PayPal had that, they would dominate the online market - I would be the first person to ELIMINATE my merchant account and go exclusively through PayPal. Even though I get a much better rate through my Wells Fargo account, if PayPal could guarantee zero charge-backs I would send all of my business through them. I would be doing this through NETeller if they had even half of the numbers that PayPal has.
I would much rather pay someone through a unified service like PayPal/NETeller than fork over my credit card number to every Joe Schmoe with a website because 9 times out of 10 Joe doesn't know jack squat about security and not to store customer card numbers unencrypted in a web accessible Access database :)
But until PayPal makes it so that my dog can't receive credit card payments, I don't think they're going to do much better than a third.
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After giving this some thought, I know of a way PayPal could do this without changing their existing model. They could keep everything the way it is, but add in a verification program where they do the type of validation procedure that NETeller does. This way you could still PayPal money back and forth to your dog if you want, but a seller could optionally apply for the Tripple Platinum Gold Crown Mac Pimp Daddy PayPal Verified Sellers program. If accepted, they could get some charge-back protection ... maybe not 100% like NETeller because with NETeller the buyers have to go through the same verification process as the sellers, but at least a chance to prove that they delivered what they advertised ... and the buyers could see that the seller they are dealing with has been verified.
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For me I rather go thru PayPal because it's easier then getting my credit card out every time and I trust PayPal more then some Mom and Pop shop. It's cheaper for me to use PayPal then my bank and most other companies that accept credit cards.
PayPal makes sense for most web site owners because it's cheap and you are protected. You don't have to keep so much money in your bank account or something like that.
I think that PayPal needs to fix a few problems to make it safer for both customers and site owners, but bottom line is it's here to stay and I suggest you get your share before it's to late!
Tripple Platinum Gold Crown Mac Pimp Daddy PayPal Verified Sellers program.
There is one way, and one way only to eliminate chargebacks: don't take *any* payments.
15% increase in sales by offering PAYPAL in addition
to credit cards.
Has anybody else seen this?
I don't offer paypal, as I have a merchant account with a good discount rate, and I always figured that if the customer has paypal, then they must have a credit card, so they will just use the credit card directly, if paypal was not offered.
I have tried pay-by-check and other services, without much luck, and just accept credit cards only now.
Is paypal really worth adding as a payment method?
My particular widgets are of interest only to women and would typically be considered discretionary purchases rather than necessities. I know that many of our customers consider the money in their PayPal accounts to be "fun money" to be spent on whatever they like, without worrying about their household budgets.
My wife, for example, used to sell old items she didn't want anymore on Ebay and leave the money in her PayPal account. Whenever she saw something online she wanted, she'd use her PayPal account to pay for it. My impression is that there are quite a few people who do this.
Will it increase sales dramatically? I would tend to doubt it for most products. On the flip side, PayPal is free, easy to set up, and horror stories notwithstanding, generally a good option for above board retailers.
