Forum Moderators: buckworks
Proponents say that:
1-People like to pay directly.
2-People are weary of Paypal.
3-Third party processor convert more than Paypal
4-Paypal looks unprofessional.
5-People have had phishing problems related with Paypal.
I counter all these by saying
1-I have never seen real stattistics from independent researchers not affiliated with any merchant processor confirming that people prefer to pay directly, rather than through Paypal. In fact, I have heard the opposite, that many customers prefer using Paypal as a buffer and not give credit card info to mom and pop merchants.
2-This is something I'd like to get real statisitics. Often it seems like this is a pr bug introduced years ago to justify using third party processor versus Paypal.
3-We used to have two processors, until Paysystems folded, and the results were even. From my end of things, customers often don't even know what Paypal is we have to educate them on this system.
4-Why does Paypal look unprofessional? Isn't the interface and service provided equal, if not superior in many cases to the sundry multitudes of third party processors?
5-I have seen phishing with several large banks too.
Please give me proofs or all the current arguments used against Paypal, and not just water cooler facts. I want to know where all this mantra about Paypal not being good for one's business came about.
I don't have any specific statistics to offer (in fact, it'd a bit of a sticky legality issue if I did), but I did work for an e-Commerce hosting company with over 30,000 active stores. PayPal sales versus 3rd-party sales differed across stores (of which there were many different kinds), however, for stores which utilized both a 3rd party processor and a PayPal payment option (this was before PayPal Payments Pro, so all PayPal transactions had to be completed on the PayPal site - which was where the "it's not professional" stigma developed amongst both customers and merchants) the trend was usually 2 or 3:1 in favor of 3rd-party processors.
Additionally, some merchants decided to remove the PayPal feature, as they noted that many customers were abandoning their carts when confronted with the PayPal payment page (presumably because they did not want to create a PayPal account to complete their transactions while PayPal still required this).
PayPal has made some significant improvements over the past year which do contradict many of the prevailing opinions of its inferiority - if PayPal is working for you, then by all means use it, and for anyone thinking of avoiding PayPal for the reasons you listed, it may be time to take another look at the options provided.
I became wary of customers using Paypal as they tended to be a grannies from Oklahoma using the web for the first time, or (my biggest bug bear) the fricking barrack room lawyer type who used paypal as he thought he was sophisticated - both types of customer can keep their money.
There was also a situation where paypal nearly lost me my biggest sale ever - the woman couldnt get to grips with paypal.
I understand now that Paypal doesnt require you to have an account with them so Im looking at having them in place for a new ecom site. We shall see.
PayPal allows me to confirm the sale by e-mail, apply postage, print packing and shipping labels, and track the shipment for pennies on the dollar. I couldn't buy all that functionality from a regular merchant account.
I recently dumped my bank merchant account due to ever increasing costs and poor service.
[edited by: lorax at 12:06 pm (utc) on Sep. 3, 2005]
[edit reason] Removed site promo and link [/edit]
1-People like to pay directly.
2-People are weary of Paypal
3-Third party processor convert more than Paypal
4-Paypal looks unprofessional
5-People have had phishing problems related with Paypal.
Ultimately, if you go into any shop or deal with any large or 'proper' business you would not expect to have to use PP.
In my case, as a vendor, it is more expensive than my merchant account, chargebacks and scams are far more likely and easy to do. Also PP have control of my account,
they can, and do, freeze peoples accounts for several months. If you have their cart throughout your site and this happens you are out of business.
I do not have a downer on PP, it is a godsend for many, and without it they would not be able to trade online. I do maintain however,
that if you are seriously in business then you have to have a merchant account
There is some kind of problem, and I never found out what. I phone and they say to email. I email and they say to phone.
Luckily its under $100 (just) not some huge amount, but can you imagine what I think of the merchant I was buying from when that happened? I've heard of merchants getting their accounts seized too - with tens of thousands inside. I was under the impression we are their own personal piggy banks.
If you do use them, have any bank account they have anything to do with be your only account at that particular bank. Sweep any money in it into an account at a different bank every day, and make sure you have no overdraft facility at the first bank. Don't do any transactions over $500 and try not to do business with the same customer more than a couple of times. Both those are fraud flags and are used as an excuse to freeze every penny (not just the amount in question).
Although I think that class action suit they settled for millions last year probably concentrated their minds a little, I never got compensated because UK citizens were excluded. If you are a Brit - its still open season on you.
Never ever risk more than a days earnings, get a serious credit card processor as soon as you can, and remember to say your prayers every night.
Says who? First I've heard of it.
> if given a chance
Use paypal 2 to 1 over a third party payment processor here. Now that pp has added it's virtual terminal and website payments pro, you can now offer yet more choices to customers.
With Website Payments Pro - users wont' even know their CC is being processed by paypal. Best of all to the merchant, the money is deposited in your account as the transaction happens.
> People like to pay directly.
Safety and security.
> People are weary of Paypal.
A couple million dollars per minute flow through PP - clearly some people
> Third party processor convert more than Paypal
Nonsense.
> Paypal looks unprofessional.
I'ver worked with about a dozen banks on the web, and used the services of about 1000 webbased service companies.
Paypal is the easiest too use, the most professional, the most trust worthy, and the most rocks solid of any company I have seen on the web.
> phishing
It is an issue with all the financial related institutions on the web, from walla walla national bank, to paypal. PP just gets it because they are the largest one on the web.
> benefits
If you are looking for reasons to use it from the management side:
- trust : Paypal.com has been fundamentaly unchanged since 99. You can count on it to be the same tomorrow as today.
- financial : I know of many people who use PP as a front end for their bank moving money around at will.
- ease of use : works with everything from your desktop to your phone.
- security : I'd trust PP over *any* financial institution on the web today. I feel far more secure using PP than I do our banking sites.
- return : those using the PP money market, are currently getting 3.5% on their pp account. That is pretty good on liquid cash flow working capital in the US today.
- debit : the pp debit card has one of the best features available on any card anywhere. That is an email with the details anytime that card is used anywhere - instantly.
- future : pp keeps pushing forward with new features like the Website payments pro, virtual terminal, and is flushing out their api. clearly they are not standing still.
So, pp is much more than a payment processor. Now that they have website payments pro where there is transparent payment processing, it is clear PP is on the move again.
The most important stage of any transaction is the payment, my customers can use their visa/mc, amex and countless debit cards without ever leaving my site. They can phone up and order, they get a card receipt with their goods which includes my registered business name on etc.
Using a third party means that when you come to the payment stage you are effectively saying I/my site cannot deal with this part of the transaction!
No serious commercial store or business would operate like this.
If your outside the USA, there is several resources you can locate to obtain your own merchant account.
PayPal has made some huge improvements (not requiring signup, etc.). PayPal Payments Pro also looks like a huge step forward, because it’s similar to offering both payment options, but you might loose some sales due to people trying to pay with their credit card when either their email address or credit card number is already associated with a PayPal account. I don’t know for sure if it would create a problem using Payments Pro, but before Payments Pro if someone tried to make a purchase through PayPal using their credit card (signup optional) and either their email address or card number had already been assigned to a PayPal account (that they had probably forgot about or their spouse might have signed up and not told them about…) it wouldn’t let them complete the purchase without logging into their PayPal account. Depending on your volume you could loose a significant number of sales due to this.
PayPal Payments Pro also looks like a huge step forward, because it’s similar to offering both payment options, but you might loose some sales due to people trying to pay with their credit card when either their email address or credit card number is already associated with a PayPal account. I don’t know for sure if it would create a problem using Payments Pro, but before Payments Pro if someone tried to make a purchase through PayPal using their credit card (signup optional) and either their email address or card number had already been assigned to a PayPal account (that they had probably forgot about or their spouse might have signed up and not told them about…) it wouldn’t let them complete the purchase without logging into their PayPal account.
In my experience, this problem does not happen with PayPal Payments Pro.
Bull. Crap.
You can use paypal the FIRST time without signing up FIRST. To pay by credit card, you must enter your credit card, name address, and a NEW PASSWORD.
The next time you attempt to pay by credit card at a site that uses paypal only, YOU MUST USE YOUR EMAIL AND PASSWORD.
It still plain sucks, I'm in the process of moving to a merchant / gateway.
my host offers this for under $1000 / month sites:
(USA ePay)
Application Fee: NONE
Cancellation Fee: NONE
Yearly Fee: $49.95
Contract Length: NONE
Monthly Minimum: NONE
Setup Fee (one time): NONE
Statement and Gateway Fee (monthly): $9.95
Per Transaction Fee *: $.40
Qualified Discount Percentage**: 3.50%
and this for over:
Authorize.net / USA ePay
Application Fee: NONE / NONE
Cancellation Fee: NONE / NONE
Yearly Fee: NONE / NONE
Contract Length: NONE / NONE
Setup Fee (one time): $55.00 / $49.95
Statement Fee (monthly): $10.00 / $10.00
Gateway Fee (monthly): $15.00 / $10.00
Per Transaction Fee *: $.31 / $.26
Discount Percentage: 2.24% / 2.24%
Monthly Minimum: $15.00 / $15.00
for what you get, not a bad deal compared to paypal.
It's as simple as that.
You can use paypal the FIRST time without signing up FIRST. To pay by credit card, you must enter your credit card, name address, and a NEW PASSWORD.
The Account Optional checkout does not require the customer to create a password. PayPal's Account Optional checkout uses the following pages:
1. Order summary page - with login on one side and credit card logos on the other. The customer clicks "Secure Checkout" to continue.
2. Shipping page (if shipping is required) - the customer is asked for a shipping address.
3. Billing page - the customer is asked for credit card details, billing address, email address, and phone number.
4. Order review page - the customer sees all of the order information and clicks "Pay" to finalize the transaction.
5. Order complete. The customer is then asked if they want to save their information in a PayPal account. This step is optional.
If you are seeing a checkout page that displays the payment details at the top and then asks for credit card information and a password on the same page, then Account Optional checkout is not enabled for the purchase. You can check your account's Profile to see if Account Optional is enabled in your Website Payments Preferences; however, some transactions may not qualify for Account Optional checkout even when it is enabled in the merchant's Profile.
I totally disagree. There are plenty of websites out there who are trying to do a serious business, processing tens of thousands of dollars each month, but can't have their own merchant account because the business model is considered to be high risk or there is no merchant account available in their country. Those are exactly the companies who will look for a third party processing solution.
Regarding Paypal: It's a solid company and a solid solution, but unfortunately, there are people who don't like to use that service. I personally never walk into an IKEA store. If you do go with Paypal, make sure you have an alternative payment solution as a back up. It's all about giving your customer options.
I'm now with Protx/Barclays and must admit that the system I now have is far better and converts better.
It is far better because of speed - no going off to PayPal's server everytime something goes into the basket.
And I'm also able to tailor it so that when I do go to Protx for secure payment it has my exact layout and not some standard layout with my name written above looking rather cheap.
It's also easier to tailor - I kept getting people from countries ordering goods even though mine was UK only site. They circumvented the drop down in the address. Not anymore they don't because Protx give you the option of not even showing the customer address once it has already been entered on your site.
I just found the one size fits all approach no longer worked once I was serious about being in business.
I have also experienced an increase in sales but that may be partly due to better search engine rankings. I am a newish business so sales haven't matured and thus comparisons are a little difficult to determine for sure.
