Lately, in one of those Facebook groups I take part in, the question arose again. If one use PayPal or a merchant account in your company? I used to conduct advertising teleseminars weekly to get a merchant account seller and this question came up on nearly every call.
You are probably all very acquainted with PayPal. It is a third party processor. You, the merchant, not ever see your clients’ credit card information.
It’s the account information for your gateway that you will set up in your shopping cart in order to accept payments.
While you can manually enter transactions with a gateway, for most online sales, you will want a shopping cart to work with a merchant account.
Merchant account fees are often pretty complicated. There will be per transaction fees. They will be something like 2.6% plus 30 cents per transaction. No-swipe fees – when you don’t swipe the card, such as in online purchases, are higher. You will almost always have a monthly minimum for the fees. If it’s $25 for example, if your transaction fees for a month add up to $25 or more, you’re good. If they don’t, you will be charged the difference between what they add up to and $25. You will also have a monthly statement fee – usually around $10 – and a monthly gateway fee – also usually around $10.
Whew! Pretty confusing, huh? And it seems like all those fees must make it cost more than PayPal, right? Not necessarily. I’ll get into that in just a bit.
The money from a transaction will automatically be deposited into your bank account in 2 days.
What Do Customers Think?
Does using PayPal affect how customers view your business? Will they avoid buying from you if you only accept PayPal? http://hack.uresma.com/paypal/ ?
When I started my business more than a decade ago, PayPal was seen as the more amateur choice for smaller vendors who couldn’t afford a merchant account. Online business was just getting going and a merchant account allowed the online vendor to look more like an offline ‘actual’ company.
It is different today. There are quite reputable and large businesses who utilize PayPal. I really don’t believe the picture of a company is harmed by utilizing PayPal today.
So How Do You Decide?
It actually comes down to 2 things. The first is fiscal. Though merchant accounts have all those prices, there’s a monthly sales stage at which PayPal’s higher transaction fees will be greater than a retailer account’s lower transaction prices along with all of the additional fees. Do the research for a specific seller and find out how it matches with your projected earnings.
The next element is customer services. I have never had a issue using PayPal, but other people have. In addition, I understand some online marketers whose merchant accounts abruptly stopped working in the center of a large launch. In case you’ve got a merchant account, you’ll almost certainly need support sooner or later and I favor phone support for possibly complex issues around online trades. Therefore, if you are considering getting a this kind of account, do a little research, ask your coworkers, and select one which has a great reputation for customer services.
How can I use? I used to get a merchant account, and now I use PayPal. I have never experienced a serious issue with either, and never had a client who discovered it suspicious that I use PayPal.
So keep in mind, this is only your next choice, not your final one. You could always change your mind!