Taking Credit Cards with PayPal

Folks seem to have a love-hate relationship with PayPal. Many love the service, others hate it. The service, however, is continually evolving. PayPal seems to be making a valid effort to improve the service by addressing drawbacks and expanding merchant tools. For example, PayPal now offers encrypted HTML to prevent buyers from fraudulently changing payment information and/or accessing digital download files without paying.

Transaction Types

You can accept online payments through PayPal for most items and subscriptions. There is, however, a list of restricted items similar to most merchant account and other third party processor accounts.

Unlike most third party payment processors, you can send as well as take payments online with PayPal. With a premier or business account you can send mass payments electronically. Anyone (even people without a PayPal account) can send payment to any individual with an email account. One can pay bills online as well. As of this writing PayPal accepts bill payments to over 1,000 billers, with no charge to the sender. Because PayPal is integrated with Ebay, you can also directly pay for Ebay auction items.

Some Advantages to Using PayPal

PayPal is more than a payment processor. Besides acting as a third party payments processor, PayPal also provides auction tools for buyers and sellers; a PayPal credit card; a debit card; and chargeback protection.

There is also extensive and detailed support documents. The site is informative and easy to use relative to some other third party payment processors.

As with all third party providers, using PayPal (as opposed to having a merchant account) means less administrative work, no long term agreements, and lower overall cost for most low-volume accounts.

Drawbacks to Using PayPal

As with all third party credit card processors, PayPal has a higher fee per transaction (discount rate, etc.) than a merchant account. This means that at high dollar volumes, PayPal may be more costly than a merchant account.

PayPal has a "suspicious activity" function that annoys some people. It seems that if account activity is especially active, the company freezes account funds for a time.

In the past, customers were required to have a PayPal account, which created an additional payment step and inconvenience. 

Paypal Credit Card and Payment Fees

As a third party payment processor, PayPal is more economical than some other, competing services. There is no activation fee. Cost for sellers is 30 cents per transaction plus a 2.2% or 2.9% fee.

How to Sign Up or Get More Information

To learn more about PayPal, go to the overview page.

Merchant Accounts - Like Cardservice International (just below) - Are an Alternative to PayPal:

Deciding What's Best for You

Take-Payments-Online.com can help you through the decision of how to accept payments online and suggest resources to consider. Each section of the site is devoted to a piece of the online payment "puzzle". You will find pros and cons associated with each choice, questions to ask before signing on, and potential pitfalls.

Whether you take payments online through an Internet merchant account, through a third party payment processor, or both, read all agreements carefully before committing. Do not hesitate to ask the providers questions if information is unclear or incomplete.

Put together the "puzzle pieces" for taking payments online and your ecommerce Web sales will flourish!

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