# Shopping Cart: Paypal only Vs Merchant Account



## adpro76 (Jan 2, 2009)

I'm currently using a yahoo store I got set up with their merchant account service so I can accept all the standard credit cards. I also accept Paypal.

What I'm wondering is if anyone has experimented with only taking paypal and dropping the merchant services since people can pay with their credit cards through paypal even if they don't have a paypal account.

I do less than $500 per month in sales so anyway to cut expenses is a big plus, but I'm worried sales will go down if I don't offer the standard merchant services. Has anyone else already done this? Did you see a noticeable drop in sales or an increase in abandoned orders?


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## splathead (Dec 4, 2005)

How much does the merchant account charge vs. Paypal? They should be about the same,


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## adpro76 (Jan 2, 2009)

splathead said:


> How much does the merchant account charge vs. Paypal? They should be about the same,


The merchant account is $34.95 base fee plus transaction charges. I think the base fee is waived if you go over a certain amount of sales, but I never have.

I'm sure it'd be comparable with paypal but I'm really trying to figure out if I'll lose sales by not offering the traditional credit card processing.


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## dan-ann (Oct 25, 2007)

as a shopper would not bother me one bit since you can use your credit card or paypal with the paypal account. Why pay for having 2 different services.


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## Pwear (Mar 7, 2008)

Paypal Pro can be integrated into your cart as a merchant service. It'll process cards right on your site without redirecting to Paypal, just like a normal merchant account would. I believe it's 30 bucks a month plus some percentage of sales.


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## Steph (Jan 26, 2008)

When I still had my site up, I was using just Paypal. It would direct customers to Paypal, and then send them back to my site when they were finished, which was fine.

What I DID NOT like, and actually took many, many phone calls about, was:

-Sure, they say you can use your credit card. However, for a customer to actually go through and use their credit card instead of a Paypal account was confusing for many. The "Pay by Credit Card" link is tiny and buried in text, whereas the "Login to Paypal" is large and obvious. Lots of customers were confused, calling to ask how to pay by CC. I also had a great deal of customers abandon at this exact screen in the checkout process

-If you already have a Paypal account associated with your CC #, you have to pay by logging into Paypal. Lots of customers did not want to do this for several reasons (lost Paypal login, spouse has access to Paypal as well and its a gift, etc.)

When I launch again, I am really going to make an effort to not use Paypal. That being said, if the cost is prohibitive to use an alternate method, Paypal did work fine.


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## spiderx1 (Oct 12, 2009)

I use the PAYPAL version to take all credit cards even though they do not need a paypal account, however, when they go to the sight it can be confusing and appears as though you need a paypal account when you do not. I feel that I have lost many sales due to this. I need to change also, open to suggestions.


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## adpro76 (Jan 2, 2009)

Here's the url for the info on paypal pro:

https://merchant.paypal.com/cgi-bin/marketingweb?cmd=_render-content&content_ID=merchant/wp_pro


They say that their model works out to be cheaper than most merchant service accounts, but I do not pay any of the fees they have listed in the example and their cost per transaction is higher. It's probably still pretty comparable though. It would be nice to have everything under one account, but doesn't look like it'll save me any money. They do mention that customers stay on your site.

Doesn't google have a cart? Has anyone used that?


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## aemdesign (May 26, 2009)

Thanks adpro. This is excellent info. I don't know why I haven't been inundated with emails about this by Pay Pal.


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## Pwear (Mar 7, 2008)

spiderx1 said:


> I use the PAYPAL version to take all credit cards even though they do not need a paypal account, however, when they go to the sight it can be confusing and appears as though you need a paypal account when you do not. I feel that I have lost many sales due to this. I need to change also, open to suggestions.





Steph said:


> When I still had my site up, I was using just Paypal. It would direct customers to Paypal, and then send them back to my site when they were finished, which was fine.
> 
> What I DID NOT like, and actually took many, many phone calls about, was:
> 
> ...


Guys, read my post above again. With paypal *PRO*, customers can enter their credit card info ON SITE, like any other merchant account. They are NOT redirected to the paypal website to make a payment. In fact, there is almost no mention of Paypal at all depending on the checkout software you're using.


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## Tshirtguy (Jul 12, 2006)

I never liked using paypal as the only means of accepting payment because they make it look like you can't just pay with a credit card and not sign up. If they would make that part obvious and not hidden initially it would be great.
If you want to use a paypal like solution, that you just setup and point to without getting a merchant account, you can use 2checkout.com.
They'll take credit cards and let you get setup in a few minutes. It's more expensive than a merchant account and if you are doing volume you should do it the right way but for starting out it's not bad. No monthly minimums or service charges.


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## Pwear (Mar 7, 2008)

Once again, paypal *PRO* will not make it look like you can't just pay with a credit card and not sign up - it is SEAMLESS with your website, just like any other merchant account.


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## Tshirtguy (Jul 12, 2006)

I was talking about standard paypal , not PRO. 
Setting up PRO is really just like the way a standard merchant account works.
I was offering 2checkout as an alterntive to paypal standard (which does make paying with a CC confusing), for people that don't want to setup a monthly contract yet and also still want to use the easy html setup of a paypal cart.

PayPal PRO is a great alternative to standard merchant accounts. I would have used it instead of Authorize.net but when I set mine up a few years ago, PRO wasn't working with godaddy.


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## Steph (Jan 26, 2008)

Pwear, since the original poster was asking about using Paypal vs. merchant accounts, I think that's why we were answering with our experiences with just Paypal (not that we were disregarding your suggestion)

Thanks for the information on Paypal PRO, something to consider for sure!


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## in2infinity (Dec 8, 2009)

On thing to consider. Using PayPal only you do not have to be PCI compliant. If you use PayPal pro or and other direct merchant services which allow you to accept credit cards then you must be PCI compliant ... I believe after June of this year.

PCI compliance is not a small issue.... you'll have to do some research as to what it takes to be compliant ... actually a lot of research since there is a lot of conflicting information out there.

The credit card companies do not want small businesses taking credit cards directly. They claim the majority of fraud comes from small business handlers of credit card data. PCI compliance is designed to make it such a pain in the *** that you won't bother for $500/month in sales.

We're working on being compliant ... our servers have been tested and passed, but there is a long long questionnaire you have to take from a certifying agency (which costs $150/year) to be certified. If you answer no to any question then you fail compliance. Accepting credit cards directly without compliance after their requirement data can lead to huge fines.


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## Arboristsite (Nov 20, 2006)

I bought into a merchant account and barely use it. My paypal sales are 95% of what I have had people use. I wouldn't even bother with a merchant account till you get more sales. It is convenient at times but that is all I can say. I use it mainly phone in sales.


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## adpro76 (Jan 2, 2009)

Arboristsite said:


> I bought into a merchant account and barely use it. My paypal sales are 95% of what I have had people use. I wouldn't even bother with a merchant account till you get more sales. It is convenient at times but that is all I can say. I use it mainly phone in sales.


Hmm, that's not been my experience--about 2/3 of my transactions are through the merchant account. I will say to anyone thinking about it though: don't waste your money accepting discover and amex. I can count on one and the number of transactions for these cards I get each year and amex charges more than everyone else.


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## adpro76 (Jan 2, 2009)

in2infinity said:


> On thing to consider. Using PayPal only you do not have to be PCI compliant. If you use PayPal pro or and other direct merchant services which allow you to accept credit cards then you must be PCI compliant ... I believe after June of this year.
> 
> PCI compliance is not a small issue.... you'll have to do some research as to what it takes to be compliant ... actually a lot of research since there is a lot of conflicting information out there.
> 
> ...


Wow. I just read about this on Yahoo's Small Business help and it was really vague. The general gist that I got was that the credit card companies can make you do whatever they want.

I was able to determine that I am class 4 because I do less than 20,000 transaction per year, but couldn't really discern the significance of being in one class over another.

Are there any other threads on this?


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## SkullDude (May 10, 2008)

in2infinity said:


> On thing to consider. Using PayPal only you do not have to be PCI compliant. If you use PayPal pro or and other direct merchant services which allow you to accept credit cards then you must be PCI compliant ... I believe after June of this year.
> 
> PCI compliance is not a small issue.... you'll have to do some research as to what it takes to be compliant ... actually a lot of research since there is a lot of conflicting information out there.
> 
> ...


All this extensive checking your doing is because I am assuming you are going to be storing credit card info on your servers.

I was reading on the cube cart forum and hoping maybe someone could confirm this but if you use Paypal Website Payments Pro which allows you to accept credit card info directly on your website and they act as both the gateway and the merchant account you don't need to do this extensive auditing because you aren't storing any Card info. All that is required is an SSL and dedicated IP address which I know, for instance, hostgator can provide for about 5 extra bucks a month, if you aren't already getting their shared business hosting package. And your host must be pci compliant. 

Can someone confirm this info about paypal website payments pro?


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## Arboristsite (Nov 20, 2006)

adpro76 said:


> Hmm, that's not been my experience--about 2/3 of my transactions are through the merchant account. I will say to anyone thinking about it though: don't waste your money accepting discover and amex. I can count on one and the number of transactions for these cards I get each year and amex charges more than everyone else.


 I guess it depends on your site. I do agree with you on amex and discover.


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## in2infinity (Dec 8, 2009)

SkullDude said:


> All this extensive checking your doing is because I am assuming you are going to be storing credit card info on your servers.
> 
> I was reading on the cube cart forum and hoping maybe someone could confirm this but if you use Paypal Website Payments Pro which allows you to accept credit card info directly on your website and they act as both the gateway and the merchant account you don't need to do this extensive auditing because you aren't storing any Card info. All that is required is an SSL and dedicated IP address which I know, for instance, hostgator can provide for about 5 extra bucks a month, if you aren't already getting their shared business hosting package. And your host must be pci compliant.
> 
> Can someone confirm this info about paypal website payments pro?


We do operate our own servers so we have to be compliant even though we don't store card data from internet transactions here (or anywhere for that matter). If your site handles credit cards directly, it must be compliant. That may mean your hosting service has to be compliant ... it may also mean you have to be as well. I'm not sure on that point, since we handle both I just know we have to be. I'm also sure that if you store credit card info on a computer that is attached to the internet (even if its in quickbooks) you have to be compliant. If you only use a card swipe machine and never store the card data, or use a third part processor like PayPal standard then I don't thing you have to be ... not positive on all the nuances, ifs, and's or but's, so you'll have to do your own research.

The reason PayPal Pro falls into the compliance area is even if you don't store the card data it would be possible through DNS spoofing, cache poisoning or some other IP manipulations to direct users to a fake clone of your site which collects card data maliciously. PCI compliance testing is supposed to make sure that can't (easily) happen. Paypal standard takes all the processing off site so in theory the actual transaction can't be spoofed ... at least as long as you don't believe the old axiom that "if man made it, man can get around it". So if you use paypal pro, whoever handles your hosting has to be compliant.


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## SkullDude (May 10, 2008)

in2infinity said:


> We do operate our own servers so we have to be compliant even though we don't store card data from internet transactions here (or anywhere for that matter). If your site handles credit cards directly, it must be compliant. That may mean your hosting service has to be compliant ... it may also mean you have to be as well. I'm not sure on that point, since we handle both I just know we have to be. I'm also sure that if you store credit card info on a computer that is attached to the internet (even if its in quickbooks) you have to be compliant. If you only use a card swipe machine and never store the card data, or use a third part processor like PayPal standard then I don't thing you have to be ... not positive on all the nuances, ifs, and's or but's, so you'll have to do your own research.
> 
> The reason PayPal Pro falls into the compliance area is even if you don't store the card data it would be possible through DNS spoofing, cache poisoning or some other IP manipulations to direct users to a fake clone of your site which collects card data maliciously. PCI compliance testing is supposed to make sure that can't (easily) happen. Paypal standard takes all the processing off site so in theory the actual transaction can't be spoofed ... at least as long as you don't believe the old axiom that "if man made it, man can get around it". So if you use paypal pro, whoever handles your hosting has to be compliant.


Were kind of saying the same thing. But you have to do all that expensive compliance testing because as you said you have your own servers. I would bet the vast majority of people here don't operate their own servers as it just is not necessary for most people. Which means that as long as you aren't storing credit card info, all you should need is a pci compliant host, possibly a dedicated ip and a minimum of 128 bit ssl for transmitting the credit card numbers (I can get all this for 15 bucks a month.) I just got off the phone with paypal and spoke with my host, hostgator and they confirmed these facts. It actually really is not that hard if you all you want to do is be able to accept credit cards on your site, as Paypal website payments pro can handle pretty much all of that.

Here is a good discussion on another forum on a similar topic with a paypal certified developer in case anyone is interested: How much PCI compliance do I need? - Website Payments Pro (US) - PayPal Developer Community


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## HA (Jan 9, 2010)

If your making it easy for your customers to purchase with your site and only paying $30.00 a month and bringing in $500.00 a month I say just keep paying it and work on increasing traffic and turning hits into sales. That's what I would do because your doing something right. Obviously people like your stuff. I think you just need to improve in other areas to get a continual increase. If I did $500 a month I'd be stoked! Good job-Jeff


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## Cutebrands (Apr 12, 2011)

Hey Guys,

Almost got my website up, so if i used Paypal pro for all my customer credit card processing and i dont store the credit card info, and lets say my domain host is PCI compliant, i am good?

Does paypal have some kind of terminal for backend processing and if i sell at conventions, some kind of swiper card i can attach to a Iphone?


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## splathead (Dec 4, 2005)

Paypal Pro does not work on every shopping cart. They have a list of the carts they work with. You may be able to certify your own site with them, but I'm not sure.

PP Pro comes with terminal service. You can process customers card on a webpage after logging into your site.


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