# Paypal merchant account vs. other companies



## rojoepeters (Feb 28, 2007)

Trying to figure out the pros and cons of setting up a merchant account is a little daunting. I was thinking of going with a paypal account, but not sure if this is the best way to go. If anyone can share their experiences with using paypal versus other merchant set-ups that would be awesome. Thanks


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## Rodney (Nov 3, 2004)

rojoepeters said:


> Trying to figure out the pros and cons of setting up a merchant account is a little daunting. I was thinking of going with a paypal account, but not sure if this is the best way to go. If anyone can share their experiences with using paypal versus other merchant set-ups that would be awesome. Thanks


While you're waiting for answers here, you can read lots of pros and cons, experiences, and tips about paypal here: http://www.t-shirtforums.com/tags/paypal/


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## peteVA (Nov 11, 2007)

From a cost standpoint, PayPal is your best choice until your monthly volume gets above $ 2,000. At that point a merchant account could be considered.

The problem with PayPal from the customer side is ther are a number of "I'll never use PayPal" folks out there. And there also a lot who can't get an account, have had theirs closed, etc.

Of course, there are even more who don't have credit / debit cards.

If I had to have one or the other, I'd go with a merchant account. But I've had at least one for years and am used to doing business that way. I now offer both PP and a MA and find that by far the most US purchases are through the MA. But, since I do a lot of international sales, where MA's don't work, I still get a good amount of PP sales. I also use Moneybookers, for some who can't get PP in the UK/EU market.

Putting my personal feelings to the side, I'd say go with PP until you have a good monthly volume. Keep in mind that virtually every MA out there will have a minimum cost of $ 20 per month - even if you never use it.

In fact, one of the things I suggest when comparing MS's is to get a firm figure of what will be your "zero sales per month" cost will be. It's easy to be misled by the online "comparisons". There are so many fees, you have to find the bottom line.

Some have a monthly minimum that includes things like statment fees. others have a minimum that applies to processing only, so you amy find a deal with a $ 20 monthly minimum in processing fees (in small type, of course). But they may also have a $ 10 statement fee and a $ 15 gateway fee, niehter of which are included in the minimum processing fee, leaving you with a bare minimum $ 45 cost. 

BEWARE!


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## jgordo415 (Oct 15, 2007)

thanks for the tips


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## KCINNV (Aug 12, 2007)

I read the article and I decided to go with paypal instead of google. Reading the article helped clear thinks up for me maybe it can help you too.


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## sunnydayz (Jun 22, 2007)

I use the paypal merchant account as I sell to alot of young moms and they seem to prefer paypal alot of the time. With this I can except paypal and credit cards and I have not had any problems so far. I compared prices and with the gateway fees and Merchant account fees there wasnt that much of a difference except that I can also except paypal and credit cards with the same account.
hope this helps


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## SunEmbroidery (Oct 18, 2007)

We use PayPal & the only problems we've encountered is that a credit card that is used by a group such as a government agency can only be associated with one PayPal account. Also, email addresses can only be associated with one PayPal account & that can cause problems. I really like PayPal's invoicing tool. It's easy to use.


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## percival (Oct 24, 2007)

i've found paypal is THE best! all you need is an email account setup with paypal, which is then linked to your account! everyone who's willing to shop online has one because of ebay and people trust it!!!


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## sunnydayz (Jun 22, 2007)

SunEmbroidery said:


> We use PayPal & the only problems we've encountered is that a credit card that is used by a group such as a government agency can only be associated with one PayPal account. Also, email addresses can only be associated with one PayPal account & that can cause problems. I really like PayPal's invoicing tool. It's easy to use.


I guess I dont have the problem of what email account does the purchase because on my webstore it asks for a payee email and a shipping email along with the address so I just go by my stores invoice instead of the info from paypal.


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## T-BOT (Jul 24, 2006)

peteVA said:


> From a cost standpoint, PayPal is your best choice until your monthly volume gets above $ 2,000. At that point a merchant account could be considered.
> 
> !


i think Paypalo also has an atractive rate for business that accomodates high volume $$$$ merchants now. Just CALL them up.


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## LeeParker (Nov 1, 2006)

I had a MA for about 8 years and switched to a PayPal account & been with them for about 4 years. They just recently bumped their monthly bill up from $20 to $30 to be more "competitive", which I think means closer to what their competitors charge. Still, they are less expensive and you get a virtual terminal you can use if you do events and get phone/mail orders. The buyer does not have to have a PayPal account as far as I know.


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## peteVA (Nov 11, 2007)

Ideally, the thing to do is have a regular PayPal business account and an oline merchant account. 

You've got to face it, there are a lot of people who believe PayPay Sucks. There are a lot of people who just plain refuse to use PayPal. They've had problems in the past, they feel they go screwed by PP. they had an account and got cut off, etc. 

Some, even with the PP merchant account / virtual terminal you will not get their business. And at $ 20, they were in line. At $ 30 they are high. I can get you a merchant account that has TOTAL fees of $ 20 a month. No minimums, etc. If you process no cards for a given month the total is $ 20. With PP it's $ 30.

Rates are 2.34 and 30 cents. Non quals are reasonable and they do not charge the fee again for credits, like some do. Yes, some processors charge you the percentage when you sell and charge it again when you issue a credit. Get you coming and going.

Gateway fee $ 15, statement fee $ 5, nothing else, no minimums. Just the 30 cents and 2.34 %.

OH, yeah, with a merchant account it's in your bank in two days. You don't have to do anything.
.


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## sunnydayz (Jun 22, 2007)

Even though my paypal payments pro excepts paypal, it give the choice of using paypal or credit cards, when they pay with a credit card or paypal it stays on my site and does not go to paypal. So if they choose credit card payment it does not even show it is being processed through paypal. I hear alot of people saying that thier customers wont like it because they dont like paypal but it doesnt even say they are using paypal unless they choose the paypal option.


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## peteVA (Nov 11, 2007)

Interesting, I was not aware of that.

Does the money go to your paypal account or to your bank, as a regular merchant account?


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## sunnydayz (Jun 22, 2007)

peteVA said:


> Interesting, I was not aware of that.
> 
> Does the money go to your paypal account or to your bank, as a regular merchant account?


It goes to my paypal account but the processing part is integrated in my website so it just goes to a page on my site with the same header and everything, they never leave my site to process their payment.


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## peteVA (Nov 11, 2007)

OK, $ 10 more a month, a bit higher on the percentage and they don't put the mney in the bank unless you ask. Then it takes a couple of extra days. 

Thanks for the info. I'll keep that in mind. 

Are you using a shopping cart, or just pp buy now buttons?


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## sunnydayz (Jun 22, 2007)

I have a shopping cart. yea the transfer thing is kind of a pain but it ok. I use the shopping cart because I have a lot of attributes for my products and I also do discount codes. hope this helps


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## rojoepeters (Feb 28, 2007)

Hey Pete,

Thanks for the info. One of the the things that worried me about a traditional merchant/gateway setup was the monthly cost. From what you have said this seems better than reasonable. Can you give me the name of the merchant account that you were talking about in your post. Thanks a bunch.

Robert


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## peteVA (Nov 11, 2007)

Bobbie,

What shopping cart are you using? The one from paypal, or another?

Robert - Here's a link to their pretty basic site.

Don't sign up there, PM me, I've got a group deal with them from a forum I've had for some time. The rates are better through the group.

Accept Credit Cards Online with iTransact, Inc.


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## sunnydayz (Jun 22, 2007)

peteVA said:


> Bobbie,
> 
> What shopping cart are you using? The one from paypal, or another?
> 
> ...


 
You know this is going to sound really stupid, but it has been so long since I set it up that I dont remember, but on the paypal site there is a list of the shopping carts that are compatible with paypal payment pro service, I just really dont remember which one it is, I do remember I had to go look on the list to make sure it would work. The reason I dont remember is because I use a hosting company where the shopping cart was already integrated into the website template so I just had to make sure it was compatible but I seriously dont remember which one it was  ok this is sounding like a really dumb blonde moment (that would be referring to me hehe)


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## bbrenda88 (Aug 2, 2007)

percival said:


> i've found paypal is THE best! all you need is an email account setup with paypal, which is then linked to your account! everyone who's willing to shop online has one because of ebay and people trust it!!!


Ebay is the reason I signed up with Papal, and I prefer to only pay using my Paypal because it is trusted.


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## bbrenda88 (Aug 2, 2007)

sunnydayz said:


> It goes to my paypal account but the processing part is integrated in my website so it just goes to a page on my site with the same header and everything, they never leave my site to process their payment.


I have seen where you can set it up that way I think that is cool, I'm thinking of settin mine up like that eventually.


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## peteVA (Nov 11, 2007)

brenda, that's fine. It's your business and you can run it however you like.

But, there are people who will not, or cannot, use paypal. I sell a lot in the UK and Europe and have had to open a Moneybookers (European/UK kind of PayPal) because PayPal won't work in some countries.

It is trusted, there is no doubt of that. But mainly by eBayers. Others have no use for it and there is a site called paypalsucks. 

I have orders come in with it every day. But I can tell you this, I offer both PP and a regular merchant account and in the US, where they have a choice I get twice as many payments with the merchant account than I do with PayPal.

Elsewhere, UK, Australia, Greece, Israel, Cyprus, you name it, they all use PayPal, because US merchant accounts will not take other cards. But in the US I get more regular cards than PayPal.

Business is tough, I want all I can get, not just a certain group.
.


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## sunnydayz (Jun 22, 2007)

When paying with a credit card, you do not have to have a paypal account to make a purchase with the payment pro account. You simply make a payment with your credit card just as you would any other site, it does not require a paypal account.


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## saltybeachdianne (Oct 17, 2007)

Hi All,
This is fantastic information as I have to sign up for a merchant account or paypal in the next 2 days. 

Is the following information correct? 
If using the Website Payments Pro service thru paypal...
1. PayPal is only $30 a month, even if I do not have any sales
2. Customers use their visa/mastercard AND do not need a Paypal account
3. Customers have the option of paying via paypal
4. All monies are desposited in my paypal account, not my companies checking account
5. If a customer pays via their visa/mastercard they remain on my website and are not even aware that Paypal is providing my merchant account services. 

Is the only downside seems to be the manual transferring of fund from paypal to my business checking account. 

THANK YOU AGAIN, this has been a really time consuming task. This forum is great. 
Dianne


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## peteVA (Nov 11, 2007)

There is one other consideration.

If you are using a shopping cart not all that will work with the regular PayPal accounts will also work with the PayPal Paymants Pro system. It is entirely different than the regular PayPal link.

I have not researched it at this point, but I will bet that some of the carts shown on the PayPal sites as working with PayPal will not work with the Payment Pro.

So, before making a final decision, if you presently have, or are planning to install, a shopping cazrt, make sure it will work with Payments Pro.


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## sunnydayz (Jun 22, 2007)

peteVA said:


> There is one other consideration.
> 
> If you are using a shopping cart not all that will work with the regular PayPal accounts will also work with the PayPal Paymants Pro system. It is entirely different than the regular PayPal link.
> 
> ...


They have a page that shows which carts work with payment pro and you are right pete, definately check which carts work with payment pro services.


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## saltybeachdianne (Oct 17, 2007)

Thank you both! 
My web dudes are using ProStores Business, so I just emailed them to figure out if it will integrate. I will wait to hear back and then go from there. 
Dianne


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## Cloud9 Design (Aug 29, 2007)

sunnydayz said:


> I use the paypal merchant account as I sell to alot of young moms and they seem to prefer paypal alot of the time. With this I can except paypal and credit cards and I have not had any problems so far. I compared prices and with the gateway fees and Merchant account fees there wasnt that much of a difference except that I can also except paypal and credit cards with the same account.
> hope this helps


Yeah, I think Paypal is going to work out good for me, since my customers will use paypal or credit cards. And the fact that yuo mentioned is true! You can use both with a PayPal account, but not with a merchant acct.


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## vexx78 (Oct 15, 2008)

I got a merchant account because my bank, Bank of America said paypal wasn't good enough and a merchant acct was needed but it seems like Paypal can act just like a merchant acct. So it serves as a gateway and no need for the customers to get a paypal acct? I have to go to their site to see it on print. My other question was do they charge you again, after the fees of initial credit card transaction, to transfer funds to your business account? Is the PP Pro really worth the money? Is it better to have both a merchant acct and paypal? Ony one person said it was better but he's more in the international market so I guess if my business target market is basically the US then I don't need a merchant account. I have Flagship Merchant: http://www.t-shirtforums.com/ecommerce-site-design/t67404.html but I might cancel and eat the $75 canellation fee to save money for the time being.


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## SunEmbroidery (Oct 18, 2007)

Customers don't need a PayPal account to pay with PayPal. There isn't any fee to transfer money to a bank account. We use a basic PayPal account so I can't comment on PP Pro except with that upgrade you can maintain the look of your site during the payment transaction rather than having your customers go to the PayPal site. Some people feel that maintaining the look of their site gives the site a more professional look. Some customers may prefer paying on the PayPal site because they are familar with it and trust it more than giving personal information to an unknown merchant. One primary issue with PayPal is that an account can be frozen (I've heard people say this happened to them) if is there is a dispute. In this case it would be good to have an additional merchant account. I've never had this happen myself. Another reason to have an additional merchant account is for customers who don't use PayPal (usually because they've had a bad experience or they always pay by check (some businesses).


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## well (Nov 25, 2008)

Hi PeteVA,

I'd be interested to hear which MA you use, there's obviously a lot out there, if you're able to share that. 

Michael


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