Why A Traditional Merchant Account Is Superior to Paypal

May 18, 2011 1 Comment

This is a guest post by Veritrans Merchant Services. If you want to guest post on this blog, check out the guidelines here.

Paypal is quickly becoming one of the most popular of the online payment processing services. It would seem that consumers interested in both buying with Paypal and sellers wish to use Paypal for their online merchant account needs. But, does popularity automatically translate into the very best payment and credit card processing service available? The answer may very well be no. In fact, there are traditional merchant account services available which could greatly exceed what Paypal has to offer.

Such an assessment is not pulled out of thin air. There are quite a few well established reasons why a merchant account may be a much better option than selecting Paypal.

So, what is a traditional merchant account for credit card processing? Basically, the online version of a merchant account is no different than the one you would employ with a brick and mortar store. You would align with a major bank which would help facilitate credit card processing. Basically, once the credit card order is processed your funds will be deposited into your bank account. This is a simple business concept that has been employed effectively for decades.

At this point, some may be saying that Paypal offers many of the same benefits with far less steps. Why would a traditional merchant account deliver greater benefits than what Paypal offers? There are more than a few reasons why a merchant account is more beneficial.

It is true those doing less than $2,000 a month in revenue might find Paypal to be a better plan. For those that are doing in excess of $2,000, however, a merchant account has far more to offer. One reason is that a merchant account may end up being cheaper because the transaction fees are lower. Yes, there will be a monthly fee for merchant account credit card processing. However, you will make that money back in what you save from the transaction fees you would incur with a high volume of monthly revenue.

Another major issue with Paypal is that it is a very arbitrary service in terms of its rules. Really, Paypal can do what it wants when it wants. One example of this would be putting an immediate hold on the account if it sees problems with your account. Once the account is put on hold, you are in a lot of trouble as far as collecting your money. You will not be able to withdraw funds and customers may not even be able to send you money. That basically shuts your entire business down at least from a credit card processing perspective. With a traditional merchant account, there is far too much to lose from a customer service angle to engage in such arbitrary freezes on an account. This is not to say Paypal will automatically shut down your account without warning but unexpected events do occur and you will certainly want to avoid such issues.

Also, when it comes time to withdraw your funds, Paypal might have a several day delay for the money to be deposited. With merchant account credit card processing, you will likely find the funds are delivered a lot quicker which is always a major plus when you want to access your funds. Paypal has its benefits but it also has its issues. For those wishing to avoid such issues, a traditional merchant account might be the best option.

Veritrans Merchant Services is a merchant account provider that offers low rate credit card processing for small business.
1301 Regents Park Dr, Houston, Texas 77058
(281) 474-4144

Paypal Buyer Protection Update

October 25, 2010 0 Comments

I received an email over the weekend about an update in the terms of Paypal’s Buyer Protection. In the past, buyers that used paypal where protected from the usual things that happen, but really had no recourse when items were not as described. The process was always he said/she said and Paypal was right in the middle. Most sellers won these types of disputes, but now Paypal will be changing the game. I don’t like how they plan on doing it as I used to sell online for 6 years and came across many of these disputes. The issue is that most of the “not as described” disputes were because the buyer did not want to pay, so they tried to get their money back via Paypal. It is a large hassle and looks like it is going to become a larger hassle for honest and viable sellers. Here is the email that was received.

Hello,

As of 11/01/10, your customers who pay with PayPal are protected
for items they receive that are "significantly not as described".
This means that you may be liable for the cost including the original
shipping charges should they file a claim. However, by offering
this protection, PayPal helps encourage customers to shop on
your site.

We recommend that you make sure that photos and written
descriptions on your site are as accurate as possible, to help
avoid these types of claims.

The change to our buyer protection policy will take effect from
*November 1st, 2010* and won't apply to transactions made
before this date.

Thanks,

PayPal

While this update is great for buyers as it protects them from bad sellers, it can cause a problem with honest sellers. What Paypal might not know is that there are far more unethical buyers out there than their are sellers. Many people want something for nothing and now they know they have a leg up when it comes to something not as described. Some buyers might not like the color, so they will just make a Paypal dispute, but how do sellers combat these issues? I can see this being a major setback in seller protection that Paypal has pretty well with in the past. What do you think of this new change?

Paypal Payments Standard and Pro Comparison

July 15, 2010 2 Comments

I know this is not really a How-To, but I am asked this all the time by visitors and small business owners. I figured I would just place this video that Paypal created in order to answer some of the questions. I will say that if you want to keep your visitors on your website without redirecting to Paypal, then go with Paypal Payments Pro. You will need a shopping cart that is already integrated, but those are so easy to find and you might already have one. You can also have both Standard and Pro on your site if your shopping cart allows it. Some customers like to see the Paypal website when they checkout, so it might be a plus to use both. If you have a Pro account, then you can use standard with it. You have to sign up for a Pro account though as it costs a monthly fee. (This has the monthly fee in Pounds, but the comparison is still the same)

iMark Interactive