Is Paypal the way to go?

Hi,

I am currently getting started with two new online businesses. Both are small with products less than $20-one is for magic books, one is for jewelry. These are basically hobbies put online.

I do want to accept credit cards because I think it will help sales. I don't have much capital. I've heard some horror stories, but is paypal the best fit for me or should I try another merchant account? If so, which one?

Thanks,
Rebecca

I'm currently testing out PayPal, its a good option if you want to keep your monthly fees low at the beginning. What I like about PayPal is that there's no setup fee and lower commision rates, at around 2.9%, but it takes awhile for the $ to deposit into the bank account,. but I'm up in Canada as well. Right now its only a temporary solution, then I'm going back to Internet Secure.

Another company you might want too look into is 2-checkout.com, there's a setup fee and $8 a month fee, plus 5.5% of each sale.

The other one that I've had dealings with is Internet Secure. There's a setup fee, can't remember how much, and monthly fee of around $50,. and I can't recall if there' any sort of % commission that goes to them or not. But if you're just starting out, that might be a bit pricey if you want to keep your overhead lower at the beginning.

In my experience having PayPal only as an option with no direct acceptance of credit cards will lose you a huge percentage of business. Probably on the order of 2/3 to 3/4 of people who might otherwise buy will go elsewhere. This is not scientific just experience with my website and reading about others experience.

On the other hand losing 70% of zero sales to start is no big deal. Despite what I said, PayPal may be a good choice to start. I had a eye catching "note" about using PayPal and how it was now owned by Ebay and you could now pay with a credit card through PayPal without signing up as a PayPal member. That helped a little when I was doing PayPal only.

I did NOT say that they sometimes have little recourse with PayPal if they change their mind or get ripped off (not by me!). I also had a problem with some people using PayPal and forgetting to include their address or phone number and their email address was no good so watch that.

Most of the horror stories I heard about PayPal were from people who were having a great many "returns" from customers who wanted their money back. PayPal went overboard, possibly even to an illegal extent, in freezing those accouts in order to refund customers money. I think a lot of PayPal problems are in the past but the stigma still remains which is one reason you lose so much business. Still, until you get enough business to justify the overhead of your own merchant account to accept credit cards plus shopping cart software then PayPal and/or a couple of the other alternatives may be the way to go.

PayPal has recently enhanced it's credit card services. Now you can accept credit card payments directly on your website and PayPal remains invisible.

Read about it here:

The service is definitely improving.

PayPal is a perfect solution for a small business. They have millions of satisfied users, many years experience.

Now with the introduction of Pro services they target middle business.

We are using PayPal for several years and quite happy with them.