Should I accept Paypal for Credit Card Payments?
Posted 23 March 2012 - 09:21 AM
Paypal has been calling us and wants to talk to us about using their system to also take credit cards. I just would like to know if this is a good option. I did some research and from what I see online their rate is the same as for regular paypal payments, 2.9% + 30 cents per transaction. We are always looking for ways to save money but also it's important that we have a good system that is reliable and safe and also that we have a good system for when chargebacks/disputes happen. One thing I like with Paypal's system is there's a flat fee where with a regular merchant account the fees get so confusing that it's hard to figure out. Plus, we pay a $15/month gateway fee. We are a fast growing company and I think as we get larger a lot of these monthly fees plus authorize.net gateway fees will become less of an issue. I realize there the discount rate is the base rate and there are interchange and other fees added on top for special cashback and rewards cards, etc.
We accept Visa, Mastercard, Discover Card, and American Express. I know we are charged a 22 cent per transaction fee for our American Express cards so that is paid through Wells Fargo but the discount rate of 3.15% I believe is paid through American Express and taken out of the total payment we get when someone uses American Express. Plus there is a $7.95 monthly fee for accepting American Express. If we take the amount on our most recent bill with no chargebacks that we processed minus American Express (it only has the .22 transaction fee on our Wells Fargo bill for each AmEx transaction) our fees come out to approximately 3.68% if we take the total processed minus AmEx to see what percentage our fees are charged in the month. This seems kind of high and I think part is the $31 monthly internet fee and the $25 monthly fee and this is not including the $15/monthly Authorize.net. For reasons like this it appears Paypal could be quite a bit cheaper and definitely simpler but again as we grow in size I know these monthly fees are less of an issue. Also, currently about 60% of our transactions are credit card. 38% or so are Paypal where we get the lower rates and approximately 2% are Google Checkout which has the same rates as Paypal.
We looked at our merchant account information. We saw the following fees:
Our discount rate for credit cards is listed as 2.10% and non-pin debit as also 2.10%.
We were being charged a $10/month fee for paper statements but just had that removed so we can get statements online. This 10$/month fee was in the earlier math I did above to get the 3.68% rate.
Chargebacks are $25 each and we only have 2-3 per year.
We also have a monthly minimum processing fee of $25 per month I called Wells Fargo and I donâ€™t know if they gave me the correct information. They explained this is charged monthly but anything under that we are charged less. I donâ€™t quite know what this means. If anyone knows more about a monthly minimum processing fee let me know.
We also have a $31 fee for our internet processing that is monthly.
There is a $45 annual fee.
Or authorization fee is .20 per transaction
The AVS is .01 per attempt.
I would only want to switch to Paypal if it's cheaper since I'm very happy with our current system with Wells Fargo and Authorize.net. We use Wells Fargo for our banking and other needs and there's a big advantage of staying with Wells Fargo. The last two years they have tried to raise our rates. Just now we got a notice about them going up to 2.4% for Credit and 2.15% for Non-Pin Debit. Last year we called them though and told them we had other merchant banks offering us lower rates and they lowered them back to 2.1%. We just received this 2nd notice so will make the same call soon. We really prefer to stay with our current system and even if Paypal was slightly cheaper we'd still stay but we want to also get opinions of using Paypal for credit card processing and if itâ€™s significantly cheaper weâ€™d consider it.
I have the following questions/concerns:
-When someone pays using a credit card through their system do they at any point have to leave the website or do they see anything that tells them that it's a paypal credit card system?
-Would I be able to get rid of Authorize.net?
-For anyone who has used them or heard about then, are they a good system to work with? Are they reliable for example?
-How about disputes? We have few chargebacks and I assume if there is one it is like a standard chargeback or maybe even a paypal dispute. Is there a charge for chargebacks like with a regular merchant bank and how well do chargebacks go when you have one?
-Would we still be able to accept all 4 major cards-Visa, MasterCard, Discover, and American Express?
-If we can take American Express is that handled separately such as how we have to do it now with a regular merchant bank? Will we have to pay the $7.50 monthly fee, etc?
Posted 31 March 2012 - 04:23 PM
30.00 a month
2.9%+ 0.30 per transaction.
You can process all 4 major cards
You won't need Authorize.net anymore
Customers won't have to leave your site if you collect the credit card info and process them manually. With the auto processing, then yes, they will leave the site and go to Paypal.
I've never had a chargeback so I don't know if there are fees involved though Paypal's customer service can answer that. I will say I've heard they won't fight for you at all. They are quick to hand the money back over in the case of a chargeback.
I've been using Paypal since they first opened, processed credit cards using the virtual terminal since it was first made available and I've never once had a problem.
As for being cheaper it all depens on how much money you are processing. Paypal's 30.00 a month is cheaper than what you pay monthly for Authorize.net. The question is will you process enough in credit cards to make Authorize.net's lower percentage save you more money than Paypal's 2.9%. I processed 24k through Paypal's Virtual terminal last year and it was still A LOT cheaper than Authorize.net would have been with their higher monthly fees. I admit I still prefer money orders. No money lost due to processing fees lol.
Posted 14 May 2012 - 09:39 PM
Posted 01 June 2012 - 01:12 PM
Posted 03 June 2012 - 03:15 PM
Quick question for you, I have been paying for PayPal Pro in order to accept credit card payment from my customers. Is it still the case? Can I use regular PayPal (without Pro) and still accept credit card payments from my customers? I don't know if there was some recent change to the system...
You only have the 30.00 a month fee from paypal if you are using the virtual terminal. I process all credit cards manually thruogh that virtual terminal to make sure the customer's card isn't being processed BEFORE I'm ready to ship because many, many customers get very upset when their card is charged immediately but the product doesn't get shipped for several days. I ship within 24 hours most days but things happen like those who order on a Friday won't ship until Monday. With PaypalPro they get charged immediately just like any other paypal transaction.
Posted 03 June 2012 - 09:38 PM
PayPal banns so many countries and customers that simply a lot of people who had problems with PayPal in the past can no longer pay you with their credit card, since stupid payPal will link each Credit Card to a customer, even if they do NOT wish to register, if they had an earlier PayPal account and was closed then you are no longer welcomed.
For example a seller on ebay sold his laptop and was paid via PayPal. 21 days later paypal discover that the person who paid him was a fraud .. they book the money back, charge a $35 chargeback fee from the seller. Seller tried to argue with PayPal and telling them it wasnt his fault if PayPal approved the payment in the first place ... PayPal shut down his PayPal account of the seller .. he can NO longer use PayPal or even pay with Credit Card on your site that is supported by PayPal.
More horror stories on PayPal http://www.paypalsucks.com/forums/
Our site offer Credit Card payments via Moneybookers, and if customers wish to use their PayPal account then they are welcome to do so as well.
But why would you put all your eggs in 1 basket, I dont get it ...
p.s: We handle around 8000 orders per week, so maybe for a small shop PayPal is the right solution since merchants doesnt want to invest a lot, but for a professional merchants then having more then 1 payment solution is defintely the way to go.
Posted 03 June 2012 - 09:49 PM
Posted 04 June 2012 - 06:19 PM
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