Reading posts on this site I came accross the strong advice for any serious business to stay away from Paypal as an instrument for accepting online payments. On the other hand lots and lots of online businesses use it.
What are pros and cons of Paypal as a payment gateway provider?
Pros = Easy of integration, PCI-compliance offloading, liability shifting, saner cashflow, no merchant account required
Cons = I have heard PayPal can (and do) lock accounts without warning, so regular 'emptying' is required. IMHO for high value items, it can look amateurish. However, PayPal can add integrity/security/peace-of-mind to smaller sites' customers.
I would also look into things like SagePay and their products, FastSpring or a new contender like BrainTree.
I have never heard good things from PayPal in terms of business users. They seem good at taking money off consumers but bad at giving it to businesses. I would look at the alternatives and try and find one with an SLA.
Depends very highly on the perceived quality, broadness or ambitions of your offerings. I would have no problem using PayPal for a niche e-commerce site selling something obscure, it is one of the few options they have. A larger (or trying to be) store with high quality web-design etch would raise an eyebrow about why they were using PayPal;
You can always change-as-you-grow if you build your setup in a modular way or use something like Magento that allows this. Good if you want to get cashflow going without the overheads of a highly integrated payment system.
If it were me, and I didn't have the option of a real MA then I wouldn't use PayPal, I have read far too many horror stories (but I am sure other payment service providers have them too). This answers.onstartups.com question seems to have a happy customer for Authorize.net
Pros = Brand familiarity and trust (Paypal explicit)
Con = High service fees. Also for anyone in the know a slight downgrading of your brand because of the amateurish nature of businesses that use Paypal over their own merchant processing system.
I've used Paypal for over 6 years in my last startup and used authorize.net as a standard credit card processor.
First, you need to understand that Paypal has two functions.
Paypal can be a pain.
- If you have to talk to them, prepare to stay on hold for a while
- Their policies are their policies. If you don't like them, tough.
- I've had problems with people trying to use a credit card that's also used by the person as their paypal account payment method, and paypal declining.
- Paypal itself has a limited number of countries it operates in. I think that if you use their credit card handling, that works fine.
Overall, I'd say that my experience with Paypal was similar to the one with Authorize.net.
I never had money arbitrarily withheld by papal, and their dispute resolution was, as a rule, reasonable.
I've heard good things about FastSpring from several people, but have never used them personally.
I used PayPal in the past, I've switched a few years ago and never looked back (to FastSpring that I am extremely happy with), here are my personal experiences:
I've also heard horror stories about PayPal freezing accounts without warning but that hasn't happened to me (fortunately).
On the other hand they have extremely low fees and are without a doubt the cheapest option for international money transfers