So it looks like high monthly volume and low transaction price is good for merchant accounts, otherwise PayPal gets the edge.
When to Use PayPal vs. Merchant Account
61–70 of 86 posts
Re: When to Use PayPal vs. Merchant Account
#62Square. Square. Square... Did I mention Square? http://www.sqaureup.com My life is much easier for sure. No Paypal Bulls*it.
If I ran a brick and mortar business, I could see how Square would be useful. But the source link and every discussion thread here are discussing e-commerce solutions, not Paypal's virtual terminal [1].
Re: When to Use PayPal vs. Merchant Account
#63Earlier quoted context omitted.
Do get back to us in about 6 months to let us know how your merchant account is performing in regard to chargebacks. In my experience, we never win with our merchant bank, yet almost always win with PayPal.
What sort of business are you in that you're fighting with your customers over chargebacks? Couldn't you interpret this as something being horribly broken with the way you handle refunds? If you're selling software, there's no reason you should ever have a chargeback happen against you. Just make sure your policy is to refund anybody for any reason at any time. I remember reading a JoelOnSoftware article where he tal…
You're either very lucky, haven't actually sold software/intangibles at volume before, or whatever you were selling had no value to the mass market. Other than those circumstances, you WILL be targeted by fraudsters, using stolen credit cards to purchase your wares. It's near impossible to detect them reliably up front, which is why most of PayPal's competitors went out of business a decade ago. The chargebacks are from fraud, not unhappy customers, and your refund policy is irrelevant to reducing them.
Re: When to Use PayPal vs. Merchant Account
#64Square. Square. Square... Did I mention Square? http://www.sqaureup.com My life is much easier for sure. No Paypal Bulls*it.
Have you seen http://feefighters.com/square-calculator ?
Square works great for some people (if you are swiping a card), it's pretty expensive, but really cool to not need a merchant account.
We're working on a new version of the square calculator, will post it on HN when we're done.
Also, the link is http://squareup.com (you have a small typo)
Re: When to Use PayPal vs. Merchant Account
#65According to this PayPal becomes more economical somewhere between the $15 and $30 mark. However, I am not sure my comfort level with PayPal increases with larger transactions. If I am dealing with larger sums of money I want access to live customer service people and the regulations that banks have to follow. I do not want random email support, weeks of poor communication, a company that has a history of complaints…
If you have a PayPal Business Account (which doesn't cost anything), you get the business support phone number. It's answered on the first ring by a real person.
I get payments daily from as little as $1.95 to as much as $3000, with volume in tens of thousands a month. I've never had my account frozen/limited/whatever or had any trouble getting in touch with support.
PayPal is also registered in all 50 states as various types of money transfer agent, and in several countries operates as a registered bank.
They're not perfect, but I don't find them worse than your typical bank, which has the same rules as PayPal for freezing accounts, holding funds after an account is closed, etc.
Re: When to Use PayPal vs. Merchant Account
#66Earlier quoted context omitted.
What sort of business are you in that you're fighting with your customers over chargebacks? Couldn't you interpret this as something being horribly broken with the way you handle refunds? If you're selling software, there's no reason you should ever have a chargeback happen against you. Just make sure your policy is to refund anybody for any reason at any time. I remember reading a JoelOnSoftware article where he tal…
"If you're selling software, there's no reason you should ever have a chargeback happen against you. Just make sure your policy is to refund anybody for any reason at any time. I remember reading a JoelOnSoftware article where he talked about running 4 years straight with zero chargebacks using a policy like that." This is a fairy story. We have a no questions asked 60 day full refund policy. We have at least one cha…
I've had 4000 sales now (crikey), and precisely one chargeback. You can make your own guesses about FC's volume over the interval at issue, but I find "no chargebacks in four years" entirely credible.
Re: When to Use PayPal vs. Merchant Account
#67Square. Square. Square... Did I mention Square? http://www.sqaureup.com My life is much easier for sure. No Paypal Bulls*it.
Paypal works for most of the world.
No US Only Bulls*it.
Re: When to Use PayPal vs. Merchant Account
#68It looks like for many businesses (including mine), the fee difference between PayPal and a merchant account is fairly small. Given that, what I really want is a service with:
1. a good API
2. good customer service
neither of which PayPal has in my opinion (we've used PayPal for over a year). PayPal's API works fine most of the time, but occasionally it returns a 500 HTTP error on a successful charge. This has caused several customer problems for us, and we've taken the ridiculous step of considering a 500 error a success and manually following up in those cases. We've pretty much given up on trying to work with their customer support, and are looking for alternatives. Anyone have recommendations on service with a great customer support?
Re: When to Use PayPal vs. Merchant Account
#69Earlier quoted context omitted.
"If you're selling software, there's no reason you should ever have a chargeback happen against you. Just make sure your policy is to refund anybody for any reason at any time. I remember reading a JoelOnSoftware article where he talked about running 4 years straight with zero chargebacks using a policy like that." This is a fairy story. We have a no questions asked 60 day full refund policy. We have at least one cha…
I've had 4000 sales now (crikey), and precisely one chargeback. You can make your own guesses about FC's volume over the interval at issue, but I find "no chargebacks in four years" entirely credible.
This may be an aspect of the audience more than the product category (software). Your audience is teachers, correct?
My audience is highly technical, and the particular segment is rife with piracy. Even though our product is 95+% Open Source (and so there is a free version that people can use to do nearly everything the commercial version does), we still have people who use stolen credit cards to order our products.
And, it may also be a factor of product pricing. Your products are under $100, right? Ours run from $149-$999.
Sounds like our sales volume is actually about the same as yours. Looking over the actual numbers, chargebacks are less than my initial estimate. More like once every 2-3 weeks, and sometimes we'll go a whole month or two between; but some months we'll see a rash of them. It averages out to a couple a month.
But, it's definitely something we deal with regularly. Are you doing anything in particular to prevent fraudulent orders, or is it just the nature of your customer base that it simply doesn't use stolen credit cards to buy software?
Also, how much of your business is international? We've found that 95% of our fraudulent orders are from overseas (but 50% of our legitimate orders are also from overseas, so we're not willing to make it difficult for those folks to buy from us).
Re: When to Use PayPal vs. Merchant Account
#70I like the site and think its helpful. I have to say it isn't for my case though. I'm using Paypal's website payments pro for my current app, and that comes with a monthly fee not factored here. Also when I looked at using a real merchant account, these fees vary greatly and no one I was looking at was as cheap as 1.8. All the merchants I looked at were more expensive than Paypal percentage wise. I also feel like thi…
Check out the gear thingy under the total volume slider that says "More options? We have some, try the comparison with Paypal Pro..." ;) Apparently, when you were looking for a merchant account, you weren't using FeeFighters to bid down your fees ;) or you would've gotten a better rate. Try us out!
Looks like I kinda missed the point.
Although I'm not planning on leaving paypal any time soon. Their fees are just simple. Merchant Accounts have so many different fees you have to keep track of, and on top of that you have gateway fees.