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 Should I use PayPal to Accept Credit Cards Online?

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Number of posts : 1850
Age : 55
Registration date : 2008-03-08

PostSubject: Should I use PayPal to Accept Credit Cards Online?   Sun 6 Apr - 13:57

Let’s begin by first stating that PayPal is not a bank and does not provide its merchants with a Real Merchant Account. PayPal provides its merchants with a PayPal account.

There is a Very Big Difference.

With a Real Merchant Account, your funds are deposited into your personal or business bank account, which you control and which is also protected by Federal Banking Regulations.

With PayPal, your money is deposited into a PayPal Account, which PayPal Fully Controls.

Since PayPal is NOT a bank, they do not need to follow federal banking regulations. These regulations are in place to help the “Average Joe” avoid issues like having their bank account frozen for 6 months with no explanation…(Imagine if your bank was permitted to do that!)

Because PayPal is not regulated in the same way as a Real Merchant Account, Paypal accounts are frozen for almost anything and without warning. The account can usually receive money while it is frozen, but it certainly cannot withdrawal money. Once an account is frozen, the funds are often held by PayPal for months on end with Absolutely No Recourse for the merchant.

Since the launch of Google Checkout, small online retailers sometimes wonder which service is better: Paypal or Google Checkout. Here’s a listing of some of their differences:

1. Why Choose Paypal? Paypal is more flexible than Google Checkout. Sales can be processed online by the customer, but sales can also be processed by the retailer through a “virtual terminal.” Google Checkout does not currently offer a virtual terminal. This flexibility comes with a price though: Paypal is more expensive than Google Checkout.

2. Why Choose Google Checkout? Google Checkout is less expensive than Paypal - Google Checkout currently offers free credit card processing through the end of 2007. The fees for merchant services add up quickly. Google knows this, and is trying to quickly earn a large share of the pie by offering free merchant services.

Google Checkout is designed for retailers who sell strictly online and do not need to process credit card payments in some other manner, such as over the phone, since no virtual terminal is offered as of this writing.

3. Problems with Google Checkout. Google Checkout has had it’s share of problems. A quick internet search using the terms Problems with Google Checkout yields blog posts and miscellaneous articles where people describe the problems they’ve had with the new service. A search using Google’s own “News Search” service currently yields several articles describing problems with Google Checkout.

4. Problems with Paypal. The same can be said of Paypal! Internet searches and news searches using the terms Problems with Paypal also yield blog posts, miscellaneous articles, and news articles describing the various problems people have had using Paypal’s service.

5. Final Thoughts. Don’t rush into making a decision about either service. They are different and service different needs. Do your homework - search the internet for rate information, problems, and benefits to each service. Make an informed choice, and your business will be more profitable and smoother running for doing so!
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