I used to have Paypal and ran into the usual paypal's policy of "screw the merchant" philosophy, got tired of dealing with the pinheads their and now with credit card processing on my online store. Last couple of months I am noticing, what is called the "interchange fee" of anywhere between 2% - 3% + 2% to my gateway company . I end up paying more with the regular card processing companies compared to what I was paying paypal, the variable 2.90% for merchants. Am I right? Read this piece on NYTimes Thanks
Eventhough their fees are high still people around the world prefer to use it just because it is widely used payment processor so no any other choice left for them DON.
This really depends on how your merchant account is setup. There are many interchange categories with a merchant account provider. These vary depending on the type of card being accepted, and the method the card is accepted. Paypal bundles these all categories into a single rate, which is usually much higher than your qualified merchant account rate, but doesn't have downgrade fees. Downgrades occur when you accept cards that fall into a higher interchange category than a standard credit card. Off the price topic, there are many shoppers online that will not use paypal. Paypal has some poor support, and other negative customer service issues that has led a decent number of people to refuse to use it completely. On the other hand, there are a number of people that prefer to use it, and it makes up a huge percentage of all online transactions. For this reason, I always suggest accepting credit cards through a merchant account, and adding paypal as an alternative payment method. This will cover both groups, and gives your customer the ability to chose how they want to pay.