PayPal vs Merchant Account

**jeb** · 09 May 2011, 08:27 PM

Pros and Cons?

If merchant account, which do you recommend?

- jb

**ckh** · 10 May 2011, 12:26 AM

I've been using PayPal for 5 or so years and have never had a problem with them. I do a minimum of $3k in sales a month with them. There's no monthly fee and their rates are competitive with a merchant account. I have a PayPal mastercard/debit card which I can use anywhere MC is accepted and the cost is debited directly from my account and I'll receive an email almost immediately about the purchase. I also have their security key. What happens is when you log in, it prompts you for the number generated by their security key. This is added protection in case your login is ever compromised, they'll need your security key to log in. Been using that since they came out with it as I generally have a good chunk of money in my account at all times, plus the PayPal account is linked to my bank account. Transfers to/from your bank account are free.

I know some people have had problems with PayPal, but, I'm a happy camper with them and have had very few complaints filed by clients and I'm generally proactive on complaints. Most of my complaints are from people that have had their accounts compromised and I'll just refund the purchase when I find out about it, which haven't been that often, maybe one or two a year. If you are working with a client on a design, etc, I doubt you'll have to worry about that, generally it's just purchases that the public can make where the item is then immediately available.

authorize.net is a popular merchant account that I know some of my clients use for processing credit cards. They've been around for ages. Couldn't say much more about them positive or negative.

**jeb** · 10 May 2011, 03:35 AM

Tks, Chris - appreciate the reply. - jb

**michellelinzi** · 11 May 2011, 01:10 PM

Goto vendio.com. They are a great free cart site that works with auth.net or paypal

**jeb** · 12 May 2011, 02:25 PM

Tks, Michell - didn't see anything about merchant accounts but sent them an email. - jb

**mindseye** · 13 May 2011, 08:39 PM

I have been using Paypal since they started and just recently received my first dispute. I do quite a few things on-line but the primary is web and graphic design.

I won't go into details about the dispute, but I can state the difference between Paypal and a Merchant Account as I have a ticket event site as well using a Merchant Account.

When things go bad on Paypal, the buyer is always right unless you "the seller" can supply SOLID proof otherwise. They will deduct the funds from your account immediately after the dispute is submitted and reviewed.

I had a contract in place stating "Once the client approves the proposal and work begins, there will be no refunds of the initial deposit(s)". I am still fighting to get my money back even after the customer has dropped the dispute. The problem actually is that the client reversed with their CC company and it's become a looong drawn out process going into 40 days now.

I am now going to handle all deposits and payments thru my Merchant Account. I have had a couple of bogus charge backs from the ticketing site, after a show is done and over, people will try and refund the purchase.

The company I use will not deduct from my account(s) until they investigate the charge back. It's like they are looking out for me instead of the other way around, plus they have some of the best % rates around, as well, the support is fast and friendly..

You might check them out.

USAepay:
http://www.usaepay.com

Best of luck.

**ckh** · 14 May 2011, 01:09 AM

If the product is a digital or intangible, mention that in the dispute and PayPal will side with you, at least in the US. There isn't any seller protection for digital/intangible products. I've won a couple disputes just because I mentioned that.

I 'believe' this may not apply in the UK and possibly some other countries.

https://cms.paypal.com/us/cgi-bin/?c...e%20Protection

**jeb** · 14 May 2011, 03:12 AM

Received an email back from Vendio and they said they do not have merchant accounts but that you can put one on their site.

Mind, seems there is a ton of negative about PayPal concerning just what you have listed - merchants getting their funds frozen with effectively no recourse since PayPal are not a bank and have no regulation what so ever. - jb

**ckh** · 14 May 2011, 07:58 AM

Never had a problem myself with PayPal. I know some people that lost their PayPal account as they invested in some ponzi schemes or had more than 2 referral levels.

Stormpay was a major competitor with PayPal at one time but went out of business when they were heavily involved in payment transactions for a large ponzi scheme.