Paypal or Plastic?

[cavscout]

Lads and Ladies,

I'd like your input.

I'm curious how many people will only buy from a company that accepts credit cards versus one that only accepts Paypal or mailed payments.

I know the horror stories of Paypal, but facts are for a small business it's an affordable, easy and fairly secure way to perform transactions.

Credit cards are more comfortable to many but when dealing with "non-swipe" transactions (where you don't have the physical card) the rates can be quite high.

I'm trying to get a feel for how much business I might be loosing that I'm not aware of because I don't currently accept Cards. Will I see a reasonable increase in business if I begin taking Cards?

To date, I'm only aware of 1 person who has decided not to buy from me because of the lack of card processing.

Thanks for the feedback.

[Kilted KT]

honestly, with paypal offering the ability to use a credit card WITHOUT signing up for a paypal account, I feel that paypal is the way to go no matter what kind of transaction you are doing.

[MACKAY]

I actually prefere PayPal as I can control where and when the funds are used. I can point PP to my checking account, or to one of my credit cards depending on how I want to fund the payment.

In addition, the vendor never sees my Credit Card Number and other personal information. It is much more of a risk to give your actual CC number and other personal info to a person over the phone where it can get written down and lost/stolen/etc., or where a dishonest employee can get access to the information (not implying that you would do so).

I have used PP for a number of years, and in the early days there were problems such as multiple payments being made due to servers crashing then being rebooted, etc., but things are much more stable now.

The most common complaint I hear is about the fees and spending limits that PP has in their TOS.

Brian

[cavscout]

Why not do both? I know that there are many people refusing to use Pay Pals now, so having another way to get credit cards is good. However just havine a PayPals account doesn't cost anything, and if you access your own balance with by using their debit card, you get cash back.

This would be the plan, but before I sign on to commit to monthly minimums or transaction fees I'm trying to see if it will be worth the extra expense that I don't have now with Paypal.

I actually prefere PayPal as I can control where and when the funds are used. I can point PP to my checking account, or to one of my credit cards depending on how I want to fund the payment.

In addition, the vendor never sees my Credit Card Number and other personal information. It is much more of a risk to give your actual CC number and other personal info to a person over the phone where it can get written down and lost/stolen/etc., or where a dishonest employee can get access to the information (not implying that you would do so).

These were most of my concerns. I didn't want to be responsible for the security of someones card information and felt that customers would be more comforted to know there is a level of insulation between me and them.


For those who are answering Credit Card ONLY, I'm very interested in your concerns. If you wold expound on the issues so I may take them into consideration. Credit Cards are a step that WILL be made eventually, it's the feedback that will determine the time table for that

Thanks folks!

[Abax]

I don't like PayPal but will use it if there is no other alternative and I trust the seller. But even then, I treat the transaction like sending cash, with no chance of resolving a problem if I encounter one. PayPal strikes me as very much like the airlines: They sell you an expensive contract with robust protection for themselves and no avenue for a passenger to recover if the airline defaults. That stinks. I think PayPal has found a (temporary) way to skirt the protection federal law affords buyers in credit card transactions.

I don't like doing business this way, and I have not purchased items for which I only had a marginal desire or need when PayPal was the only way to pay . . . they just weren't worth the risk.

While traveling in Australia recently, I encountered a business practice that has yet to become very common in the United States. Vendors - in my case hoteliers and tour operators - would charge me the fee they paid to process a credit card transaction in addition to the cost of the goods and services. I was traveling and had better things to worry about, so I just blew it off. But back home, I REFUSE to do business with someone charging this separate fee. Merchants that accept credit cards are getting a lot of business precisely because the buyer can pay with a credit card. I don't think it's unreasonable for the buyer to demand the seller pay the credit card fee.

Wait . . . I can hear the howls of protest from merchants now. I am not laying out a logical business case for or against credit card fees and who should pay them. I'm just expressing my buyer's preference. I'd probably rationalize some entirely different opinion as a seller.

So the point of the [sale price + credit card fee] comment is this: If you plan to accept both PayPal and credit cards, roll the average cost of a sale (credit card fees + PayPal fees) into the price you charge. Don't break it out as a separate fee. If you charge a premium for me to use my credit card versus some other method of payment, I'll go elsewhere and probably never come back.

Is this an irrational position on my part? Absolutely. All logical arguments will be ignored . . . this isn't about logic.

Abax

[davedove]

While traveling in Australia recently, I encountered a business practice that has yet to become very common in the United States. Vendors - in my case hoteliers and tour operators - would charge me the fee they paid to process a credit card transaction in addition to the cost of the goods and services. I was traveling and had better things to worry about, so I just blew it off. But back home, I REFUSE to do business with someone charging this separate fee. Merchants that accept credit cards are getting a lot of business precisely because the buyer can pay with a credit card. I don't think it's unreasonable for the buyer to demand the seller pay the credit card fee.

Wait . . . I can hear the howls of protest from merchants now. I am not laying out a logical business case for or against credit card fees and who should pay them. I'm just expressing my buyer's preference. I'd probably rationalize some entirely different opinion as a seller.

So the point of the [sale price + credit card fee] comment is this: If you plan to accept both PayPal and credit cards, roll the average cost of a sale (credit card fees + PayPal fees) into the price you charge. Don't break it out as a separate fee. If you charge a premium for me to use my credit card versus some other method of payment, I'll go elsewhere and probably never come back.

Is this an irrational position on my part? Absolutely. All logical arguments will be ignored . . . this isn't about logic.

Abax

Most places consider this just another business expense. The loss of profit margin due to the fee is more than covered by the increase in total sales from accepting cards. Now, I'm sure for most companies this is factored into their prices, but the consumer doesn't see it. For most people, a cost hidden is a cost ignored. If you spell out the cost of the fee, consumers will protest.

Now, as to the question, I will purchase with either type of payment option. If I have a choice though, I prefer to use my card directly. Paypal just irritates me by constantly trying to get me to directly charge my bank account whenever I say I want to use my credit card. If I wanted to use my bank account, I WOULD HAVE SAID SO!!

[staticsan]

While traveling in Australia recently, I encountered a business practice that has yet to become very common in the United States. Vendors - in my case hoteliers and tour operators - would charge me the fee they paid to process a credit card transaction in addition to the cost of the goods and services....

It's only fairly recent - like in the last few years - that merchants were allowed to do this. For a long time, they weren't. Many still do not, but unsurprisingly, it's been the retailers on the thinnest margins who added it first.

Interestingly, it's having two effects. The first is to subtly encourage cash or EFT transactions (EFT charges are structured differently and merchants currently do not pass them on) rather than credit. The other thing is that it helps relieve the merchant burden of higher rate cards like AmEx and Diners Club. In fact, AmEx has been slowly losing merchants over the years because it's credit fee is higher than Visa or Mastercard. And now consumers directly know why.

Wade.

[Bob C]

honestly, with paypal offering the ability to use a credit card WITHOUT signing up for a paypal account, I feel that paypal is the way to go no matter what kind of transaction you are doing.

Agreed. I won't bother with a business that forces me to mail them a check. It doubles the transaction time, at least. There's mailing time, then the time they spend making sure your check clears. I understand why they do that, but I'm not wasting my time that way.

Can I interject here for a second? I am not sure, but I think I see a common issue here about paypal privacy with bank accounts, and vendors getting card info?

PayPal will allow your to use your credit card, free of charge, without an account, and without sending your info to the vendor.

It sounds like most people think that to use paypal you have to sign up and give them your banking info, when in fact you do not. I've used paypal for two years as my only means of payment, and a great many users who refuse to set up a paypal account have successfully transacted their purchases without an account using credit cards on Paypal.

This is good info. I have used my credit card for dozens of PayPal transactions and have never tied a bank account to PayPal. Never had any problems, either.

[Fearnest]

I like PayPal because I generally have a balance from my online business, so it's not as painful as having to pay the credit card bill later (and there's some protection to me as a buyer and as a seller if things go wrong). The protection is there for most credit cards, too - but as a buyer I don't have to give the online small business my card number, so I feel more secure going through the "blind" system of PayPal. (And I've only had one problem with my number escaping the system somehow, and PayPal made good on it to the tune of $999 USD.)

As a seller, I have to pay a premium to PayPal (as you know) to use their service, but it's worth it to me (and probably no worse than paying the vendor's fee to the credit card companies). AND this way I only pay one firm, not one to each "brand" of card I accept.

[arrogcow]

Why not do both? I know that there are many people refusing to use Pay Pals now, so having another way to get credit cards is good. However just havine a PayPals account doesn't cost anything, and if you access your own balance with by using their debit card, you get cash back.

Go for both.

Adam