Does PayPal makes a difference?

[rodolfo]

HI there, I was recently making some figures and I notice that my current payment setup is cutting way to much. Since I'm not in the US all my sales have the 3.9% + fixed fee on PayPal.

I must say that I use PayPal because is the most used payment service but I actually think that is pretty bad. I believe that anyone who have a business and use PayPal can told you a bad experience (not yet? just wait) with them, from chargebacks, "unauthorized" payments to problems to withdraw the money (only for non-us residents or countries where they only offer send a check).

Thing is that I've contacted Skrill and they have almost everything I need and in my operation the final cost will be just 9.5%, way less than the 15.5% that I've to pay with the PayPal and Payoneer combo.

My main concern is... This will affect my sales? I mean, I don't want to offer PayPal at all and not only for this high % but because the unauthorized or anti-fraud system is a joke and anyone can rip-off them, mostly of them I know that are scamming but paypal doesn't protect the digital goods at all (to be fair, no payment system does). I know that this is pretty bad but I'm seeing this every week, I see how large sites are not longer using PayPal for chargebacks and similar issues. I know that other payment methods have this same pitfalls but at least I won't pay 15.5% for that.

Do you think that taking into account the nature of my product (software license) people will really run away and get something that accepts PayPal? My customers are atleast people who can get a domain name and get a hosting account, they aren't newbies.

Hope you can share your thoughts.

rodolfo Reviewed by rodolfo on 24th Aug 2012. Does PayPal makes a difference? HI there, I was recently making some figures and I notice that my current payment setup is cutting way to much. Since I'm not in the US all my sales have the 3.9% + fixed fee on PayPal. I must say that I use PayPal because is the most used payment service but I actually think that is pretty bad. I believe that anyone who have a business and use PayPal can told you a bad experience (not yet? just wait) with them, from chargebacks, "unauthorized" payments to problems to withdraw the money Rating: 5

[FShoppe]

I think we can all agree that Paypal is an 'EVIL' company out to get your money and provide virtually no protection. That being said, we, as merchant have very little choice as to NOT offer Paypal as a method of accepting payment is to shut out a large number of customers, or at least deter them due to buyers preference to use Paypal.

Also, I can only imagine you must pay 15.5% because of your own poor setup of withdrawing money.

As a user of Paypal myself, I truly limit my cost to their 3.9% + minimum fee as I withdraw to my own bank account, which are free!

FYI, I am not a US citizen/resident so it is not for this reason I can limit my costs. Bank withdrawals are free to most developed countries.

Therefore, using Paypal is no more expensive than using any other gateway in terms of transaction fees. So the only issue is that they are a crap company who care not for your losses and take every opportunity they can to squeeze as much profit out of your account as possible.

There are some gateways that protect you from charge backs but they are much less used than Paypal, and can often cost more as a percentage of your transaction.

Personally, I am biased towards a new payment gateway (I've already made 2 posts about it on this forum, so I'm not going to mention their name here, in case someone thinks I'm trying to advertise them ) and really hope it becomes a true alternative to Paypal. I really LOATH paypal but at the same time, need their users to continue doing business successfully.

[rodolfo]

Sadly PayPal doesn't have withdraw to bank account in my country, that's why I use Payoneer and the high fee comes from this guys. I can still use the check and the % is near 10% final.

Thing is that I want to now if PayPal is delivering more clients or not. PayPal use to say "you will increase 14% your sales", that could be true years ago but I don't believe that is the case today.

[FShoppe]

Hi Rodolfo,

What country are you located in? What couintry is you Paypal account registered to? What is your typical withdrawal amount and are you paying payoneer a fee or a percentage?

[rodolfo]

Check your PM

[CJ]

well paypal is still number one preferred payment processor, I wouldn't recommend you removing paypal from payment option ever. I know paypal is an evil company as said by FShoppe but still people prefer it over any other payment processor coz its too easy to refill balance or withdraw using PP than any other payment processors.

[rodolfo]

Yeah, thought so. The other payment methods are still far away from PP.

[mathv]

Paypal should be avoided for any website that generates alot of revenues. Whenever you break the 200k barrier, they will freeze everything ask for 10 000 papers, put a hold on funds with a rolling reserve. It's all a question of risk for them . However when you have to pay providers etc . and all your money is holded in Paypal you are risking bankruptcy.

Paypal is good for the little transfers, 1k and under, thats all.

Anyone making serious business need a real merchant account.