PayPal vs Merchant Accounts

Many online businesses are having the "PayPal vs merchant accounts" conversation right now. It can be difficult to decide which payment method is going to be the most beneficial for your business. The good news is that both payment types allow you to expand your sales across the web, and that is the ultimate goal of most online operations.

Still, you want to ensure that you're doing what's best for your own business, and that may require doing a bit of a PayPal vs merchant accounts analysis.

Think about the Fees

Most often, the case of PayPal vs Merchant Accounts is tried in the court of "Fees Paid." We are all in business to make money. As the old adage goes, however, you have to spend money to make money. This is really obvious when you find that you must pay a fee just to accept payments.

There is no cut-and-dried answer for whether a merchant account or PayPal is the best for every type of business. Instead, it is up to you to get as much information as possible to answer the question for yourself. Some of the main points that should be considered include the fees each charges for a single transaction, setup fees, annual fees, and the overall percentage of each sale that is withheld by the provider.

Keep Convenience in Mind

Another point to consider when debating PayPal vs merchant accounts is how easy the shopping experience is for your customers. While many people are comfortable using PayPal, that is not the case for all consumers. Many find it inconvenient to have to navigate among various sites in order to transfer funds from their PayPal accounts. Additionally, they may resent having to go create a PayPal account of their own. If they're resistant to this action, then you are simply not going to get the sale without offering an alternate payment method.

On the other hand, most of us are used to using our credit or debit cards. As long as the process is secure, it is quite easy to simply type in a few numbers and click "enter". Of course, the customers' convenience is of utmost importance, but don't forget to take your own convenience into consideration, either. It may turn out that one option is significantly easier for you to utilize or track.

Appearances Matter

There is also the matter of trustworthiness or the appearance of trustworthiness. The main credit card companies have spent billions of dollars to promote their brands. Businesses that accept Visa, MasterCard, Discover, American Express, etc. may indirectly receive some of the clout provided by those marketing efforts. In short, having a merchant account that accepts major credit cards can help legitimize a business.

Choosing whether or not to get a merchant account needs to be based on your business and what it needs. In some cases, simply using PayPal may be a good enough solution. On the other hand, there are times when not being able to accept credit cards is going to negatively impact your business. It is important to weigh out all of the pros and cons when considering PayPal vs. merchant accounts.