Having been involved with online payment processing since...well, since there was online payment processing, I think I can address that:
Credit card security compliance when doing online payment processing is frequently handled poorly, resulting in all those news reports about 400 trillion peoples credit card info being stolen from the local hot dog vendor etc. That is the basis for paypal’s existence: they really are secure, they will refund the buyers money if the transaction goes bad. Many people refuse to pay with anything but paypal. That is their choice, but it does encourage vendors to add paypal. I myself went out and got one of thosereloadable pre-paid mastercards, which I use for all small online purchases. If someone steals that account info they have access to about $50. But, Robert is correct that paypal’s fees are somewhat higher than regular credit card processing – although with any volume it does come down to a pretty small delta. Also, there is a fixe dmonthly cost to have a vendors paypal account – miniscule once volume is up, but significant in these early months. I would point out that you actually have to look at a full month’s credit card processing statement to verify what you are really paying for credit card fees. Most vendors make these choices based on the “discount rate” they were told they are paying – likely around 2.3 to 2.5% for the source. But, what they do not mention clearly is that when the buyer uses a “rewards card” that gives him cash back, those funds actually come from the seller, in the form of much higher discount rate – as much as 5%. So – the source may already have done this, but it might be worth while comparing actual cost (by dividing total fees by total sales) to the paypal fees. You may be surprised. In my case, I thought I was paying 2.3% but actual average fee was 3.4%. On $200K in sales per month, that adds up! When I added paypal as an additional payment type, it was actually at a slightly lower cost than my regular CC processing, which I would not have predicted. Another possible suggestion for the future might be to add the ability to “add funds to my account”. i.e. put in $25, then make purchases against that balance. Means some additional programming, but it also reduces total fees, which helps when you are doing “micro payment” processing. John Scully Robert said: This is interesting. --Here we have a purchaser who wants to buy some files. --The files are available for sale. --The purchaser is satisfied with the price. --The purchaser has a credit card that is accepted by the online store. --The purchaser has been willing to provide his card information to at least online vendor. BUT --He feels that because he has given his card information to a completely different vendor that has nothing to do with the vendor he is shopping at, that should somehow suffice for this vendor. Where does this logical progression come from?
