I’ve owned a couple of ecommerce stores for several years. I chose Paypal years ago when the store first started. It was just a ‘buy now’ button. Then it became a full fledged store, and I upgraded from regular paypal to Paypal Payments Pro. With Volusion, I bought the Volusion branded security certificate and used in the integrated Paypal checkout. This means customers would pay with a credit card just like on any other web site. Shoppers normally never know who a company’s processor is. They just get a receipt from the business they bought from. I also kept the Paypal option. This means a customer could also check out with Paypal.
In 2008, Paypal raised their monthly fee to $30, and rates went up as well. When I started I was at 2% flat rate every transaction. As everyone knows, Visa & MasterCard charge many rates, so the processor that offers one rate needs to charge enough to cover all the different rates for fees they will actually incur. Their hard cost. My stores are B2B. The average corporate card is 2.2%. Paypal was losing money on me. The rate structure has now changed. When you look at the rates, you’d have to be pretty saavy to understand the rates now.
Did you see the “Merchant Rate qualification required”. They do not answer the question what it takes to be qualified. They do not answer what your costs are if not qualified. As I recall, this is now in the fine print, but only after you sign up. My costs escalated so that my effective rate was 3.75% when last checked.
Not posting all rates and the details until after you fill out online forms is very common. Most businesses do not have the knowledge to know what questions to ask.
In conclusion, I recommend Paypal to businesses that are just starting out, but after you’ve been in business for at least 2 years, or have at least $100,000 in annual processing, you’ll want to start looking for other options. Our own minimums for doing business are much higher, and we welcome you to read our blog for lots of tips.
One last note: You can find lots of negative information about Paypal. If you run an honest successful business, I can’t imagine you ever having a problem. I never did. If you run a consumer site and have lots of chargebacks maybe you should look somewhere else, but whatever you do, make sure you are not locked into a long term contract.