Credit Card Processing vs Paypal – What is best for my business?
What to choose for your Business: Credit Card Processing vs. PayPal
Today with the advancement in the e-commerce sector, it has become a necessity for most businesses and holdings to venture into online payment methods. However, choosing the right gateway or payment method has been a very tough task as there are several payment platforms offering different services and rates. Here you will get some valuable information about credit card processing and one of the popular online payment gateways, PayPal.
What to consider when choosing
Is choosing between PayPal and other credit card processing platforms becoming a challenge to you? Perhaps you will be able to make a choice for your business after reading this. First, there are a variety of factors to consider such as security, the volume of transaction, transaction fees, and customer service, before settling for a payment method for your business.
When you consider security, credit card processing platforms will need the customers to enter their credentials to your site in the payment method form. This will need you to invest in a robust security system to store the sensitive data to avoid leakages. When using PayPal, you can rely on their security measure since the details entered are sent to their servers.
Volume of Transaction
PayPal is quite efficient in low volume processing, making it good especially for start-up businesses. It is also used by several people hence can help you serve several customers. It offers flexible credit card processing at a very cheap price for low volume sales. However, when a large transaction is involved, it may not be the best. You will need to choose other credit card processing methods.
Gateways and credit card processing method charge different fees such as monthly charges, percentage on transaction amounts, levies on chargebacks and international transfer among many others. PayPal charges a base fee of 2.9% and offers discounts with the increase in amount as from $5000 per month. The chargeback fee is $20, 3.5% for American Express, 1% for international cards and transaction fee (3%) for all refunds. This might be relatively cheaper when you consider monthly volume. For the credit card processing platforms, they also charge a monthly fee, a transaction fee which is around 2% (cheaper) of the amount you receive. Some will charge a set-up fee when joining for the first time.
Credit card processing allows you to receive, send money and make payments via a wide range of platforms both physically and online. The transaction is quite smooth between the major credit services worldwide. They offer a good platform for customers who do not like to make online transactions. PayPal on the other hand also allows payment via major credit card services. With PayPal you won’t need a merchant account to process credit cards; you can handle all the processing in your PayPal business account. It offers payment within one business day, unlike others that may take up to seven days.
Therefore you will need to make an evaluation of your business and compare it to the gateways and credit card processing platforms in order to choose a payment method that best serves your business interests.