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Like this article? We recommend Examining PayPal's Payment Solutions

Examining PayPal's Payment Solutions

Six different solutions (in addition to PayPal's solutions for eBay sellers). Six different sets of features. Six different pricing schemes. Let's take a look at each.

Website Payments Standard

Website Payments Standard is the easiest way to add PayPal payments to your website. This solution is based on simple "buy now" buttons. All you need is a rudimentary knowledge of basic HTML to add these payment buttons to your web pages; customer checkout is processed on the PayPal site.

With Website Payments Standard, PayPal provides its own hosted shopping cart and checkout system. When a customer clicks the payment button on your site, he's taken to the checkout system on the PayPal site. To some degree, you can customize the checkout page that the customer sees, but PayPal handles the entire checkout process. The customer arranges payment on this checkout page and then is returned to a designated page on your site.

At the same time, PayPal notifies you of the purchase, typically via email. You can then print a packing slip or shipping label directly from your PayPal Account Overview page, or process the order and arrange shipping through your own systems.

As you can see, Website Payments Standard is a total backend solution for merchants of any size, but especially valuable to smaller retailers. There is no setup fee for this service and no ongoing monthly fee. All you pay are the normal PayPal transaction fees (from 2.2% to 2.9% of the total amount charged, plus $0.30 per transaction).

Website Payments Pro

While Website Payments Standard is a great solution for many merchants, it relies on PayPal for the shopping cart and checkout process[md]and during this process, transfers your customers to the PayPal site. If you'd rather host your own shopping cart and checkout system on your website, you can opt for PayPal's Website Payments Pro service.

Website Payments Pro provides both a merchant account and a processing gateway to those retailers that already have an established shopping cart system. Thus, it isn't quite as easy to implement as the Standard service, and it also comes with a fixed monthly fee. With this solution, you tie your site into the PayPal site using the PayPal API, which requires some technical expertise. (Unless you use a third-party shopping cart that automatically ties into Website Payments Pro[md]which many do.)

With Website Payments Pro, you can accept payments via credit card, debit card, or PayPal account directly on your website. This is done via two separate but related PayPal payment solutions:

  • Direct Payment. Accepts credit/debit card payments.
  • Express Checkout. Accepts payments from customers with PayPal accounts.

In addition to these payment processing features, you get a number of solutions and tools, including recurring billing, Virtual Terminal (accepts phone, fax, and mail payments), the ability to accept international transactions, a variety of shipping tools (including the ability to print shipping labels with prepaid postage), a set of useful reports, PayPal's Seller Protection Policy, automatic fraud screening, and advanced fraud-management filters.

There's no setup charge for Website Payments Pro, but you pay an ongoing $30 monthly fee in addition to PayPal's normal transaction fees.

Payflow Link Gateway and Payflow Pro Gateway

If you're a larger retailer with your own merchant account, check out PayPal's Payflow Gateway services. These solutions are particularly useful for traditional bricks-and-mortar retailers who want to add eCommerce sales to their mix.

PayPal's Payflow Gateway solutions connect your site to any major credit card processor or bank, adding PayPal as an auxiliary payment option. As such, these solutions are ideal for merchants who want to manage their own customer payments (except for credit card processing) and keep customers on the merchant's site throughout the checkout process. You use your own checkout system and your existing merchant account to accept customer payments; payment information is sent via the gateway to PayPal for additional processing, transaction reporting, and other services.

You can add Express Checkout to Payflow to process transactions from PayPal users. That's a nice addition to standard credit and debit card payments.

Two different Payflow services are available:

  • Payflow Link Gateway is a more basic service with easier setup. It enables your customers to complete their transactions on customizable pages hosted by PayPal.
  • Payflow Pro Gateway is a full-blown, fully customizable gateway service. It enables customers to complete their transactions on your website, in a secure fashion.

Both solutions let you accept credit cards, debit cards, and (with the Express Checkout option) payments from PayPal accounts. Both solutions offer 128-bit SSL encryption, and both integrate with most third-party shopping carts.

PayPal's Gateway solutions have a much different cost structure than Website Payments Standard or Pro. You pay a one-time setup fee ($179 for the Link Gateway, $249 for the Pro Gateway), as well as a recurring monthly fee ($19.95 for Link, $59.95 for Pro). You then pay just $0.10 per transaction, with no percentage fees. On the plus side, you get 500 free transactions monthly with the Link Gateway and 1,000 free transactions with the Pro Gateway.

Express Checkout

If you already have a website with merchant account and checkout system set up, you can use PayPal's Express Checkout to add PayPal payments to your website. This is a great way to expand your customer base to those buyers who prefer to pay with their PayPal accounts, rather than entering credit card information with each purchase. You still accept credit and debit card payments as usual, but offer the "Checkout with PayPal" option for a more streamlined[md]and much quicker[md]checkout experience.

There is no setup fee to use this service, nor are any monthly fees charged. All you pay are the normal per-transaction PayPal fees[md]the same ones associated with PayPal's Website Payments accounts.

Virtual Terminal

If you have a direct mail or phone-based business, or you want to add phone or mail sales to your online store, PayPal's Virtual Terminal is the solution for you. It's essentially an online version of a traditional credit card swipe machine, so you can process all those phone, fax, and mail orders via your existing computer system.

With Virtual Terminal, you don't have to purchase or rent any new hardware or install any new software; it's all web-based, which means that you can use it on any computer or mobile device connected to the Internet. To process an order, just log into the Virtual Terminal application on the PayPal website, enter information about the order (including credit card information), and you're done. PayPal handles all the processing and transfers the appropriate funds into your PayPal account.

PayPal's Virtual Terminal is an affordable alternative to those old-fashioned (and expensive) swipe machines. There's no setup charge, and you pay a low $30 monthly usage fee. (This fee is waived if you use Virtual Terminal along with Website Payments Pro.) Transaction fees run from 2.4% to 3.1%, plus $0.30 per transaction, depending on your monthly sales volume.

Online Invoicing

Finally, we have PayPal's email payments solution, dubbed Online Invoicing. This solution lets you email invoices to your customers and then accept secure online payments. It's ideal for B2B companies, or for online retailers who bill their customers on a regular basis for products or services sold.

To use Online Invoicing, you create an invoice via PayPal, or you add a PayPal button to invoices created via QuickBooks or Quicken. The invoice is sent to the customer via email. When the customer receives the invoice, he can pay via PayPal by clicking the appropriate button or link within the email invoice. Payment can be via credit card, bank account, or PayPal account, all processed by PayPal. When the payment is processed, PayPal notifies you and transfers the funds into your PayPal account.

Best of all, there are no setup or monthly fees associated with this solution. You pay only the normal PayPal transaction fees.

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