As any new website owner can tell you, getting all the nuts and bolts of an e-commerce site worked out can be a lot of work. When you sell online, one of the most important things you'll need to work out is your payment methods - what system you will use to process the transactions that go through your shopping cart. If you’re accepting payments directly through the website and you’re in Australia, you have two main options: a Payment Gateway/ Internet Merchant Facility combo or PayPal.
Using an internet merchant facility and payment gateway to accept credit cards is the most professional-looking payment option you can have on your website. Particularly if your business is new online, building consumer confidence should be high on your list of web priorities. You want the buying process to be as smooth as possible. In addition to making sure your customers know that your business is trustworthy, one of the biggest perks of setting up an internet merchant facility is that the money from your sales will be deposited directly into your bank without delay.
Setting up an internet merchant facility and payment gateway has its price, however. Many business owners who are starting out online will seek out alternatives for payment methods to avoid these upfront costs, leading many new website owners to PayPal.
Similarly to payment gateways, PayPal is able to process credit card transactions for you - except in most cases it takes the user away from your website to do so. A PayPal business account is free to set up; you’ll pay only a small fee per transaction. If you’re in a rush to get started, PayPal can also be set up in just a few days. It is a well-recognised payment method and generally trusted by most online shoppers.
However, PayPal isn’t the perfect payment method for every e-commerce website. Many consumers perceive PayPal as a “cheap” feature - if you’ve just invested in a new website, do you really want your customers to look at your business as having cheap fixtures?
An important thing to know about PayPal is that it is not a bank. PayPal is not required to follow the same rules that banks need to follow, and sometimes problems do occur. At the slightest provocation, PayPal has the right to freeze your account, meaning you might not be able to accept payments and the funds in your account would be made unavailable, sometimes up to 6 months. This is not a rare occurance - it has happened to our clients and many others, and it is not a pleasant experience. (Read about one notorious instance when PayPal ruined a Christmas charity.)