I really cannot answer your question, I am using the regular business Paypal account. I have also setup my site with Authorize.net and BoA merchant account, transactions to the business account take not more than 2 business days, and I can use the virtual terminal on Authorize.net.
I really don't know how much Paypal will charge for setup and fees with a virtual terminal, but transactions to business account with Paypal take more than 2 business days.
I'd advise you to look at the Merchant processing function your own bank supplies, in all likelihood you'll get next business day deposits going through your own bank. Pay Pal can take in upwards of 3 business days depending on card and transaction type. So if cash flow is an issue for you like it is for most small businesses, then it makes sense to go with the solution that gets you your money the fastest.1 of 1 people found this helpful
I considered Virtual Terminal, but decided against it.
We have a handful of customers who prefer to register for seminars by phone rather than on-line. We also have a few government customers whose IT managers have firewalled PayPal (allegedly to stop government employees from on-line shopping during work hours), so those customers are denied access on their end to the merchant services portals. Using the PayPal Virtual Terminal would have allowed us to take the customer's information over the phone and complete the transaction as if we did a credit card swipe (without having to invest in a card swipe terminal and phone line).
In the end, I chose not to do that, because it meant me or my employees would have to take the customer's credit card number and other personal data -- and no matter what I do to ensure that we don't keep or misuse that info, if one of our customers had a problem, we would be suspect. I don't need that. I'd rather lose the sale or take a chance on a personal check than deal with that. I do not want to handle or be responsible for protecting a customer's credit card data -- period.
Use a real desktop based secure terminal instead. www.DTPCORP.com sells and supports a desktop software called EFT4Windows that is innovative and has worked for us for quite a while. it costs us way less that paypal because they charge flat fees instead of a % like paypal
I have PayPal Virtual Terminal and Bank Of America Processing.
There are pros and cons of each.
Everything that I do is over the phone or internet so your situation might be different if you are processing sales face to face.
-Next day funding
-Goes directly into your bank account
-For over the phone or internet sales you are usually paying 3-3.5% no matter what intro rate they tell you (mine is a 2.12% but it gets bumped because it is not face to face).
-Initially only accept Visa and Mstrcrd, then you have to set up woth Discover and Amex seperately.
-You have to have some sort of terminal (ICVerify, an actual terminal etc.)
-$9.95 a month
PayPal Virtual Terminal
-Goes into your Paypal account and then it is a 2-3 day wait after you request the money to go into your bank account.
--3.1% intro rate (across the board) for the first 90 days, then it goes to 3.1% for sales between 0-$3k after another application 2.7% for sales 3-10k and 2.4% for sales 10k+ and it is based on the sales of your previous month.
-They are expecting you to do over the phone or web sales so there is no penalty.
-Accept Amex, Visa, Mstrcrd, and Discover for the same rate.
-$30 a month
-No terminal needed.
Hope this helps.
There are LOTS of differences between a 'traditional' merchant account and PayPal beyond the ones that Bob just outlined. And the differences go way beyond fees charged.
- With a real merchant account, your funds are directly deposited into your \\ personal or business bank account, which YOU control and which is also \\ protected by Federal Banking Regulations.
- With PayPal, your money is deposited into a PayPal Account, which PayPal \\ fully controls. Since PayPal is NOT a bank, they do not need to follow federal \\ banking regulations. These regulations are designed to help the "Average Joe" \\ avoid issues like having their bank account frozen for weeks or months with no \\ explanation.
Unfortunately for many merchants, Paypal routinely freezes its
customers' accounts for almost anything and without warning. Once an account is
frozen, the funds are often held by PayPal for months on end with absolutely no
recourse for the merchant. This is not to say this never happens with a 'real'
merchant account...to be sure it can and does under certain extreme conditions.
But, due to reasons cited above, the frequency of this with traditional merchant
accounts is nowhere near the frequency with PayPal and other 'alternative'
Paypal is useful as a temporary solution for mom-and-poppers, merchants who process VERY small volumes or just need processing capability once every few weeks or months, people who don't qualify for a traditional merchant account, or whatever. If you are an on-going business with consistent need for processing, do yourself a favor and forget Paypal, go out and get yourself a real merchant account.
We used PayPal terminal for a while along with the PayPal Pro API. It's ok. I discontinued using it in favor of Authorize.net. The reason why is that I found it too time consuming to keep transferring funds from PayPal to my OpEx account. With Authorize.net, funds are deposited right into my AR account and it saves me time.
Good luck and Happy Holidays!
Rich Petrelli, VP
We use paypal virtual terminal. At 2.2% it is not a bad place to start, but companies like Costco are offering 1.98%. The terminal works great, and I am not worried about the 2-3 days to transfer into my account. Reason is that I use the money right away to pay my vendors using the paypal debit card, and get 1.5% cash back.
I can tell you that my biggest gripe with their CC terminal is, that unless you absolutely know your customers, you will have a high chance of charge back. Paypal doesn't protect merchants as well as people might think, despite all of their "merchant protection" programs. I haven't seen a situation where the "protection" did not result in money taken away.
If you take paypal virtual terminal, it can lower tha rates drastically on Amex cards you collect. You pay 2.2% to charge a Amex card, which is super low. BUT, Amex is NOTORIOUS for taking merchant's money away BEFORE finding out the complete story, and EVEN AFTER you provide them with documentation (signatures, proof of delivery, etc). So, I have an internal policy to turn customers away from Amex card unless it is a long time wholesale customer. We just tel lthem Paypal only takes Visa/Mastercard :)
So yes, accepting paypal is like playing with fire, just don't get burned. I've been burned myself, had other people get burned, but I'm back for more lol.
I've had no complaints about paypal.. Its nice to be able to access it online as well as integrate easily is MS Small Business Accounting as the default processor.
I do a huge amount through paypal and its always on and always available and a decent rate with any decent amount of charges.
As for the payment delays, it does take 2-3 days to withdraw but i do a withdrawl everyday so its only an issue the first time. I also use the 1% cash back card to pay for stuff that helps lower my fees even more and the money market account is nice to have.
I have recommended paypal for speed, ease and low cost to get started.
The money is available immediately on a debit card and in a few days to send to your bank account.
Please see my post of Oct 18th (above). No arguement about the positive sides of Paypay you mention.
However, there are serious downsides as well which it is a mistake to gloss over. Paypal is a very good alternative for SOME merchants,but not for ALL merchants. And Paypal is a good alternative to a traditional merchant account for SOME people, but by no means to ALL people.
Having had both, I would say that they both have their downsides as you stated.
Stay away from Paypal Virtual Terminal. It adds nothing but convience with lots of fees and is smoke and mirrors when it comes to offering a real credit acepting service. You basically get charged monthly $30.00 for the exact same free service you already have but with the convience of having a creditbilling form instead of coding your own or using the traditional methods (Pay now Button). What you may also find as a real blow to small business is that PayPal imposes a %30 reservoir for 90 Days killing any chance for profit or even demands you keep a limit in the account once you upgrade to VT. Reservoir and a Monthly fee wow not to mention you still have to enter the billing address info despite when doing research on VT it appears to allow you to just enter the credit number.
VT works exactly like the Paypal Buttons except you get a special link within the paypal overview page that takes you to VT which is nothing more than a short form exactly the same as if you invoiced someone or your self. So Paypal is ok for basic services but VT is definitely a money grab scheme to lure small business into being in dept to Paypal.
Every business needs a way of covering its costs so in my opinion Paypal is no different.
I wouldn't call it a scheme its just an added feature to ease the shopping experience which costs the small business owner a couple of dollars.
Perhaps an easier argument. VT cost 30 a month and offers no extra features besides a simple html form and gives you the option of typing in a phone number and e-mail instead of making it a requirment. Stick to your paypal "buy it now" buttons. Gets the job done in the same amount of time without having to pay a monthly fee and loan your money with no interest payed back from Paypal.
So why try VT? I felt VT despite the small monthly charge; seemed very convenient and being a customer for close to 10 years. I really felt VT would help my small business; in fact it offered the exact same service I was already using except it cost money now and my funds were subject to being held for 90 days.
VT also subjects you to an additional tier of security in which paypal feels they need 30% of your funds on top of the monthly charge for who knows what plus the additional fees charged per transaction that is more than enough to pay for servers and IT maintenance.
The bottomline is though; you are right by pointing out that every business needs to pay for their cost. But I feel the service as a sole entity is on review here. Not their spending practices; which I'm sure is questionable from a morale point of view. With that said if Paypal advertises VT as a Credit Merchant that will allow you to easily take credit payments then it should deliver something comparable to other credit merchants or better than the service they already offer.
Scavanger hunt: Find some VT advertising that shows where you still have to type in the billing address info and the 3 digit number.
Bumping this thread back tot he top to continue the conversation.