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When it comes to turning your website into a money-making business, PayPal is a popular choice for handling transactions. The service is known for being secure, convenient and fast — payments can show up in your account within minutes of a sale. But there are costs associated with using PayPal to process payments, so you’ll have to weigh the options to ensure you’re getting the best deal.
Here’s a breakdown of the company’s offerings to help you decide.
First you’ll have to choose between a business and a premier account. Both carry a standard fee for online payments and invoicing: 2.9% plus 30 cents per transaction within the U.S.
PayPal recommends a premier account for casual sellers — those who don’t rely on their site for a steady source of income and plan on purchasing as well as selling. To access this account type, you first have to get a business account and then downgrade to the premier account. The business account, on the other hand, requires you to operate under a company or group name.
Keep in mind that there are additional fees for each account type for things like chargebacks and refunds. And extras, like recurring billing, have costs associated with them as well.
After you’ve decided on an account type, you’ll need to compare PayPal’s payment and checkout products.
Additional costs (beyond the standard 2.9% plus 30 cents per transaction)
Quick setup, lets you accept credit cards, debit cards, PayPal, and PayPal Credit
From there you can add a Paypal.me link and invoices to your payment options, at no additional cost
Works with credit cards, PayPal Credit, and PayPal; has a virtual terminal option (to accept phone, fax and mail orders online); it’s also compatible with many existing checkout systems
$30 per month
Keeping the checkout process on your site (rather than directing buyers to PayPal’s site) and customizing the checkout experience
Works with many popular checkout systems
$5 per month
Housing the checkout process on your site, as long as you don’t need a virtual terminal (like the one offered in the Pro account)
Works with many popular checkout systems
Quick checkouts for sites that already accept credit cards
PayPal also has a partner service called Braintree that delivers a similar checkout experience to Payments Pro. It offers a standard checkout at no extra cost beyond PayPal’s basic transaction fees, with the option to upgrade to a higher-priced, but more customizable checkout service. If your customers prefer paying with virtual cash and accounts — think Apple Pay and Bitcoin — it’s your best bet.
Once you have a PayPal business or premier account, you’ll need to give customers access to your products. Depending on which service you select, you may need to insert a link to your PayPal account, add a contact form, insert a bit of code onto your website or create a button through PayPal’s site.
Read more about adding PayPal to your site here.
If you dislike the idea of paying fees or don’t want to use PayPal, there are alternatives that can get the job done.
If you already have a Google account, Google Wallet could be a solid option. There are no fees to send or receive money, but it’s only available for businesses that are sole proprietorships (rather than registered corporations). Otherwise, sites like Amazon Pay (which carries the same standard rate as PayPal for domestic transactions) and TransferWise (for international payments) are worth looking into.
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About the author: Devon Delfino is a former personal finance writer for NerdWallet. Her work has been featured by the Los Angeles Times, MarketWatch and Business Insider. Read more
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