This is everyone's curiosity—you must be wondering when Paypal is so cheap should I then consider 2CO as my payment gateway?
However this is not a simple answer even if you disregard the fact the with Paypal you can no longer receive payments from within India.
As to which is better, it depends on your audience. Are they tech-savvy? Are they likely to have Paypal accounts? Nothing turns people away more than having to fill out a registration form and verify their identity. That said, if you have more tech-savvy users, they may prefer using Paypal to a regular credit card processor (like 2CO) since they are more likely to already have Paypal accounts.
Paypal is actually owned by . At first glance, it appears as though Paypal is the superior option by far. Their low discount rate and transaction fees are unbeatable, and there is practically no entry barrier. You can open a Paypal account for free in a matter of minutes, and you can start accepting payments as soon as your details are verified. Creating a "Buy now" button is only click away. And for several small-time sellers and internet entrepreneurs, Paypal will do the trick just fine.
2CO is a credit card processor (in truth an Authorized Reseller). Paypal is an online payment system. They have similarities (both accept credit card payments, both have recurring payment facilities) but Paypal is not a credit card processor in the traditional sense. I look at 2CO as one step below a business/merchant account, whereas Paypal is more like a bank account.
With 2CO you can't collect credit card information at your site since with 2CO you are only a authorized reseller and not a merchant as in Paypal which is not allowed by the US Card Association. With Paypal Express Checkout you can collect card information without taking the customer to Paypal site.
Paypal’s TDR ranges from 2.4% –3.4% (plus $.30). While 2CO’s TDR is flat 5.5% plus $.45 for each transaction which is costlier than that of Paypal.
Paypal has strong trust in people's mind and 220 million account holders( that is credit card holders plus merchants) means image of trust and security built in.
Single most important reason for Indian websites to go for 2CO will be that 2CO allows your customers to pay Indian Rupees, while in case of Paypal your customer will be shown amount in US Dollars before being debited for his/her credit card. Seeing amount in USD is most unsettling for any common Indian buyer at your site. It may be cause of alarm too. This must be the reason why EBAY no longer provides Paypal as payment option.
Paypal Website Standard Payment package which most likely you'll be going to use is not customer friendly. When clicking "Buy" button the customer will be taken to a screen which most likely will confuse an ordinary buyer not having account with Paypal.
The screen on left bottom may have a link to continue with credit card payment in case the customer does not have Paypal account. While on the right side Paypal login will be shown. This part is very confusing. There is no guaranty that the link will be shown on the left side. Paypal will occasionally force customers to create a login and then only make the payment. This is the most annoying part for the customer, to spend another 10 minutes in creating a login with all correct details.
2CO’s shopping cart is better than that of Paypal
Paypal has been known to shoot first and ask questions later – meaning that even if one of their employees “thinks” that you're somehow violating their terms of service – some of which are easy to miss (like selling an opportunity, for example) – then your account can be shut down and funds frozen without any warning whatsoever.
Customer service of 2CO is much better than that of Paypal. 2CO provides chat customer support too which has lightning fast response which Paypal completely lacks. Being very large organization and also providing free payment gateway to all and sundry means Paypal is compromising quality in some other aspects.
You can create a "Buy Now" payment gateway button, with minimum clicks even without creating your merchant account in Paypal, this for surely must be a marketing gimmick to soothe impatient human beings like us.
In doing so the naive guy does not know that Paypal has not asked you your website selling–Terms & Conditions. Now in case of chargeback requests by any of your customer you'll be left gasping when you come to know that your account was frozen for some reason. Now you'll need to wait for 72 hours to get their response. You saved $49 in case going to Paypal but problems later will cause wasted time and effort greater than or equal to $49. Add to this, we've found many technical queries answered by Paypal seem to be from a Robot( or a computer program) ranting about it's rules and regulations.
While in case of 2CO they charge $49, and it is reasonable, it costs their team verify your credentials, risk assessment and terms & conditions and warns you before you get into problems later.
If you're particularly skilled at marketing, and if you generate a large number of sales during some sort of launch – don't be surprised if your account gets “red-flagged”, frozen and audited by Paypal. Again, this happens without warning.
Paypal does not allow access to the credit card number of the customer, nor do any other service bureaus. That means when you're running a large scale venture, you'll want to access customer credit card numbers yourself for your inventory, refunds and statistics etc.
One thing is glaring with 2Checkout that most of the customers are very satisfied with their quality of service which is not so with Paypal, also given huge quantity of users using them and giving customer care to large group will be difficult, more so when anybody can open Merchant account with Paypal freely.
Read more about Paypal Pricing here. Have a look at some of international payment gateways including Paypal here. Or check all the articles about International Payment Gateways here.
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