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Is this because no one likes PayPal? Personally I've been screwed over by PayPal using Etsy when a seller didn't ship. It's since made me hesitant to buy anyt

Is this because no one likes PayPal? Personally I've been screwed over by PayPal using Etsy when a seller didn't ship. It's since made me hesitant to buy anything there.

lnanek 15y ago
PayPal charges more than working with credit card companies directly. I was talking to a guy who runs an app that sells music the other day, and he got a much better rate by cutting out the middle man (less than Etsy is charging, by the way). If you are running a startup, you probably shouldn't waste your limited implementation and support time with payment processing and all the customer issues that arise vs. just using a third party, though.
- dangrossman 15y ago
  > PayPal charges more than working with credit card companies directly You'd think so, but in the general case that's untrue. Most MOTO merchant accounts advertise better rates but the effective rate the merchants pay is more than PayPal's 1.9-2.9%. PayPal's rate is flat, but anywhere else it's not. Virtually all credit cards (all rewards/points/cashback cards, all business cards, etc) are downgraded to a higher fee schedule -- plus AVS fees, auth misuse fees, batch settlement fees, statement fees, customer service fees, PCI compliance fees (virtually everyone added at least $100 a year in PCI fees in the past 2 years), chargeback fees, etc. And these are all variable and will generally be raised, one piece at a time, every month you have your account open. I've worked with 3 direct merchant accounts and my effective rate is between 4% and 8% of transaction volume. At PayPal it's less than 4% including the fixed ($0.30) portion of the fee. A company with the expected volume of Etsy can probably negotiate a contract with fixed rates for some number of years, but the other 99% of small businesses accepting credit cards online (card-not-present transactions) are not beating PayPal's rates.

Is this because no one likes PayPal? Personally I've been screwed over by PayPal using Etsy when a seller didn't ship. It's since made me hesitant to buy anything there.

lnanek 15y ago

PayPal charges more than working with credit card companies directly. I was talking to a guy who runs an app that sells music the other day, and he got a much better rate by cutting out the middle man (less than Etsy is charging, by the way). If you are running a startup, you probably shouldn't waste your limited implementation and support time with payment processing and all the customer issues that arise vs. just using a third party, though.

dangrossman 15y ago
> PayPal charges more than working with credit card companies directly You'd think so, but in the general case that's untrue. Most MOTO merchant accounts advertise better rates but the effective rate the merchants pay is more than PayPal's 1.9-2.9%. PayPal's rate is flat, but anywhere else it's not. Virtually all credit cards (all rewards/points/cashback cards, all business cards, etc) are downgraded to a higher fee schedule -- plus AVS fees, auth misuse fees, batch settlement fees, statement fees, customer service fees, PCI compliance fees (virtually everyone added at least $100 a year in PCI fees in the past 2 years), chargeback fees, etc. And these are all variable and will generally be raised, one piece at a time, every month you have your account open. I've worked with 3 direct merchant accounts and my effective rate is between 4% and 8% of transaction volume. At PayPal it's less than 4% including the fixed ($0.30) portion of the fee. A company with the expected volume of Etsy can probably negotiate a contract with fixed rates for some number of years, but the other 99% of small businesses accepting credit cards online (card-not-present transactions) are not beating PayPal's rates.