PayPal... Authorize.net... or Both?

Hi... We are just starting to decide whether we should move away from Authorize.net as our credit card processor. We just opened a commercial PayPal account. I was going to run both PayPal and Authorize.net for payment processing... Now the problem or question:

I am being advised that PayPal is much better and cheaper than Authorize.net for our under 25 total software products that we offer for download (no shipping and no inventory). With such a small shopping selection/cart, they are telling me that I should drop Authorize.net and only go with PayPal.

I am asking why run both PayPal and Authorize.net, when PayPal does everything? I don't know the answer to that question... Do you?

On intangible products I don't know if it makes a difference... but over the years I have had clients switch back & forth between PayPal services and direct CC processors and sales always drop significantly when moving to PayPal Only and increase signifciantly when going the other way.

In the latter few we noticed that the loses were directly tied to higher priced items BUT with further investigation we concluded that most households of $75K or more yearly income don't use paypal accounts (and you can't use your CC without an account)

...it's below their stature... and if true the "price" isn't the issue the market demanding the item 'is'.

While it's worth testing PayPal without Authorize.net (turning A off) to prove or disprove... I suspect you will need both.

Please stay away from Paypal. Too many problems.

First, they have a "ghosting" issue where you will get the funds in your account, but it wont show up in your history as a valid transaction.

Second, there is tons and tons of fraud with Paypal. email spammers send out tons of spoof emails and lure un-tech friendly consumers into providing their paypal account id and password. These frauds then charge up a bunch of crap on the stolen paypal accounts.

Third, it is most certainly NOT cheaper to use Paypal.

Fourth, Any yahoo can dispute the transaction through paypal and take the money right out of your account. Paypal can even freeze your ENTIRE balance not just that transaction while they "review" your account for up to 60 days. It's absolutely ridiculous.

I dunno who your using to process the payments currently, but Authorize.net should just be your gateway. You need to get setup with a real payment processor. We use Chase Paymentech for all our website sales. Very great rates, outstanding service. It's been a while since I've examined the rates, but I'm pretty sure we pay 1.9% and have a monthly fee of like 30 bucks a month.

Take a look at http://www.paypalsucks.com/ to see all the Paypal horror stories. I tell you with every fiber of my being, DO NOT get lured into using paypal. You will regret it.

Thanks...
My customers are normally professionals or graduate students. Along with your input, in one conversation I had today an opinion was offered that higher paid or positioned still do not trust PayPal and would likely prefer a credit card processor like Wells Fargo Bank through Authorize.net. I know that in years past the PayPal had a terrible reputation for many reasons. All that seems to have past, but the reputation might still be there. I think likely I will stick with Authorize.net hooked into Wells Fargo Bank and just offer PayPal as an alternative. In this way they can pay with their bank account and my intenational customers need only open a PayPal account.

Thanks for your input

For one of my sites that offered intangible products for download -- all in the sub $70 price range -- I found that Paypal was the preferred method, but that 2Checkout proved useful for those people in countries that Paypal didn't support, or for those that didn't have a Paypal account.

The only time I ever had problems with customers via Paypal disputing the claim was when they reversed the transaction via their credit card provider. For intangible goods, submitting a dispute with Paypal is actually pretty ineffective -- Paypal can't refund them automatically as they can't prove that the customer did or didn't receive the items.

I use authorize right now on four sites. No problems. None!

About 18 months ago we decided to try paypal (again) on one tiny site. Sales tanked. No, they TANKED!

The site was software and literature for a fairly technical market.

A VERY large part of my market are business/accounting students in the U.S. and internationally. I am being advised that many of them do not have credit cards; the same with international market/students in general. This being the case, it would appear that PayPal could be a solution.

EGOL... have you ever tried running both Authorize.net and Paypal at the same time; giving them the option to select their payment method?

No, have not tried that, it might be an improvement.

If you have international then Paypal might be helpful. All of my buyers are USA.

Decision made: Run both. Thanks everyone.

From my experience of INTANGIBLE products, do not use paypal. I had a small site selling Digital items, accounts, at about 350 a piece, Paypal does not support digital or items that cannot be shipped to the consumer. They will handle the trasaction, but what happened to me was 2 out of every 4 people would do a chargeback and I was left without the accounts and without the money. So basically what I am saying is that if you use paypal, selling intangible items, BEWARE of getting jacked. Intangible items paypal listens to the consumer and not the seller, seller has no protection whatsoever.

Sorry but you can do chargeback with all processors and a lie with one is good with all "I didn't authorize the charge"... if 50% of your customers are doing chargebacks with paypal (or any merchant service) the problem resides on your end...

I run directories for PPI links and out of 3,000 link pusrchases (PayPal) I've hadn't a single chargeback attempt/complaint - and that an intangible service.

We also have a very low chargeback rate. Perhaps one out of 1000 customers. Most of the time we have delivery confirmation but customer says he didn't order and didn't receive.

I truly cannot remember the last time we had a charge back through the credit card company. We have given refunds through direct contact with us, but have never has a dispute.

We have been selling on-line since 1996. I think it is our product category, customer segment, and providing the customer full knowledge of what s/he is purchasing BEFORE they pay for it. They get what they paid for!

I run both Authorize.net and PayPal on my e-commerce site.

I think running PayPal only tells visitors that you are low-rent and not ready for prime time. Accepting credit cards says you are a serious business. Just had a customer on the phone today who was hesitant to give out a CC number over the web. I said, "Do you have a PayPal account?" She did and I made the sale.

Never had a charge back or account frozen with PayPal, but I have read the horror stories and I xfer out money whenever the account exceeds $500.

Ed