PAYPAL
An Alternative to a Traditional
Credit Card Merchant
Processing Account

Your business should probably NOT consider a traditional Merchant Processing Account if:

• You've previously had a Merchant Account shut down involuntarily and are on the "Terminated Merchant" match. list
• You are a very seasonal business and only have the need to process credit cards a few months per year.
• Your personal and/or business credit rating is poor, in which case your application for a traditional Merchant Account would be prohibitively expensive and severely termed at best, if not declined altogether.
• Your credit card processing needs are extremely low, perhaps only one or two transactions per month, in which case the fixed costs of a traditional account would be cost prohibitive.
• Your business is temporary and/or short term, in which case it would make no sense to sign a long-term processing contract or invest in processing equipment.

There are several alternatives to traditional Merchant Accounts on the market today. In our opinion, Paypal clearly should be at the top of the list if, for no other reason, it is the most well known and respected of the bunch. This means less customer apprehension and as a result, more business for the Merchant.

Think of it this way: Would YOU be comfortable divulging your credit card or checking account information so some processing entity that you never heard of? Of course not! In this age of identity theft and data fraud, neither would anybody else. For these many reasons, Paypal is your best choice until such time as you are ready for a permanent traditional Merchant account:

• Little or no setup fee plans available.
• Little or no equipment cost for many plans.
• Little or no fixed monthly fee plans available,
• No long term contract or termination fee plans available.
• Pay-as-you-process plans available. No activity=no cost.
• Retail, mail/phone order, and e-commerce plans available.
• Extremely simple. E-commerce plans include shopping cart.
• Easy on-line setup.

Notwithstanding all of the above, you're probably thinking "why doesn't everybody just use Paypal instead of a 'traditional merchant account'? There must be a reason. And of course, there is.

What's the Difference Between PayPal and a "Real" Merchant Account?

• 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' payment processors.

A domino effect occurs when a PayPal account is frozen, leaving the merchant without financial means to fulfill orders. Paid fur but unshipped orders are then disputed by customers, creating more chargebacks and the illusion of fraudulent activity on the part of the merchant. The end result is a bad situation soon becoming much worse.

The Bottom Line? As noted, PayPal is a very good alternative, temporary solution for start-up merchants or those who have no other choice. Otherwise, a traditional merchant account is by far the better choice for most serious merchants.

To sign up immediately for a Paypal account, click below.