The PeC Review: PayPal’s Website Payment Pro is a Good Value for Small Merchants

Ecommerce is not possible without online payment processing.

You might have the best products. You might have the best website. But, if customers cannot order and pay for products online, you’re not in the ecommerce business.

PayPal’s Website Payments Pro is an all-in-one payment processing solution that lets you accept credit cards online. It provides both an Internet merchant account and a secure payment gateway in a single product with a relatively low monthly payment and reasonable transaction fee. The service is also convenient, easy to integrate with many leading ecommerce platforms and shopping carts, and secure. For all of these reasons, I am awarding PayPal’s Website Payments Pro four out of a possible five stars in this “The PeC Review.”

“The PeC Review” is my weekly column to introduce you to the products or services that I believe can improve your ecommerce business. This week, let me explain why I think Website Payments Pro is good value, particularly for small merchants.

Smooth, Effective Service

Payment gateways should be forgettable. Once you set one up, you should not have to worry about it, at all. There should never be service interruptions, no quirky changes to the API or interface. Once it is up and running, it should quietly provide smooth and effective service.

PayPal’s Website Payments Pro does this well. PayPal’s systems are almost flawless in operation. After six months of use, Website Payments Pro never so much as sniffled.

One Relationship

Website Payments Pro reduces the number of vendors you deal with. In some traditional merchant-account-payment-gateway arrangements, you could receive two, three, or even four monthly statements and need to deal with several different transaction rates. Depending on your accounting work flow, these disparate rates, fees, and statements can be troublesome, particularly for small businesses where the accountant is also the owner, purchasing manager, customer service representative, and packing clerk.

Transactional and Fraud Prevention Tools

This PayPal service includes a number of good transactional and fraud prevention tools, like easy-to-read reports; downloadable logs that can be integrated with QuickBooks and other account solutions; multi-user access; and good fraud management controls.

Easy Integration with Many Leading Carts

Website Payments Pro is “compatible” with 114 shopping carts and ecommerce platforms, including Magento Commerce, Shopify, Miva Merchant, Zen Cart, osCommerce, e-Junkie, and Elastic Path, to name a few. This means a coding novice can integrate it, oftentimes by simply pasting an API username, password, and signature into a backend form.

And if your particular cart is not on PayPal’s compatibility list, have no fear. The company provides a comprehensive set of APIs that most any developer could use to integrate the service into your cart.

Get Express Checkout Free

In addition to a payment gateway, wherein customers complete their transactions on your site, Website Payments Pro includes PayPal’s Express Checkout service that allows your customers to use their PayPal funds to buy from you.

According to PayPal, including Express Checkout in your shopping cart can increase sales by as much as 14 percent. Even if these PayPal figures are wrong, it does not hurt your business to give shoppers another way to pay. And it could spur buying, since some consumers use their PayPal accounts as a sort of discretionary digital cookie jar where money from the occasional eBay sale sits until the account’s owner wants to make a purchase that isn’t in the budget. Having Express Checkout in your cart creates the opportunity for this sort of incremental sale.

Money Market Account

One of my favorite Website Payments Pro features is the PayPal Money Market account option. This service transforms the funds in your PayPal account into money market shares that have the potential to return perhaps half a percent in interest. With the money market account, you also get a PayPal debit card, which can be used to purchase inventory, pay hosting fees, or pay for shipping.

$30 Per Month Plus Transaction Fees

Cost may be an issue.

Website Payments Pro costs $30 per month, plus 30 cents per transaction, plus 2.2-to-2.9 percent of the sale value. So a $10 dollar order costs you between 52 cents and 59 cents in transaction fees plus that order’s share of the $30 monthly overhead.

Four Stars
By comparison, a traditional payment gateway and merchant account arrangement might cost you 25 cents per transaction, plus 1.9-to-2.9 percent of the sale value. So a best-case example might cost you 44 cents for a $10 transaction (assuming 25 cents plus 1.9 percent) and a worst-case example might be 54 cents for a $10 transaction.

At first blush the traditional arrangement might seem a lot cheaper, but don’t forget to add setup fees, statement fees, address verification fees, and/or downgrade fees, which can bring to cost per transaction up significantly. Website Payments Pro, by the way, has no extra fees.

Bottom line, you will want to compare your sales history and additional fee schedule with a likely Website Payments Pro scenario before you make your decision. For some merchants, the PayPal solution will be cheaper. While others may pay a little more, but get better service or better site integration.

A Word About Chargebacks

When I decided to write this review, I took something of an editorial risk. The truth is that PayPal is not necessarily a reader favorite. In fact, when Practical Ecommerce published a Quick Query with PayPal’s Colin Rule in 2008, the article received no small number of angry comments. Many merchants seemed upset by how PayPal handled disputes.

While there is some anecdotal indication that Express Checkout users may charge back at a rate higher than normal, PayPal generally seems to handle disputes in a professional way. In fact, I think they do a pretty good job.

Summing Up

PayPal’s Website Payments Pro is an effective all-in-one payment processing solution that can be a good value in terms of service, security, and reliability. This is why I am awarding it four out of a possible five stars in this “The PeC Review.”

Armando Roggio
Armando Roggio
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