Paypal is the cheapest option, and it does fit well for a number of vendors, as it has some significant advantages. There is also a downside that publishers can become aware of. Here is a sampling of some client feedback we've received from clients who have used Paypal:
“PayPal’s reporting is extremely limited.”
“Virtually impossible to use for serious businesses without extensive external code or a system to manage customer flow/cross/upsells.”
“You spend too much precious time on e-commerce tasks and way too little time on marketing and dev.”account's funds on
"They froze my account funds indefinitely and I'm stuck trying to prove my business to them in order to get my money back. In the meantime, I have to still pay all my expenses."
“For business-to-business products, clients do not take you seriously as a potential supplier if PayPal is your main payment method.”
“No branding on PayPal order pages means fewer purchases! My order page needs to blend in with the rest of my site or too many people will bail on us”
“No fulfillment support”
“Revenue is lost because a decent number of customers are located in countries PayPal won’t accept payments within for whatever reason.”
“As much as I like rolling my own solutions, it’s too complicated to offer quantity discounts, coupon codes, and multiple currencies on top of the PayPal API alone.”
“Tax responsibilities are on the client, ugh.”
“Huge problems with spam filters on PayPal — we automatically send out logins once an order is processed yet a higher percentage is not received than is received.”
“They have virtually no fraud screening.”
“(PayPal is) more difficult to set up - documentation spread all over the place, and forum answers sometimes misleading”
“There is no support for discount codes/vouchers (this really surprised me)”
“No experience with (PayPal) customer service yet- but I’ve heard bad things”
“Their system is very clunky, as far as looking up orders, pulling reports, checking a history etc…”
“PayPal heavily favors the purchaser not the vendor selling, as in chargebacks or disputes etc.”
“I don’t get notification of orders on a consistent basis, I have to login and check orders daily”
“We sell off multiple sites with the same PayPal account and the reporting to figure out which sites generated which sales is a nightmare”
“Lacks professionalism”
“Their UI stinks, it takes me a while to figure out how to do things in their system”
“I have heard too much about PayPal’s abuses to trust them. When I see something where the only payment option is PayPal, I select a different option: not buying.”
“No ability to offer upsells (at least that I can figure out)”
Here is what one vendor said about the experience of switching from Paypal to a full service e-commerce solution (to us in this case):
http://www.fastspring.com/blog/2009/12/switching-to-fastspring-a-clients-experience/Here is a now online-famous Paypal story which got a lot of attention through a vendor's blog:
http://www.fastspring.com/blog/2009/12/another-paypal-story-yikes/As I mentioned, Paypal is a great option for vendors with certain needs. They clearly are doing a great job for many thousands of vendors, given how successful they are. This feedback is just a sampling based on situations where Paypal didn't work out for certain vendors; it's good to be aware of, though it's safe to assume that the majority of their vendors are perfectly happy, as there are some good benefits (including price) over full service solutions.
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