Using APIs to Collect Money Online

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Notes

The cons of merchant accounts:

- you need to apply to get a merchant account via your bank

- some banks have high standards for whom they give an merchant account

- expensive and take a lot of time and effort to set up

- unless you are a big name, people don't want to give credit cards into your site

- people are taking advantage of credit card information more, so people are much more wary to give their numbers

- complicated because you need like 5-7 entities to make things work (merchant account, payment gateway processor, shopping cart, ssl certificate, web host)

- unless you have several hundred transactions a month it is not cheaper


Pros for Paypal:

- people like paypal and use it even though it is a pain in the ass

- even though they complain, they use it (3x as many)

- paypal has a lower dropout rate

- cheaper for smaller numbers of transactions

- just reased a brand new api, with micropayments, grouping transactions to differnt accounts

- winning solution for recurring payments, since it gives people over their subscription and no work for you

- stronger brand, people will choose it over Google Checkout


Cons to paypal:

- lots of differnt services, and no clear explination and

- they are not a bank, they are not legally obligated to give it to you immediatly

- they can arbitrarily do stuff like turn off your account or not give you your money

- limits to withdrawl amounts and such unless you upgrade to higher level business accounts

- customer support is not very helpful, sometimes need several calls

- Only the account holder can call support

- You need a paypal account to set up recurring payments

- at least four seperate product offerings and it is nearly impossible to figure out what they all do

- big donors have trouble using it, but they shouldn't be using any online system because of the fees

- can have suspicious bank activity, it's important to have a good relationship in your bank