Choosing PayPal as a payment processor
With the arrival of the PayPal Express Checkout integration to Yahoo Merchant Solutions, you now have the choice to use PayPal Express Checkout exclusively to process PayPal transactions, or in addition to a merchant account for processing credit card transactions. Merchants who were unable to qualify for a merchant account (which can happen for a variety of reasons) can now open their store for business with just a PayPal Business account. Merchants can also register for PayPal Payments Pro, a merchant account from PayPal (our preferred provider), or apply for a merchant account through Bank of America Merchant Services or another FDMS Nashville compatible processor.
Before listing the benefits of each type of account, it is helpful to understand what shoppers will see with each method.
What Customers See
Figure 1: The Checkout flow with PayPal selected as payment
- After selecting products to purchase, your customer chooses to pay with PayPal. Customers also have the option of using your existing checkout for credit card payments.
- Your customer is transferred to PayPal. You can customize aspects of the PayPal Payment pages, such as the header and background color, to make these pages more like your custom checkout pages.
- Your customer logs in* to their account and confirms their shipping address and billing information that PayPal has stored. Your customer clicks Continue to use PayPal to pay for their purchase.
- Your customer is transferred back to your website to review their order and complete the checkout process.
- Your customer submits their order on your website. Your website makes an API call to PayPal to process the transaction; this is invisible to your customer. Once the payment is processed, PayPal sends your website a confirmation.
- Your customer is taken to your order confirmation screen.
*Note: Merchants can also enable the PayPal Account Optional feature which will allow buyers not to have to sign in to PayPal when paying with a credit card. Buyers will still go to PayPal to checkout if they choose this option in your payment methods. Learn more.
Benefits of PayPal Express Checkout and Merchant AccountsPayPal Express Checkout
- Merchants can typically be more quickly approved for a PayPal Business account than a merchant account which typically requires several business days and lengthy application forms.
- PayPal is widely used and respected as a payment processing option, which allows buyers to select various funding sources such as a bank account or even credit cards.
- PayPal offers fraud protection tools to sellers such as verifying accounts and confirming shipping addresses. You can choose to decline orders with an unconfirmed shipping address.
- There are no setup or monthly fees for PayPal Business accounts, only transaction fees.
- You can choose to display PayPal in the shopping cart or at the top of the Shipping and Billing page. Shoppers that access PayPal from those locations will not need to fill in shipping address or billing information in your store, which can be perceived as a quicker checkout experience for some shoppers.
- The main drawback is shoppers will leave your site to pay, which can be perceived as disruptive to the checkout experience given the change in visual design between your custom checkout pages and PayPal payment pages. You can however customize some elements of PayPal payment pages. Learn more.
- Transaction fees for a merchant account may be lower than PayPal, but you also may pay setup and monthly fees. Contact your merchant account provider for details on fees.
- Accepting credit cards online is considered standard by many shoppers and may lend credibility to your site when compared to another site only accepting PayPal payments.
- Shoppers remain on your site rather than being directed to PayPal and back to your site to complete the order. This can be perceived as less disruptive to the checkout experience.
Note: At this time you must have a US PayPal account. PayPal does not currently support non-US PayPal accounts in this integration of PayPal Express Checkout.
Learn more about PayPal Express Checkout.