Merchant account vs Paypal

[godboma]

The sales on my website are rising and I am starting to think about getting a merchant account to accept credit cards. Right now I only take Paypal. I know that Paypal is the main choice of payment on eBay. But what about the rest of the world?

Most of my competitors do not accept Paypal. Actually I am about the only one who is accepting only Paypal. Someone said in another post that 75% of the sales on their website go through merchant account. It is hard to know how many sells I loose by not having a merchant account. More than 90% of my sells on the website are in Canada.

What is your ratio of transaction through merchant account vs Paypal on your website? Do you have any suggestions for a merchant account?

Thanks,

[pierrelebel]

I have buyers calling regularly - on their dime!

And when they offer their credit card number I simply tell them to send me a personal cheque (Canadians) or check (Americans). They love it!

In over twenty years of selling stamps, I do not recall losing a single sale by not accepting credit cards. For large transactions (over $1,000) I will even accept partial payment in post-dated cheques.

And yes, talking to buyers by phone is a great opportunity to upsell.

[coxengines]

This probably works well for you, Pierre, and I think that's great.

However, we would rather have their money immediately, ship immediately and have a new order from them in the time their cheque would have taken to get here. 65% of sales are from repeat customers, making purchase timeline and frequency important factors.

Also, buyers love the protection that credit cards offer them.

Important is that they can shop and pay day and night (a full 50% of our sales are to outside of North America) and us accepting a form of payment convenient to them.

Before we had a toll-free # we got one or two calls a day. That has doubled after we published out # on our site.

What I am saying is that having a toll-free phone # and accepting credit cards has really boosted sales and the cost associated with such are a no-brainer in our case.

I often hear from buyers that they did not buy from a competitor because they would not accept credit card payments so, yes, those sellers do lose business (to us).

Again, every business model is different and your clientele may well accept your modus operandi without balking.

I just know that, for myself, if I shop online and I can't pay witha credit card, I just move on - and that has nothing to do with me requiring credit to purchase.

Cheers
Bernie

[axe_n_gear_music]

"And when they offer their credit card number I simply tell them to send me a personal cheque (Canadians) or check (Americans). They love it! "

As Bernie said, it may work for stamp sales on eBay but I sure can't imagine a customer from Florida for example who has purchased a violin from my website store or eBay stores "loving it" if I tell them that we dont accept credit cards and then make them send us a check in the mail (5-10 days to get here), then finally ship it for them (another 10-15 days depending on shipping method). I guarantee you they will laugh at us and move on to someone who offers the fastest and most convenient payment and shipping methods.

As it was also stated earlier, can you imagine Amazon (or any other major online company on the planet for that matter) refusing credit cards as a form of payment? This is 2010, and people expect certain conveniences when doing business online.

What works for mailing stamps, does not necessarily work for other online retail in my opinion. Every business is different, and it should be remembered that there is no "one size fits all" methods that work for everyone.

Cheers,
AXE

[pierrelebel]

"send us a check in the mail (5-10 days to get here), then finally ship it for them "

We are in very different businesses, obviously. What works in one industry may not work in another.

They are no delays involved by buyers (mostly well established seniors) sending me cheques (checks). Purchases are sent immediately. By the time I get the payment (three to five days later), they receive their purchases. Give or take a day or two either way.

That trust factor is an important factor to make customers come back.

Cash flow wise, it makes little difference, as cheques (checks) get deposited in my bank accounts immediately upon receipt. PayPal payments sit there until transferred, held for several days by the "system".

I would not suggest it if you sell computer games to the 18-25 crowd!

[coxengines]

Pierre,

I also have plenty of customers that phone in their orders and say "cheque will be in the mail". I generally ship on order day as, same as you, my customers are elderly gents and I have yet to have one not send the cheque.

My point is that our store is open 24/7 and buyers like to shop at all hours, go through checkout and pay. This is especially true with customers not located in North America. Time difference is one issue and us not accepting out of North America cheques is another. Not that we would not take cheque from Europe but the banks in this little town only accept a few select currencies and leverage something like a $15 fee per cheque; hence credit card being the only real alternative.

Again, each business is different. We had a contractor work on our house last last year whose payment terms were cash, cash or cash, no exeptions 🙂

Bernie

[godboma]

Thank you everyone for your comments. I guess that every business is different. After a little more than 24 hours, with more than 160 people, my polls say:

Customers from USA: 52% prefer Credit cards without Paypal, 45% prefer Paypal, 3 % Cheques or Money Order. 84 people answered from USA.

Customers from Canada: 37% prefer Credit cards without Paypal, 61% prefer Paypal, 2 % Cheques or Money Order. 65 people answered from Canada.

Customers from Europe: 21% prefer Credit cards without Paypal, 50% prefer Paypal, 22% prefer Bank transfer, 7 % Cheques or Money Order. 14 people answered from Europe.

Please keep in mind that these people are mainly buying boardgames.

[axe_n_gear_music]

Yeah agreed...the point is, if your "business" involves mailing stamps in envelopes to a predominantly seniors group, or shipping expensive instruments in large boxes around the globe to buyers ranging in age from 20-80, we all have different target groups and different buyer expectations.

I just sold a large package tonight to a guy in Australia via my website, and he paid instantly via CC.
I cant even imagine accepting a cheque from this guy, or him even wanting to endure the extra time that would be involved if he tried to send a cheque for 895 dollars to Canada.

I hope Godboma got the pertinent info through this thread that he was looking for from the people that actually have real experience in merchant accounts and can make a better, more informed decision from the people who actually utilize these options in their business on a day to day basis.

Have a great weekend everyone,
Cheers,
AXE

[femmefan1946]

I don't think Pierre was refusing credit card payments, he was just offering to accept cheques.

And as mentioned, philately is a handshake business. Trust and honour are very much a part of the business.

if I was selling stamps, perhaps I would be less inclined to have or need a toll free number. -

Our family philatelic business did have a toll free number a few years ago. We dropped it after a six month trial.

We got way too many low budget collectors phoning up to chat. For some reason, they chatted longer when one of the female staffers answered.

Paying for a 20 minute call that resulted in a $10 sale..... no thanks.

But as stated-- it depends on the business....