Subjectively, I like PayPal’s high-rate, no-fee, no-contract approach better than WorldPay’s low-rate, high-fee, sign-away-your-soul model. The number of online complaints about WorldPay still bothers me. PayPal gets friendlier reviews – high rates are the chief complaint, and I’m getting pricing below their published rates. So PayPal has a subjective edge.
I prefer objective decisions, though, so I tried to quantify the expected costs under each bank. I won’t drive you away with the wall of numbers that “show my work.” I used these assumptions from Google Analytics and Quickbooks data:
- average transaction of $45, which is remarkably stable throughout the year;
- average of 90 transactions a month from January through October, 165 in November, and 400 in December;
- 25% of my customers use PayPal, 30% use low-cost (“qualified”) credit cards, and 40% use high-cost cards (rewards cards).
- American Express is off in its own world and makes up 10% of my sales at most, so they aren’t a factor.
When I plugged those assumptions into each company’s discount rates, per-transaction fees, and monthly fees, I got these results:
- Using WorldPay for credit cards and PayPal for PayPal should cost $1,895.09 combined.
- Using PayPal for everything should cost $1,895.02 annually.
Seven cents apart? That’s just eerie.
An objective tie dumped me back to my subjective feelings, so I went with PayPal. I signed up on Wednesday. If that was a mistake, I can get out of it with no penalty.
Initial impression: I had assumed that, like every other merchant gateway, PayPal would process credit cards separately and deposit each day’s receipts to my checking account. Instead, every single transaction shows up as a PayPal sale and goes into my PayPal account balance. There is no way to see what payment method an individual customer used for a particular order. While that simplifies accounting and cash management, I’m not sure yet that I like it.
(Incidentally, I paid $2,617 last year for credit cards and PayPal combined. If my estimates were right I will save around $700 per year with either bank.)
Another minor milestone: I passed Quickbooks order # 111111 this week. Sunshop blew past that mark months ago…but Quickbooks is closer to really being my 11,111th sale.