Is PayPal or other credit card processing options a better pick for online transactions?

Yapsody supports Meritus, Stripe, Authorize.net, and Braintree. Before we go through the Pros and Cons of a merchant account and PayPal, let's define what it is.  A merchant account is a type of bank account that allows businesses to accept payments by debit or credit cards.

PayPal Account Pros

• Allows you to accept payment via major credit services like Visa, MasterCard, Discover and American Express online

• You don't need a merchant account to process credit card payments, all you need is a free PayPal Premiere or Business account to accept credit card transactions.

PayPal Account Cons

• Charges a higher transaction fee than most merchant account providers (around 3%)

• Funds are deposited into your PayPal account so you'll need to manually transfer it to your personal account (or get a PayPal debit card) to have direct access to your funds

• Limited control over the user experience - Since the credit card transactions are processed on PayPal's site the buyer leaves your website to make their payment (some buyers may not be comfortable with that)

• APIs are not well-documented or very flexible.

• Often quick to freeze accounts when suspicious of fraudulent activity.

• Does not provide good Customer service.

Merchant Account Pros

• Allows you to accept payment via major credit services like Visa, MasterCard, Discover and American Express online

• Your funds are deposited directly into your checking account (Yapsody does not hold any money, all the money is deposited into your account)

• With some merchant account providers, you'll have the option for an online terminal to process payments on behalf of your customers (This can be helpful for customers who are not comfortable placing their orders online)

• Transaction fees are mostly lower than that of PayPal

Merchant Account Cons

• Most merchant account providers charge a monthly fee in order to cover their monthly costs of operation

• There's usually a transactions fee that is paid on every sale processed through your merchant account (on average it's around 2% of the amount you received)

• The approval process may be a little hard with some merchant account providers.  You may be asked to provide financial information about your business, business trade references and a copy of your professional license (if applicable)

• Some merchant account providers like Authorize.net, charge a setup fee when opening a merchant account for the first time.

The credit card processing options are even cheaper and more professional compared to PayPal. Among the credit card processing options that we provide, the ones we recommend are Stripe and Meritus. Neither of these requires the redirect process.

- Stripe is great because you can get an account within minutes at www.stripe.com without any underwriting hassle. With stripe there is no setup fee or any monthly charges, they only charge transaction fees that is similar to those of PayPal. The one drawback is that they will hold your funds for approximately 1 week before depositing them into your checking account. This functions to reduce their risk since they do not require underwriting. To know the list of countries that Stripe supports click here.

- Meritus is great because

(i) You can set up an account within 2 business days,
(ii) their fees are lower than those of Stripe and PayPal,
(iii) they will deposit funds to your checking account by next business day, and 
(iv) they have 24x7 phone support. You can apply for a Meritus account by going to your Yapsody Box Office Settings>Payment Methods page, clicking on Credit Card and then clicking on the Meritus image that appears on the right side of the page.

Meritus Payment Solutions supports only the United States.

If you are looking for the most favorable rates, our top choice is Meritus. However, if you are looking for the quickest and easiest setup, we recommend Stripe, which would take you only a few minutes to register for an account.