We get asked a lot of questions about PayPal when working with our Web site development clients. PayPal is one of the largest processors of payments on the Internet and its brand is everywhere. PayPal fees are relatively low when compared with other methods for taking payments and it is relatively easy to setup. What’s not to love?

The decision to use PayPal or another payment processor is an important decision with pros and cons. When you only accept PayPal and your customer is redirected to PayPal’s site to make the purchase, it has a tendency to make you look small. There’s nothing wrong with PayPal and there’s nothing on their site that gives this impression. But since only very small businesses offer PayPal as the only option (usually to save money), just using PayPal on your site as the only option can group you in with those very small merchants. That might make your customer question the quality of your product or whether it will be delivered as they expected.

On the other hand, accepting credit cards using a payment processing gateway such as Authorize.net happens behind the scenes. That means that your customer stays on your site and sees no other brand but yours. It costs more (there are monthly fees that range between $40 and $60 per month) but often the extra credibility pays off. This is the approach we usually recommend to businesses and organizations.

There are ways to use both of these approaches. PayPal offers a service called “Website Payments Pro” which is similar to the payment processing gateway solution mentioned above. It uses PayPal behind the scenes and so the user never sees it. And you can often use PayPal as a secondary option in addition to a payment processing gateway. In that case, you get the best of both worlds, the credibility benefit of accepting credit cards through a gateway and the benefit of offering your customers a choice to use PayPal if they want.